Jrh10d http www studyblue com notes note n micro test 1docx file 840876 Microeconomics Clicker Questions Q2 1 When voluntary trade occurs which statement do you believe is the most accurate Both people gain some value Q2 2 Sam values his boat at 4 000 and Brenda values it at 9 000 If Brenda buys it from Sam for 7 000 which of the following is true Brenda gains 2 000 Q2 3 When property rights are clearly defined and enforced private owners will develop and direct their property toward uses that others value highly because the market will generally reward them for doing so Q2 4 Over time an increase in a person s education stock of human capital will shift that person s production possibilities curve outward Q2 5 According to the law of comparative advantage both individuals and nations will be able to produce a larger joint output if each productive activity is undertaken by the low opportunity cost producer Q2 6 If Kim can either wash 10 cars or wax 2 cars during a day and Vince can wash 17 cars or wax 2 cars during the day the according to the law of comparative advantage their total output can be expanded if Kim specializes in waxing and Vince in washing Q2 8 When voluntary trade occurs which statement is the most accurate both people gain some value Q3 1 When you go to the store what is the MOST IMPORTANT factor that determines what you buy and how much you buy all are correct opinion based Q3 2 Consumers buy less of a good as its price increases because substitute good are now relatively cheaper the income of consumers have relatively decreased Q3 3 Which of the following best explains the source of consumer surplus for Good A many consumers would be willing to pay more than the market price for Good A Q3 4 When economists say the demand for a product has increased they mean the demand curve has shifted to the right Q3 5 When economists say the quantity demanded of a product has decreased they mean the price of the product has risen and consequently consumers are buying less Q3 6 If air travel and bus travel are substitutes a decrease in the price of bus travel will decrease the demand for air travel Q3 7 If coffee and cream are compliments an increase in the price of coffee will cause the demand for cream to fall Q3 8 According to the law of supply producers are willing to supply larger amounts of a good as its price increases Q3 9 When economists say the supply of a product has increased they mean supply has shifted to the right Q3 10 When economists say the quantity supplied of a product has decreased they mean the price of the product has fallen and consequently suppliers are producing less of it Q3 11 How will an increase in lumber prices influence the home construction market the supply of newly constructed homes will decrease Q3 12 If the demand for a good decreased what would be the effect on the equilibrium price and quantity price would decrease and quantity would decrease Q3 13 If Georgia experiences a late frost that damages the peach crop we should expect that the supply curve for peaches to shift to the left and the price of peaches to rise Q3 14 If there is a simultaneous increase in demand and an increase in supply we would expect an increase in price and an increase in quantity a decrease in price and an increase in quantity Q3 15 Which of the following is a major implication of the invisible hand when directed by competitive market prices the action of self interested individuals will tend to promote overall economic prosperity Q7 1 If FSU raised tuition 5 for the next academic year would you return to the university all are correct opinion based Q7 2 If FSU raised tuition 10 for the next academic year would you return to the university all are correct opinion based Q7 3 If a large percent increase in the price of a good results in a small percent reduction in the quantity demanded of a good demand is said to be relatively ineleastic Q7 4 When economists say the demand for a good is highly inelastic a large percentage change in the price of a good will result in only a small percent change in the quantity demanded Q7 5 Members of the Alpha Fraternity have developed a strong liking for Coca Cola Beta Fraternity members buy the same amount of Coca Cola but believe Pepsi is just as good From this we can infer compared to Alpha members Betas will have a larger price elasticity of demand for Coca Cola Q7 6 The firm wants to increase revenue Should it raise or lower prices all are correct depends elasticity of demand Q7 7 Suppose E 0 52 and the firm raises price What happens to TR TR rises Q7 8 Suppose the firm wants to raise TR and it knows demand is elastic What should the firm do look at chart lower price Q7 9 In which of the following cases will total spending on a good decrease demand is elastic and price increases demand is inelastic and price decreases Q8 1 The costs of a firm indicate the desire of consumers for other goods that might have been produced with the same resource Q8 2 When a firm is earning economic profit which of the following are false the firm is reducing the value of the resources that it is using the firm is creating less value for consumers than another firm that is currently earning losses Q8 3 The short run is a time period such that the existing firm in the market does not have sufficient time to increase the size of their existing plant or build a new factory Q8 4 The long run is a period of sufficient length to allow a firm to alter its plant size and capacity and all other factors of production Q8 5 As output is expanded if MC is more than ATC ATC must be increasing Q8 6 The short run average total cost of a firm will tend to be U shaped because at small output rates ATC will be high while at large output rates MC will be high as the result of diminishing returns and over utilization of the plant Q8 7 A downward sloping portion of a long run average total cost curve is the result ofeconomies of scale Q8 8 In the long run a firm might experience rising per unit costs due to diseconomies of scale Q4 1 An increase in the number of students attending college would tend to increase the demand for college professors increase the number of college professors employed increase wages of college professors Q4 2 What would happen in a market when a price ceiling was set above equilibrium price equilibrium price would become market price Q4 3 When a shortage of a good is present due to a price ceiling …
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