Economics Micro Quiz Preparation Essay Paper

Economics Micro Quiz Preparation Essay Paper I have a test tonight from ECON1 and the professor handed us out the practices questions that would directly (she said) help me prepare for the test. I’m sorry to make you hurry, but it won’t be either long or tricky.

Economics Micro Quiz Preparation Essay Paper
Economics Micro Quiz Preparation Essay Paper

The answers to every question are already served at the bottom. What I want you to do is adding a brief easy explanation of each answer to every question (you could do it on any margin or make another space below the questions.

Economics Micro Quiz Preparation Essay Paper Practice Questions

  1. A society that is producing its maximum combination of goods and using all available resources for production:
  2. has minimized its opportunity cost.
  3. has maximized its opportunity cost.
  4. is operating on its production possibilities frontier (PPF).
  5. is operating outside its production possibilities frontier (PPF).
  6. has eliminated scarcity.
  7. How are changes in opportunity cost related to decision-making behavior?
  8. The lower the opportunity cost of doing an activity X, the more likely activity X will be done.
  9. The higher the opportunity cost of doing activity X, the more likely activity X will be done.
  10. Changes in the opportunity cost play no role in decision-making.
  11. The lower the opportunity cost of doing activity Y, the more likely activity X will be done.
  12. The higher the opportunity cost of doing activity Y, the less likely activity X will be done.
  13. An expectation of a lower price in the future will:
  14. increase current demand.
  15. decrease current demand.
  16. not change demand.
  17. cause demand to stay the same but increase the quantity demanded.
  18. cause demand to stay the same but decrease the quantity demanded.
  19. Which of the following will cause a movement along a good’s supply curve?
  20. an increase in the price of input
  21. the price of the good increases
  22. the production process of the good becomes more efficient
  23. more firms enter the market
  24. the government places a subsidy on the producer of the good
  25. Something is an inferior good if the demand for the good:
  26. increases as the consumer’s income increases.
  27. increases as the consumer’s income decreases.
  28. decreases as the price of a complement increases.
  29. decreases as the price of a substitute increases.
  30. decreases as the consumer’s income decreases.
  31. Which of the following would be expected to cause an increase in the supply of fax machines?
  32. An increase in the number of business firms demanding fax machines.
  33. An increase in the price of fax machines.
  34. A decrease in the cost of manufacturing fax machines.
  35. Both B and C.
  36. In the figure, point E is:
  37. an efficient point. b. unattainable with current resources.
  38. an inefficient point. d. the equilibrium.
  39. evidence that trade does not enrich society.
  40. An economy that produces cars and cakes is currently operating efficiently. What happens if the economy now experiences high unemployment?
  41. The PPF will shift outward.
  42. The PPF will shift inward.
  43. The economy will move from a point on the PPF to a point outside the PPF.
  44. The economy will move from a point on the PPF to a point inside the PPF.
  45. The economy will move along the PPF curve. The direction of movement depends on whether primarily autoworkers or cake bakers become unemployed.
  46. Suppose you’ve spent $200,000 obtaining your college degree, the marginal cost to finish is

Economics Micro Quiz Preparation Essay Paper

$100,000 and the marginal benefit is $150,000. Then definitely you:

  1. should complete your degree.
  2. should not complete your degree since the total cost will be $300,000 and the benefit

$150,000.

  1. should complete your degree only if the marginal cost is equal to or less than $200,000.
  2. obtain more information before making a decision.
  3. As a discipline, economics is best described by which of the following?
  4. the study of how to control the effects of government actions
  5. the study of how to control the preferences of consumers so that there will be enough resources to produce all the goods and services that consumers want
  6. the study of how to use scarce resources to satisfy unlimited wants and needs
  7. the study of how to dispose of excess goods and services that nobody wants
  8. the study of how to maximize profits for firms
  9. Which of the following is a macroeconomic question?
  10. How many textbooks should be published by a publisher?
  11. How much should English majors earn after college?
  12. How do members of a household decide whether to clean their own house or hire someone else to do it?
  13. What is the rate of unemployment?
  14. What is the price of a new 40-inch television?
  15. Which following change in the coffee market would shift the supply curve to the

right?

Economics Micro Quiz Preparation Essay Paper

  1. A study finds that drinking coffee leads to higher grades.
  2. The wage for employees in the coffee business decreases.
  3. The income in the economy increases.
  4. Firms expect the price of coffee to increase in the future.
  5. Fifty Starbucks coffee shops close down.
  6. The opportunity cost of any action is
  7. all the possible alternatives forgone.
  8. the best alternative forgone.
  9. the time required but not the monetary cost.
  10. the monetary cost but not the time required.
  11. Marginal benefit is the benefit
  12. that your activity provides to someone else.
  13. of an activity that exceeds its cost.
  14. that arises from the secondary effects of an activity.
  15. that arises from a small increase in an activity.
  16. When the price of an hour of tutoring increases,
  17. the demand for tutoring decreases.
  18. the demand for tutoring increases.
  19. the demand curve for tutoring shifts.
  20. the quantity demanded for tutoring increases.
  21. the quantity demanded for tutoring decreases.
  22. Which of the following is an example of a normative statement?
  23. Household consumption is the largest component of spending.
  24. Government spending rose in the 1980s.
  25. The business sector is the primary source of jobs.
  26. Households should save more.
  27. Human capital is
  28. all capital owned by individuals, but not by corporations or governments.
  29. all capital owned by individuals or corporations, but not by governments.
  30. machinery that meets or exceeds federal safety standards.
  31. the accumulated skill and knowledge of workers.

Point Production of X Production of Y

———————————————————————————

a 0 40

b 4 36

c 8 28

d 12 16

e 16 0


Economics Micro Quiz Preparation Essay Paper
  1. Refer to the table above. The opportunity cost of increasing the production of Y from 16 to

36 units is

  1. 4 units of X.
  2. 8 units of X.
  3. 10 units of X.
  4. 12 units of X.
  5. The opportunity cost for Elijah of going to a water park is:
  6. the price of the admission pass.
  7. zero, if he can go with his parents who will pay.
  8. zero, if it is raining that day and the water park is closed.
  9. the price of the admission pass plus the highest valued alternative activity Elijah could have done instead.
  10. the highest valued alternative activity Elijah could have done instead.
  11. You observe that more education is associated with more income and conclude that more income leads to more education. This would be an example of:
  12. the rule of rational choice.
  13. opportunity cost.
  14. the fallacy of composition
  15. confusing correlation with causation
  16. ceteris paribus

Economics Micro Quiz Preparation Essay Paper

Study Guide List scarcity law of supply microeconomics vs. macroeconomics buyer’s reservation price incentives seller’s reservation price ceteris paribus quantity demanded vs. demand confusing correlation with causation quantity supplied vs. supply fallacy of composition factors that shift demand curves

trade-offs/opportunity cost factors that shift supply curves marginal thinking law of increasing opportunity cost factors of production economic models production possibilities curve economic good vs economic bad law of demand rational self-interest invisible hand

Answers: 1C 2A 3B 4B 5B 6C 7B 8D 9A 10C 11D 12B 13B 14D 15E 16D 16D 17D

18B 19D 20D

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