5 Steps To A 5 AP Microeconomics 2016 2nd Edition Eric R. Dodge - Solutions

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When a fall in price causes businesses to decrease the quantity supplied of a product, this illustratesa) the law of supply.b) the law of demand.c) a decrease in supply.d) an increase in supply.
The law of supply applies to an individual’s decision to work becausea) as the wage rises, the quantity of hours a worker is willing to supply increases.b) as the price workers receive rises, the quantity of hours a worker is willing to supply increases.c) workers need to be compensated with
If all workers and equipment are equally productive in all activities, the opportunity cost of increasing output is alwaysa) increasing.b) decreasing.c) the same.d) low.
Your friend Larry is deciding whether to break up with his current girlfriend, Lucy. He tells you that his number-one reason for staying with her is his tattoo, which says “I love Lucy.” Based on economic thinking, you advise him to ignore his tattoo because it is a(n)a) opportunity cost.b)
Gamblers on slot machines often believe that the more they lose, the greater are their chances of winning on the next turn. However, the chances of winning on any turn are actually random — they do not depend on past turns. Therefore, the money lost on the previous turn is a(n)a) total cost.b)
Which statement is false?a) Marginal costs are opportunity costs.b) Opportunity costs are marginal costs.c) Sunk costs are marginal costs.d) Marginal opportunity costs increase as quantity supplied increases.
The opportunity cost of going to school is highest for someone whoa) has to give up a job paying $10 an hour.b) has to give up a job paying $15 an hour.c) loves school.d) has to give up a volunteer opportunity.
Your opportunity cost of watching The Big Bang Theory increases ifa) it is your favourite TV show.b) you have an expensive television.c) you have an exam the next day.d) all of the above.
If Kraft Dinner is an inferior good, a rise in the price of Kraft Dinnera) decreases demand for Kraft Dinner.b) increases demand for Kraft Dinner.c) increases the quantity demanded of Kraft Dinner.d) decreases the quantity demanded of Kraft Dinner.
Which of the following could cause a leftward shift of the demand curve for a product?a) increase in incomeb) decrease in incomec) increase in the price of a substituted) all of the above
If the price of cars rises, the demand for tiresa) increases.b) decreases.c) stay the same.d) depend on the price of tires.
Demanda) increases with a rise in price.b) is the same as quantity demanded.c) changes with income.d) decreases with a rise in price.
What is most likely to be an inferior good?a) fast foodb) antique furniturec) school bagsd) textbooks
A sociology class is a substitute for an economics class ifa) attending the two classes has the same opportunity cost.b) the two classes satisfy the same want.c) both classes are at the same time.d) both classes are taught by the same instructor.
If homeowners were charged for garbage collection by the number of garbage bags used, there would be a(n)a) increase in demand for garbage collection.b) decrease in demand for garbage collection.c) increase in quantity demanded of garbage collection.d) decrease in quantity demanded of garbage
When the price of a product rises,a) consumers look for more expensive substitutes.b) quantity demanded increases.c) consumers look for cheaper substitutes.d) consumers use more of the product.
The price of diamonds is higher than the price of water becausea) total benefits from water are relatively low.b) total benefits from diamonds are relatively high.c) marginal benefits from water are relatively high.d) marginal benefits from diamonds are relatively high.
Peter wants two cars, one for everyday and the other for special occasions. He has only $15 000, so he buys only one car. His quantity demanded of cars isa) 1.b) 2.c) 15 000.d) 30 000.
Thinking like economists, a dating couple should break up when thea) total benefits of dating are greater than the total costs of dating.b) total costs of dating are greater than the total benefits of dating.c) additional benefits of dating are greater than the additional costs of dating.d)
All-you-can-eat buffet restaurants charge a fixed fee for eating. With each plate that Anna eats, she experiencesa) decreasing marginal costs.b) increasing marginal costs.c) decreasing marginal benefits.d) increasing marginal benefits.
Your preferences measurea) the availability of substitutes.b) how limited your time is.c) the price of a product.d) how badly you want something.
Costs area) worth money.b) whatever we are willing to give up.c) the answer to the question “What do we want?”d) whatever we are willing to get.
Economists describe the list of your wants and their intensities asa) demand.b) supply.c) benefit.d) preferences.
All of the following should be considered when making smart choices, excepta) external costs and benefits.b) past costs and benefits.c) implicit costs.d) additional costs and additional benefits.
Which of the following is not a microeconomic choice for governments?a) increasing tuition ratesb) taxing automobile emissionsc) increasing the exchange rate of the Canadian dollard) increasing the number of taxi licences
Which of the following is not a microeconomic choice for businesses?a) what interest rate to setb) what products to supplyc) what quantity of output to produced) how many workers to hire
In the circular-flow model,a) households ultimately own all inputs of an economy.b) governments set the rules of the game.c) businesses are sellers and households are buyers in output markets.d) all of the above
Which of the following statements is normative?a) Economists should not make normative statements.b) Warts are caused by handling toads.c) As smartphone prices fall, people will buy more of them.d) As test dates get closer, students study more hours.
In one hour, Chloe can bake 24 cookies or 12 muffins.Zabeen can bake 6 cookies or 2 muffins. For mutually beneficial trade, Chloe shoulda) bake cookies because she has a comparative advantage.b) bake cookies because she has an absolute advantage.c) bake muffins because she has a comparative
The easiest way to calculate opportunity cost isa) give up getb) get give upc) give up – getd) get – give up
Mutually beneficial gains from trade come froma) absolute advantage.b) comparative advantage.c) self-sufficiency.d) China.
If the resource-rich sector of Alberta’s economy slows down,a) opportunity costs of upgrading to a college diploma increase.b) opportunity costs of upgrading to a college diploma decrease.c) incentives to drop out of college increase.d) all of the above.
Recently, the proportion of 25- to 29-year-old women with university degrees rose from 21 percent to 34 percent, while the proportion of 25- to 29-year-old men with degrees rose from 16 percent to 21 percent.There is a similar trend for college diplomas. More woman than men are getting
In deciding whether to study or sleep for the next hour, you should consider all of the following excepta) how much tuition you paid.b) how tired you are.c) how productive you will be in that hour.d) how much value you place on sleeping in that hour.
Opportunity cost includesa) time you give up.b) energy you spend.c) money you spend.d) all of the above.
Economics does not focus ona) individuals.b) animals.c) businesses.d) government.
Scarcity isa) not a challenge for governments.b) not a challenge for celebrities.c) not a challenge for people who win the lottery.d) a challenge for everyone.
You can’t get everything you want because you are limited bya) time.b) money.c) energy.d) all of the above.
Because of the free-rider effect, the private marketplace tends to(A) provide the allocatively efficient amount of a public good.(B) produce too much of a public good, requiring the government to intervene and tax the production of it.(C) produce a public good in the amount where the marginal
Which of the following scenarios is the best example of a positive externality?(A) Your neighbor has a swimming pool and throws loud late-night parties.(B) Your neighbor has a swimming pool and allows you free access.(C) Your neighbor has a swimming pool and the powerful chlorine odor blows into
The U.S. government collects tax revenue, buys military equipment from many private firms, and uses this equipment to provide national defense to all Americans. This is a good example of(A) a natural monopoly.(B) an excise tax on military equipment.(C) a regressive tax.(D) a public good.(E)
The local market for bankers is currently in equilibrium. Which of the following increases the local wage paid to bankers?(A) Internet banking at home is becoming more popular.(B) More college students are majoring in finance and economics, majors that make them attractive as bank employees.(C) The
Suppose the state requires hairdressers and manicurists to pass a series of exams to be certified cosmetologists. How does this policy change the supply of cosmetologists, the equilibrium wage, and the price of a manicure?
A cartel is often the result of(A) perfectly competitive firms that agree to produce a homogenous product.(B) oligopoly competitors that agree to restrict output to maximize joint profits.(C) a monopoly that has been regulated by the government.(D) a natural monopoly that has evolved into a
The price of labor is $5 and the price of capital is $10 per unit. Using the table below, what is the least-cost combination of labor and capital that should be hired to produce 18 units of output?(A) 1 Labor and 2 Capital (B) 4 Labor and 8 Capital (C) 2 Labor and 1 Capital (D) 5 Labor and 5
A monopsony employer hires labor up to the point where(A) Wage = Marginal factor cost.(B) Marginal factor cost = Marginal product of labor(C) Marginal factor cost = Marginal revenue product of labor(D) Wage = Marginal revenue product of labor(E) Wage = Price of the good produced by the labor
Which of the following increases the demand for interstate truck drivers?(A) An increase in the wage of truck drivers(B) An increase in the supply of truck drivers(C) An increase in the price of diesel fuel, which is used to power semitrucks(D) A decrease in the demand for interstate shipping(E) A
Which of the following would improve the efficiency of a monopoly market?(A) The government regulates the monopolist to produce the output where marginal revenue equals marginal cost.(B) The government provides additional legal barriers to entry.(C) The government subsidizes the monopolist so that
If the government wishes to regulate a natural monopoly so that it earns a normal profit, it sets(A) Price = Marginal cost.(B) Marginal revenue = Marginal cost.(C) Price = Average total cost.(D) Price = Marginal revenue.(E) Marginal revenue = Average total cost.
Deadweight loss in industries with market power is a result of(A) profit-maximizing output occurs where price equals marginal revenue.(B) profit-maximizing output occurs where price exceeds marginal cost.(C) profit-maximizing output occurs where price equals marginal cost.(D) profit-maximizing
The monopolistically competitive price is above marginal revenue because(A) firms have differentiated products.(B) firms are price takers.(C) firms produce a homogenous product.(D) the market is allocatively efficient.(E) profits are normal in the long run.
Which of the following are shared by perfectly competitive firms and monopolistically competitive firms?I. Barriers to entry II. Normal profits in the long run III. Excess capacity IV. A homogenous product (A) I only (B) II only (C) III only (D) II and IV only (E) I, II, and III only
The production of chicken often results in offending odors that are picked up by the wind and blown over rural communities. This is an example of a ______ externality, the result of which are spillover ______ and an _______ of resources to chicken production.(A) negative, costs, underallocation(B)
Oligopoly has at times been the subject of government antitrust regulation. Which of the following is a reason for this government regulation?(A) Price is approximately equal to marginal cost.(B) Price is approximately equal to average total cost.(C) Deadweight loss lessens over time.(D) Consumer
Which of the following statements are true of consumer utilitymaximizing behavior?I. Utility from consumption of good X is maximized when the marginal utility is equal to zero.II. Total utility from consumption of good X rises at a decreasing rate.III. The consumer spends limited income until the
The top six firms in an oligopolistic industry have market shares of 25%, 25%, 15%, 10%, 6%, and 3%. Many smaller firms split the rest of the market. What is the value of the four-firm concentration ratio?(A) 65%(B) 54%(C) 75%(D) 34%(E) 50%
Consumer surplus in the monopolist market is equal to the area(A) abce.(B) abcf.(C) P5cd.(D) 0Q1aP1.(E) P1P5ca.
If this firm were a profit-maximizing monopolist, the price, output, and profit would be
A monopolist may be able to maintain long-run positive profit due to(A) deadweight loss.(B) economies of scale in production.(C) a price that is set equal to average total cost.(D) perfectly elastic demand for the product.(E) entry of new firms that keep the price high.
Which of the following is a characteristic of a monopoly market?(A) Firms produce a homogeneous product.(B) Barriers to entry exist.(C) Firms are price-taking profit maximizers.(D) Deadweight loss is eliminated through entry of competing firms in the long run.(E) In the long run the firm earns
If a market for a good is producing a negative externality,(A) at the market output the marginal costs to society exceed the private marginal costs of production.(B) at the market output the marginal benefits to society exceed the private marginal costs of production.(C) at the market output the
Where is the shutdown point for this perfectly competitive firm?(A) Any price below curve 4(B) Any price below 0c(C) Any price below curve 3(D) Any price below curve 2(E) Any quantity less than Q
The curve labeled 4 represents which of the following?(A) Marginal cost(B) Marginal product of labor(C) Average total cost(D) Average fixed cost(E) Average variable cost
The demand for labor falls if(A) labor productivity falls.(B) the price of the good produced by labor rises.(C) the price of a complementary input falls.(D) demand for the good produced by labor rises.(E) a minimum wage is removed from the labor market.
At a quantity of 10, what is the value of $(Y - X)?(A) $100(B) $25.(C) $10 (D) $35 (E) $350
If average variable cost at a quantity of 10 is $25, what is the value of$Y in the figure above?(A) $250(B) $25(C) $35(D) $1,000(E) $350
The market for good X is currently in equilibrium. Which of the following choices would not cause both a decrease in the equilibrium price of good X and a decrease in the equilibrium quantity of good X?(A) A decrease in consumer income and good X is a normal good.(B) An increase in consumer income
The figure above shows the long-run average cost curve of a competitive firm. Which of the following choices best describes Region B in the diagram?(A) Economies of scale(B) Diseconomies of scale(C) Constant returns to scale(D) Diminishing returns to scale(E) Increasing returns to scale
The table above shows how hiring increasing amounts of labor to a fixed amount of capital affects the hourly output of Eli’s lemonade stand. Based on this table of production data, which of the following can be said?(A) Diminishing marginal returns begins with the first worker hired.(B) Marginal
Which of the following is a characteristic of perfect competition?(A) Firms produce a homogeneous product.(B) Barriers to entry exist.(C) Firms are price-setting profit maximizers.(D) The government regulates the price so that deadweight loss is eliminated.(E) Long-run positive profits are
Diminishing marginal returns to short-run production begin when(A) the average product of labor begins to fall.(B) the total product of labor begins to fall.(C) marginal product of labor becomes negative.(D) average variable cost begins to rise.(E) marginal product of labor begins to fall.
A firm employs variable amounts of labor to a fixed amount of capital to produce output. If the daily wage paid to labor increases, how does this affect the firm’s costs?
If it is true that bacon and eggs are complementary goods, then(A) the income elasticity of bacon is positive and the income elasticity for eggs is negative.(B) the price elasticity for eggs is greater than the price elasticity for bacon.(C) the cross-price elasticity between bacon and eggs is
The figure above best represents which of the following functions?(A) Total product of labor(B) Total revenue(C) Total cost(D) Total utility(E) Total short-run economic profits
You are told that the Gini coefficient of income inequality has risen from.35 to .85. Which of the following is a likely cause of this change?(A) Market power in the factor and output markets has increased.(B) Labor market discrimination has been eliminated.(C) The distribution of wealth and
Dorothy has daily income of $20, each cup of coffee costs Pc= $1, and each scone costs Ps= $4. The table below provides us with Dorothy’s marginal utility (MU) received in the consumption of each good. As a utility-maximizing consumer, which combination of coffee and scones should Dorothy consume
The downward-sloping demand curve is partially explained by which of the following?(A) Substitution effects and income effects(B) The law of increasing marginal costs(C) The principle of comparative advantage(D) The law of diminishing marginal returns to production(E) The least-cost principle
If the market is in equilibrium, which of the following areas corresponds to producer surplus?(A) BGD(B) 0AHJ(C) 0DGK(D) 0BG(E) 0BGK
If the price were to fall from 0C to 0A, which of the following would be true?(A) Dollars spent on this good would increase if demand for the good were price inelastic.(B) Dollars spent on this good would decrease if demand for the good were price elastic.(C) Dollars spent on this good would
If the current price is 0B, we would expect(A) a surplus in the market to be eliminated by rising prices.(B) a shortage in the market to be eliminated by falling prices.(C) a surplus in the market to be eliminated by falling prices.(D) quantity demanded to be equal to quantity supplied as the
Which of the following is true of the perfectly competitive firm in the short run?(A) The firm earns a normal profit.(B) The firm shuts down if the price falls below average total cost.(C) The firm earns positive economic profit.(D) The firm maximizes profit by producing where the price equals
If the wage paid to all units of labor is $4.50, how many units of labor are hired?(A) 1(B) 2(C) 3(D) 4(E) 5
Which unit of labor has marginal revenue product equal to $1.50?(A) 1st(B) 2nd(C) 3rd(D) 4th(E) 5th
Suppose a price floor is installed in the market for coffee. One result of this policy would be(A) a decrease in the demand for coffee-brewing machines.(B) a persistent shortage of coffee in the market.(C) an increase in consumer surplus due to lower coffee prices.(D) an increase in the demand for
Which of the following is an implicit cost for the owner of a small store in your hometown?(A) The wage that is paid to the assistant manager(B) The cost of purchasing canned goods from a wholesale food distributor(C) The value placed on the owner’s skills in an alternative career(D) The cost of
Good X is exchanged in a competitive market. Which of the following is true if an excise tax is now imposed on the production of good X?(A) If the demand curve is perfectly elastic, the price rises by the amount of the tax.(B) The consumer’s burden of the tax rises as the demand curve is more
The elasticity of supply is typically greater when(A) producers have fewer alternative goods to produce.(B) producers have less time to respond to price changes.(C) producers are operating near the limits of their production.(D) producers have less access to raw materials necessary for
Which of the following is a fundamental aspect of the free market system?(A) A high degree of government involvement.(B) Public ownership of resources.(C) Private property.(D) Central planners set wages and prices.(E) Employers consult government agencies for guidance in hiring workers with
Which of the following goods is likely to have the most elastic demand curve?(A) Demand for white Ford minivans(B) Demand for automobiles(C) Demand for Ford automobiles(D) Demand for American-made automobiles(E) Demand for a Ford minivan
An effective price ceiling in the market for good X likely results in(A) a persistent surplus of good X.(B) a persistent shortage of good X.(C) an increase in the demand for good Y, a substitute for good X.(D) a decrease in the demand for good Z, a complement with good X.(E) a rightward shift in
Which of the following certainly lowers the equilibrium price of a good exchanged in a competitive market?(A) The demand curve shifts to the right.(B) The supply curve shifts to the left.(C) The demand curve shifts to the left, and the supply curve shifts to the right.(D) The demand curve shifts to
A competitive market for coffee, a normal good, is currently in equilibrium. Which of the following would most likely result in an increase in the demand for coffee?(A) Consumer income falls.(B) The price of tea rises.(C) The wage of coffee plantation workers falls.(D) Technology in the harvesting
A rational consumer who is eating Girl Scout cookies stops eating when(A) the total benefit equals the total cost of eating cookies.(B) the marginal benefit equals the marginal cost of the next cookie.(C) the marginal cost of eating cookies is maximized.(D) the marginal benefit of eating cookies is
Which of the following scenarios would increase a nation’s production possibility frontier (PPF)?(A) The nation’s system of higher education slowly declines in quality.(B) The nation invests in research and development of new technology.(C) The nation’s infant mortality rate increases.(D)
The figure above shows the production possibility frontiers (PPFs) for two nations that produce crabs and cakes. If these nations specialize and trade based on the principle of comparative advantage, which of the following trade agreements benefit both nations?(A) Nation A trades three crabs to
Which of the following is likely to have a demand curve that is the least elastic?(A) Demand for the perfectly competitive firm’s output(B) Demand for the oligopoly firm’s output with a homogenous product(C) Demand for the oligopoly firm’s output with a differentiated product(D) Demand for
The law of increasing costs is useful in describing(A) a demand curve.(B) a marginal benefit curve.(C) a linear production possibility frontier.(D) a concave production possibility frontier.(E) a total fixed costs curve.
Land, labor, capital and entrepreneurial talent are often referred to as(A) production possibilities.(B) goods and services.(C) unlimited human wants.(D) opportunity costs.(E) scarce economic resources.
The production of pork on large corporate hog farms generates pollution that seeps into the ground and can pollute the local well-water supply.(A) From society’s perspective, use marginal analysis to explain how the competitive market creates a misallocation of resources in the market for
Eli’s lemonade stand employs only labor and lemons to produce lemonade. The table below shows how total production changes at different combinations of labor and lemons. Lemonade sells in a competitive market at $1 per cup.(A) In competitive input markets, each hour of labor costs $6 to employ

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5 Steps To A 5 AP Microeconomics 2016 2nd Edition Eric R. Dodge - Solutions

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