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MICRO EXAM 1
Actual Qs and Ans Expert-Verified Explanation
This Exam contains:
-Guarantee passing score -31 Questions and Answers -format set of multiple-choice -Expert-Verified Explanation Question 1: Jeff finds some steaks for $16 for which he would have been willing to pay $20. The butcher notices the meat is near the expiration date and gives him an extra 75% off.
Answer:
Jeff experiences a consumer surplus of 16 dollars Question 2: You and other college students are deciding whether to major in music or engineering. You learn that there is a shortage of engineers, making it easy for engineering graduates to find employment, while there is a glut of musicians for whom finding a job is difficult. As a result, you and many other college students decide to major in engineering.Which economic principle does this illustrate?Specialization leads to economic efficiency.Changes in incentives are unlikely to change the decisions people make.Individuals do not normally take into account the decisions of other individuals.Markets tend to move towards equilibrium as individuals respond to incentives.Government intervention can improve efficiency when there is a market failure.
Answer:
Markets tend to move towards equilibrium as individuals respond to incentives.
Question 3: how an increase in the price of penne, a different type of pasta, and a decrease in the price of meatballs will affect the supply and demand of spaghetti pasta. Assume that producers of spaghetti pasta do not also produce penne.
Answer:
rightward shift of demand Question 4: Suppose that Georgiania was a thriving empire in its golden age. Business was booming and it was the center of international trade under the leadership of Emperor Raphael III. His empire's pride and joy was the trading of green and black tea, and he decreed that their entire economy should be built around it. However, in the mid 1800s, Georgiania experienced a severe economic downturn when the other nations of the world created an embargo on tea from Georgiania, which led to civil strife due to thousands of workers being laid off. A downward fluctuation in the economy like this is known as
Answer:
a recession Question 5: In a market-oriented economy, individuals' economic lives are said to be interrelated with many other individuals and firms.almost completely controlled by government regulation.illegal and in violation of government rules on prices and sales.based more on production than on consumption.
Answer:
interrelated with many other individuals and firms.Question 6: Please identify the statements about property rights as either true or false.1)property rights include the right to buy or sell ones resources or goods 2)property can be tangible or intangible 3)all countries are equally affective at enforcing property rights 4)the enforcement of property rights prevents many mutually beneficial transactions from happening.
Answer:
1) true
2) true
3) false
4) false
Question 7: Daniel has decided to open his own bakery using locally sourced ingredients and supplies. He provides income and jobs to local suppliers. He also provides his community with a place to buy delicious baked goods.This is an example ofa recession.market failure.the invisible hand.a command economy.
Answer:
the invisible hand.Question 8: Which decision is least likely to be well explained by marginal analysis?deciding whether to take a lunch break or knock on another door as a door-to-door salesperson deciding whether to do more sit-ups at the gym deciding which college to attend deciding how fast to go on the freeway deciding between watching another episode of your favorite TV series and going to bed
Answer:
deciding which college to attend Question 9: Andrew, a college student, loves drinking coffee late at night to study for exams.Having no income, he is used to buying cheap, bad-tasting coffee, such as Beanlightened, that he needs to grind and brew himself. The coffee tastes putrid but, with enough cream and sugar, Andrew is able to tolerate it. Occasionally, he does go out to Starbucks when he has spare money.After graduation, Andrew gets a job working at a database firm as a programmer. His income is now a healthy $75,000 a year, and he decides he has had enough bad-tasting coffee.He ends up buying coffee daily from Starbucks, even though it costs significantly more than Beanlightened.
- In economic terms, Starbucks coffee is for Andrew a(n)
- Beanlightened coffee is for Andrew a(n)
- Andrew's demand for Starbucks coffee changed as a result of
a change in a related good or service.a change in the number of consumers.a change in expectations.a change in technology.a change in income.
Answer:
- normal
- inferior
- change in income
Question 10: Actions intended to make economic outcomes fairer may cause efficiency to decrease.
Answer:
equity-efficiency trade?off
Question 11: The demand curve
Answer:
is a graphical representation of the relationship between price and quantity demanded.Question 12: The five-dollar Burger Joint gift card that your friend gave you for your birthday expires today. You can either use the gift card to buy yourself dinner at Burger Joint, or you can stay home and eat a delicious home-cooked meal.What is the opportunity cost of eating the home-cooked meal?
Answer:
The value of the ingredients that go into the home-cooked meal, and the value of a five-dollar dinner at Burger Joint.
Question 13: Which of the scenarios are examples of an economic signal?
Answer:
The market price for toilet paper has not changed over the last 10 years.Prices in housing markets fall.Purchases of floppy disks and CDs decline dramatically as the demand for online streaming of similar goods increases.Companies begin hiring more people after a long period of high unemployment in the United States.Question 14: The seaport town of New Monopoly has become extremely popular with shipping companies due to its superior location. The port has become so congested that ships must wait hours every day just to dock.The mayor of New Monopoly realizes that the congestion at the port costs the shipping companies and his town money.1)This is an example of 2)marginal analysis.3)a recession.4)a private good.market failure.Which decision would NOT move him towards a command economy?
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