ECON-2006EG Study Guide - Quiz Guide: Nash Equilibrium, Comparative Advantage, Price Controls
Document Summary
Get access
Related Documents
Related Questions
Question 16
Points outside the production possibility frontier are
producible. | ||
unattainable. | ||
endowment points. | ||
consumer equilibrium points. |
5 points
Question 17
Pareto points in the Edgeworth Box are
found when utility curves are tangent | ||
found when MRS are equal. | ||
found when one person cannot be made better off without making another person worse off. | ||
all of the above. |
5 points
Question 18
The marginal rate of substitution is
The absolute value of the slope of the indifference curve. | ||
the slope of the contract curve. | ||
the slope of the utility possibilities curve. | ||
none of the above. |
5 points
Question 19
The absolute value of the slope of the production possibilities curve is the
marginal rate of substitution | ||
contract curve. | ||
marginal rate of transformation. | ||
Engel curve. |
5 points
Question 20
The First Fundamental Theorem of Welfare Economics requires
producers and consumers to be price takers. | ||
that there be a market for every commodity. | ||
that the economy operate at some point on the utility possibility curve. | ||
all of the above. |
Question 1
During a crisis such as Hurricane Katrina, governments often make it illegal to raise the price of emergency items like flashlights and bottled water. In practice, this means that these items get sold on a first-come, first-served basis. If a person has a flashlight that she values at $5, but its price on the black market is $40, what gains from trade are lost if the government shuts down the black market?
$30 | ||
$35 | ||
$40 | ||
Indeterminant with the given information. |
2 points
Question 2
Which of the following is an example of a price floor?
A sale price with a limit on the quantity you can purchase. | ||
Rent-controlled apartments | ||
Predatory pricing designed to put a competitor out of business. | ||
The minimum wage |
2 points
Question 3
Airline regulation of the 1970s produced a similar result to which of the following government interventions?
The Affordable Care Act | ||
Minimum wage laws | ||
Rent control laws | ||
Communism |
2 points
Question 4
Which of the following is a possible effect of a price ceiling?
A surplus of the good. | ||
Increases in product quality. | ||
Increased gains from trade. | ||
People will waste time in lines waiting to purchase the good. |
2 points
Question 5
What is a price ceiling?
A minimum price consumers are willing to pay. | ||
A minimum price allowed by law. | ||
A maximum price allowed by law. | ||
A maximum price consumers are willing to pay. |
2 points
Question 6
Why are the long lines generated by a shortage worse than paying a higher price in money?
It is not better or worse. Paying in time and paying in money are essentially the same in a market economy. | ||
Paying with time reduces the value of money, and prevents valuable trades from occurring. | ||
Waiting in line is a waste of a valuable resource: time. Paying a price in money transfers the value of resources from one person to another, and maximizes the value of resources. | ||
Paying with time gives those who do not work an advantage over those who do. |
2 points
Question 7
Which of the following is a possible effect of a price floor?
The quantity supplied exceeds the quantity demanded. | ||
Increased gains from trade. | ||
Decreases in product quality. | ||
A shortage of the good. |
Michael spends all of his income on coffee and donuts. A coffee costs $2.50 and a donut costs $2.00. At his current consumption level, the marginal utility for coffee is 30 utils, and the marginal utility for a donut is 60 utils. Which statement best describes what Michael needs to do to maximize his utility?
Question 1 options:
| |||
| |||
| |||
|
Question 2
What is it called when the marginal utility derived from the last dollar spent on each good is the same across all goods and the last dollar spent uses all of the available budget for the purchase of those goods?
Question 2 options:
| |||
| |||
| |||
|
Question 3 (1 point)
What does the economic theory of marginal utility infer?
Question 3 options:
| |||
| |||
| |||
|
Question 4
Kate is addicted to chocolate and does not care how much it costs. In fact, she spends more than $20 a week on chocolate. What can be concluded about elasticity in her buying decisions?
Question 4 options:
| |||
| |||
| |||
|
Save
Question 5 (1 point)
Why does the demand for a good become relatively more elastic?
Question 5 options:
| |||
| |||
| |||
|
Save
Question 6 (1 point)
Assume the price of chicken per pound is $3.49 and that Americans purchase 10 million pounds per chicken every month. If the price of chicken increases to $5.49 per pound, identify what will occur to consumer surplus?
Question 6 options:
| |||
| |||
| |||
|
Question 7 (1 point)
What is another name for the difference between the price that consumers are willing to pay for a good and a lower price that they may actually have to pay?
Question 7 options:
| |||
| |||
| |||
|
Question 8
Adam, Brian, Robert, and Sam all want to attend a football game. The admission price is $48. Adam is willing to pay $59 for the ticket. Brian is willing to pay $39. Robert is willing to pay $45, and Sam is willing to pay $55. Based on this information, who will go to the game?
Question 8 options:
| |||
| |||
| |||
|
Save
Question 9 (1 point)
Lily is willing to pay $10 for one bracelet and $5 for a second. Patty is willing to pay $12 for one bracelet and $2 for a second. If the price is currently $8 per bracelet, identify what is the total consumer surplus after Lily and Patty make their purchases?
Question 9 options:
| |||
| |||
| |||
|
Question 10 (1 point)
Manfred is willing to shovel one driveway for $25, a second for $30, and a third for $35. Assume that the market rate for shoveling driveways is $32. How many driveways will Manfred shovel, what will be his total revenue, and what will be his producer surplus?
Question 10 options:
| |||
| |||
| |||
|
Save
Question 11 (1 point)
What would the difference between the price that producers receive and the lower price at which they are willing to sell the good be called?
Question 11 options:
| |||
| |||
| |||
|
Save
Question 12 (1 point)
What will happen when there is an increase in the price of eBook downloads?
Question 12 options:
| |||
| |||
| |||
|
Save
Question 13 (1 point)
When is price elasticity of demand utilized to measure how an individual changes the quantity they demand?
Question 13 options:
| |||
| |||
| |||
|
Save
Question 14 (1 point)
Assume Mary consumes only tea and pastries. A cup of tea costs 5 euros and a pastry costs 8 euros. Her weekly income is 450 euros. Mary always drinks 2 cups of tea for every pastry she consumes. What is Maryâs optimal weekly consumption bundle?
Question 14 options:
| |||
| |||
| |||
|
Save
Question 15 (1 point)
When is producer surplus a positive value?
Question 15 options:
| |||
| |||
| |||
|