PRIN MACROECONOMICS ECON 2010
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This 6 page Class Notes was uploaded by Bethany Conn on Tuesday October 13, 2015. The Class Notes belongs to ECON 2010 at Louisiana State University taught by C. Roussel in Fall. Since its upload, it has received 15 views. For similar materials see /class/223029/econ-2010-louisiana-state-university in Economcs at Louisiana State University.
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Date Created: 10/13/15
S P Equot 9 If the crossprice elasticity of demand for goods x and y is 025 then the two goods would be a Necessities have to have b Inferior goods buy when income decreases c Normal goods buy when income increase d Complements items that go hand in hand 2 I MUTEquot quot I 39 i H Iii 39 Q i ti Suppose that you live in a small town and you observe that in July 350 pizzas are purchased at a price of 12 each Later in August you observe that 300 pizzas are purchased at a price of 10 each Which of the following factors alone could have caused this change a The price of burritos a substitute for pizza increased I i cvl139wiewi 39 c A technological advance in pizza making decreases the cost of making a pizza d The price of tomato sauce an input in the production of pizza increased Suppose that you produce jewelry boxes and discover that the price elasticity of demand for your boxes is equal to 06 In order to increase your total revenue everything else held constant you should produce boxes and charge a price for them a More higher I n I lk 39m39 l n Lg wri c More lower d Fewer lower Suppose steak is a normal good Which of the following would cause the quantity of steak supplied to increase b An increase in labor costs in the slaughterhouse industry c A decrease in the price of steak d An increase in the effectiveness of llBeef its what s for dinner ads e A decrease in consumer income Suppose Jeff s price elasticity of demand for restaurant meals is 250 If the price of a restaurant meal decreases by 2 everything else held constant then the quantity of restaurant meals Jeff will demand will a Increase by 125 c Decrease by 125 d Increase by 25 e Increase by 5 Suppose that Mac and Cheese is an inferior good Suppose further that national income is increase while at the same time the number of sellers of Mac and Cheese is increasing as well Everything else held constant the equilibrium price of Mac and Cheese will and the equilibrium quantity sold will a Be ambiguous increase c Increase be ambiguous H O H H d Be ambiguous be ambiguous e Be ambiguous decrease Suppose the MP3 players and compact disc players are substitutes Everything else held constant when the supply of compact disc players decreases the MP3 players 2 m l 5 b Demand for deceases c Supply of decreases d Supply of increases Suppose you observe a market in which at a given point in time the quantity producers are willing and able to sell is greater than the quantity consumers are willing and able to buy Thus we say that there is a of the good and over time everything else held constant the price in the market will U b Shortage increase c Shortage decrease d Surplus increase quotAnother interest rate increase by the Federal Reserve should cause a decrease in inflationary pressures in the US is an example of a statement about a issue C Positive macroeconomic d Normativemicroeconomic Suppose the price of gasoline doubles tonight and remains there for the next 2 years Everything else held constant the price elasticity of demand for gasoline measured tomorrow when compared with the price elasticity measured two years from now will be a More elastic b The same ll Suppose a binding price ceiling is imposed on the market for peaches At the ceiling price everything else held constant the quantity of peaches demanded is the quantity supplied a Less than b Equal to L a h Suppose that apricots and kumquats are substitutes Suppose further that the price of apricots increases while at the same time workers in the kumquat industry receive wage increases Everything else held constant the equilibrium price of kumquats will and the equilibrium quantity of kumquats sold will a Be ambiguous be ambiguous l mu r39 in H Be ambiguous increase c d Be ambiguous decrease e Decrease be ambiguous 13 Suppose that milk benefits from a successful advertising campaign Everything else held constant this will cause the equilibrium price of milk to and the equilibrium quantity sold to a Increase decrease b Decrease increase c Decrease decrease 14 Suppose Federica while strolling down Via Condotti saw a beautiful Gucci evening bag in lavender patent leather that was priced at US 595 She however decided not to buy it Assuming Federica is a rational person we know that her reservation price for buying the evening bag was US 595 a Less than or equal to c Greater than d Equal to e Greater than or equal to 15 Suppose Remus decides to go fishing at Lake Pescaccio on his day off from work but he faces a choice he can fish the west south or east side of the lake His expected catch for the day is as follows 3 fish on the west side 4 fish on the couth side or 5 fish on the east side Everything else held constant Remus opportunity cost of fishing the west side of the lake is fish a 2 16 In which of the following situations MUST the demand for soap be price elastic a Total revenue decrease when the price of soap decrease b The price of soap decreases by 50 cents per bar and the quantity of soap demanded increases by 25 bars c Total revenue remains unchanged when th e price of soap increases l lU lflquot i 1 Iii m i w m i5 e The price of soap increases by 25 cents per bar and the quantity of soap demanded decreases by 50 bars Use the following to answer questions 1720 Cabbage per hour Potatoes per hour Maura 5 10 Sean 12 12 17 RD N 53 N N N In the above situation has the absolute advantage in producing cabbage and has the comparative advantage in producing potatoes a Maura Sean Sean Sean b Maura Maura c 1 LI 1 Mlzig hi f Maura and Sean engage in a mutually beneficial trade which of the following is a potential price for one cabbage a 13 potato b 23 potato mm d 3 potato Which of the following Statements accurately describe the pattern of specialization and trade in the case of Sean and Maura a Mutually beneficial trade cannot occur because Sean can produce more of both goods per hour than Maura can mi u g nrl ir1uiqi lll w 39 maul h i t c Mutually beneficial trade cannot occur because Maura can produce more of both goods per hour than Sean cam Maura s opportunity cost of producing one potato is b 1012 cabbage c 1210 cabbage d 2 cabbages e 5 cabbages Suppose that worker productivity is decreasing in the yellow ducky industry while at the same time the number of buyers of yellow rubber ducky s is decreasing Everything else held constant the equilibrium price of yellow rubber ducky s will and the equilibrium quantity sold will a Be ambiguous decrease b Increase be ambiguous d Decrease be ambiguous e Be ambiguous be ambiguous If there are many close substitutes for Good A then the good A would tend to be everything else held constant a Demand for income elastic b Supply of price elastic c Demand for income inelastic d Demand for price inelastic 23 N 4 N U39I N 0 f Supply of price inelastic Suppose Arthur a rational consumer would be willing to pay someone else 15 to wash his car but not 20 This implies that the benefit Arthur receives from having a clean car is a Less than 15 b Less than but not equal to 15 c Greater than to equal to 15 e Greater than 20 Which of the following CANNOT be determined solely by examining the graph of a production possibility frontier b What combination of outputs can be produced c What combinations of out outputs are efficient d How much less of one output can be produced if more of another is produced e How much output can be produced from a given level of inputs The burden of a tax falls more heavily on the side of the market that is relatively c More price elastic One of the articles posted on Blackboard is linked under the heading llsupply demand and college footballquot Answer true or false to the following statement In the article the auther argues that the decision by the NCAA to add a 12 h regualer season football game to this year s schedule has led to an excess demand in the market for games against weak opposition b False Suppose producers in the tire industry expect over half of their workers to go on strike next mouth Suppose further that consumers of tires are unaware of this upcoming labor action Everything else held constant the equilibrium price of tires will and the equilibrium quantity of tries sold will THIS month a Increase increase b Decrease increase c lli d Decrease decrease Suppose as hard as it may be that ice cream and pickles are complements Everything else held constant a decrease in the demand for pickles will cause in equilibrium price of ice cream a No change c A decrease A firm switching from a single price discrimination scheme in order to increase total revenue will the price for the group of consumers with the relatively price inelastic demand and th price for the group of consumers with the relatively pric elastic demand a Decrease decrease b Increase increase d Decrease increase
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