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by: Megan Lester

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ECON 101 In Class Practice/Review Questions Chapter 1-4 Econ 101

Marketplace > Washington State University > Econ 101 > ECON 101 In Class Practice Review Questions Chapter 1 4
Megan Lester
WSU
GPA 2.8

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ECON 101 In Class Practice/Review Questions Chapter 1-4
COURSE
Microeconomics
PROF.
Fr. Timmons
TYPE
Study Guide
PAGES
11
WORDS
CONCEPTS
Econ, Economics, Microeconomic, exam, Studyguide, practice problems
KARMA
50 ?

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This 11 page Study Guide was uploaded by Megan Lester on Wednesday September 28, 2016. The Study Guide belongs to Econ 101 at Washington State University taught by Fr. Timmons in Spring 2015. Since its upload, it has received 2 views.

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Date Created: 09/28/16
Ch. 1-4 Clicker Questions Thursday, January 29, 2015 11:01 AM Chapter 1 Principlesthat underlie Individual Choice • Core principles: 1. Resources are scarce. (a) 2. The Opportunity Cost of something is its true cost. (b) 3. We use cost-benefitanalysis to make decisions (“Howmuch?”) at the margin. (c) 4. We respond to incentives to make ourselves better off. (d) • Which of the 4 core principles apply to what you are doing here right now? Chapter 2 This production possibility frontier is? a) Bowed out from the origin because of increasing opportunity costs. b) Bowed in toward the origin because of increasing opportunity costs. c) Bowed in toward the origin because of constant costs of guns and butter. d) Linear because of constant costs. If an economy is producing at alternative W, the opportunity cost of producing at X is _____ unit(s) of consumer goods per period. a) 0 b) 1 c) 4 d) 18 A production possibilityfrontier that is a straightline sloping down from the left to right would suggestthat: a) More of both goods could be produced moving along the frontier. b) The two products must have the same price. c) The opportunity costs of the products are constant. d) There are not opportunitycosts. The opportunity cost of producing 1 unit of coffee for Brazil is? a) 2 salmon b) ¼ salmon. c) 1 salmon. d) ½ salmon. Can any point be both allocative and productively efficient? a) Yes b) No c) Maybe The movement from curve 1 to curve 2 indicates? a) Economic growth b) A decrease in the level of technology c) Instability d) An increase in the level of technology. e) A and/or D Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges. The opportunity cost of producing 1 box of oranges for Westland is? a) 1 box of peaches. b) ¼ box of peaches. c) 4 boxes of peaches. d) 10 boxes of peaches. Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges. The opportunity cost of producing 1 box of oranges for Eastland is? a) 1 box of peaches. b) ¼ box of peaches. c) 4 boxes of peaches. d) 10 boxes of peaches. Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges. The opportunity cost of producing 1 box of peaches for Westland is? a) 1 box of oranges. b) ¼ box of oranges. c) 4 boxes of oranges. d) 10 boxes of oranges. Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges. The opportunity cost of producing 1 box of peaches for Eastland is? a)4 box of oranges. b) ¼ box of oranges. c) 1 boxes of oranges. d) 10 boxes of oranges. Eastland and Westland produce only two goods, boxes of peaches and boxes of oranges. What will each specializein? a) Eastland Oranges, Westland Peaches b) Eastland Peaches, Westland Oranges c) Eastland Oranges and Peaches d) Westland Oranges and Peaches Chapter 3 Price is an important signal in the market i. It tells producers what to do regarding supply. ii. It tells consumers what to do regarding demand. iii. The relative value of materials and equipment. What am I missingin the list? a) Promotesefficiency. b) Brings people together – cooperation c) It informs the market about the importance consumers place in a good or service. c) It informs the market about the importance consumers place in a good or service. d) It helps signal wages and investments. e) All of the above A decrease in the price of a good will result in? a) An increase in demand b) An increase in supply c) An increase in quantity demanded d) More being supplied e) Lower profits Which of the following examples illustratesthe law of demand? a) An increase in tuition encourages more students to enroll in college because the quality of education has risen. b) Consumersbuy more personal computersbecause prices have fallen. c) Oil companies drill for new sources of oil because oil prices are higher. d) Fewer people play golf because incomes are lower. If George, Barbara, and Dan are the only three buyers in the market and the price of a bag of chocolate‐covered peanuts is \$0.80,the total market demand is ___ bags per month. a) 70 b) 80 c) 105 d) 280 e) 140 Look at the figure for the market of Gasoline. The initial equilibrium price and quantity (at intersection of and D) of gasoline is? of and D) of gasoline is? a) \$2 and 450 gallons b) \$1.50 and 400 gallons c) \$2.00 and 200 gallons. d) \$2.50 and 300 gallons. Given the equilibrium after a change in supply from to , what can you conclude? a) At the old price of \$2.50,there will be pressure for the price to fall. b) The new price will be \$2.00 c) The new quantity will be 600 d) The price will remain constant. Which of the following would NOT shift Demand for RC Cola? a) Income b) Taste/Preferences c) Price of a related good d) Sugar syrup e) Inflation Which of the following would NOT shift Supply for RC Cola? a) Labor b) Inflation c) A study that says drinking RC Cola reduces risks for heart attack d) 7UP becomesTHE lemon‐limesoda of the NFL/NBA/NHL e) RC Cola Southwest Canada is allowed into the market If the demand for tires goes down when the price of gas goes up, then tires and gas are? a) Substitutes b) Complements c) Both expensive d) Both inexpensive e) Inferior goods. A good is inferior if which of the following is true? a) When incomeincrease, the demand remains unchanged. b) When income increase, the demand decreases. c) When income increases, the demand increases. d) Income and demand are unrelated. Raclette is a popular wintertimedish in Switzerland. It is essentiallymelted Raclette cheese over boiled new potatoes. If the price of Raclette cheese decreased, we would expect to see? a) An increase in demand for Raclette cheese. b) An increase in demand for new potatoes. c) No effect on the demand for either the Raclette ingredients, since this is a traditional dish and its consumption does not depend on the prices of the ingredients. d) An increase in demand for Raclette cheese and for new potatoes. When the economy suffers a downturn and the incomes of many people decrease, vacationers are more likely to take car trips than to fly. Which of the following provides one possible explanation for this phenomenon? a) Air travel and vacation travel by car are complementarygoods. b) Air travel and vacation travel by car are both normal goods. c) Air travel is a normal good and vacation by car is an inferior good. d) Air travel is an inferior good and vacation travel by car is a normal good. The following shows the market for DVDs. Which graph represents the effect of a decrease in the price of DVD players? a) A b) B c) C d) D If coconuts are a normal good and the income level of consumer falls, it willbe represented in the figure as a movement from… a) A to C b) B to A c) C to A d) E to B Now, look at the figure for Supply of coconuts. If the price of coconuts decreased, it would be Now, look at the figure for Supply of coconuts. If the price of coconuts decreased, it would be represented in the figure as a movement from… a) A to B b) B to A c) C to A d) E to B Now, look at the figure for Supply of coconuts. If the prices of inputs used to produce and transport coconuts decreased, it would be represented in the figure as a movement from… a) A to B b) B to A c) C to A d) E to B When the supply curve shifts from the initial equilibrium, the new intersection of supply and demand ( ) has a price of ____ and quantity of 400. This supply shift could have resulted from ____. a)\$1.50;an increase in consumer’s income. b) \$1.50;an increase in refining technology. c) \$2.00; an increase in the number of buyers. d) \$2.00;an increase in consumers’ income. If a price of \$10 temporarilyexists in this market, what willbe the result? a)A shortage of 10,000bushels. b) A shortage of 8,000bushels. c) A surplus of 8,000bushels. d) A surplus of 4,000 bushels. If a price of \$8 temporarily exists in this market, what will be the result? a)A shortage of 4,000bushels. b) A shortage of 6,000bushels. c) A surplus of 6,000bushels. d) A surplus of 4,000 bushels. Look at the figure for the market of Gasoline. The initial equilibrium price and quantity (at intersection of 1and D) of gasoline is? a) \$2 and 450 gallons b) \$1.50 and 400 gallons c) \$2.00 and 200 gallons. d) \$2.50 and 300 gallons. Chapter 4 What does Consumer and Producer Surplus tell us? a. How much of the market consumersand producers benefit from. b. A means of comparing different marketoutcomes. c. The willingness to pay and willingness to accept. c. The willingness to pay and willingness to accept. d. A way to determine Supply and Demand. e. All of the above Each side of the marketfollowsits Law. First thing first, what is the equilibrium price and quantity? Why is this important? a. Tell us what the market conditions are at this point in time. b. Because you asked. c. It is an importantpiece of information to measure CS and PS. d. A and C e. None of the above

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