Yen Econ 2000 Dr Beland Of ce Hours Tue 01 00 02 30pm Thurs 01 00 02 30pm 39 Allen Sessions time Tue 06 30 08 00pm Thurs 06 30 08 00pm 101 Tureaud Email ytan5 tigers lsu edu Mid term Review Session Econ 2000 Chapter 1 10 Principles Opportunity cost Problems 1 All economic questions are about A how to make money B what to produce C how to cope with scarcity D how to satisfy all our wants 2 Scarcity is a situation in which A people cannot satisfy all their wants B most people can get only bare necessities C people can satisfy all their wants D some people can get all they want and some cannot 3 Scarcity requires that people must A cooperate B compete C make choices 4 Because we face scarcity every choice involves A money B the question what C giving up something for nothing D an opportunity cost 5 The opportunity cost of any action is A all the possible alternatives given up B the highest valued alternative given up C the bene t from the action minus the cost of the action D the dollars the action cost 6 You have the choice of going on vacation to Florida for one week staying at work for the week or spending the week doing x up projects around your house If you decide to go to Florida the opportunity cost of the trip is A working and doing x up projects Copyrights 2015 All rights reserved Yen 1 of 30 Yen Econ 2000 Dr Beland Of ce Hours Tue 01 00 02 30pm Thurs 01 00 02 30pm 39 Allen Sessions time Tue 06 30 08 00pm Thurs 06 30 08 00pm 101 Tureaud Email ytan5 tigers lsu edu otherwise B working or doing x up projects depending on which you would have done C working because you would be giving up dollars D nothing because you will enjoy the trip to Florida 7 You decide to take a vacation and the trip costs you 2000 While you are on vacation you do not go to work where you would have earned 750 In terms of dollars the opportunity cost of the vacation is A 2000 B 750 C 2750 D 1250 8 Joe likes to sleep late in the mornings and play tennis in the afternoons The opportunity cost of Joe attending his morning class for one hour is A an hour of tennis given up B an hour of sleep given up C both the tennis given up and the sleep given up D nothing because he is paying for his class 9 John has two hours of free time this evening He ranked his alternatives rst go to a concert second go to a movie third study for an economics exam and fourth answer his e mail What is the opportunity cost of attending the concert for John A attending a movie B studying for an economics exam C answering his e mail D attending a movie studying for an economics exam and answering his email Copyrights 2015 All rights reserved Yen 2 of 30 Yen Econ 2000 Dr Beland Of ce Hours Tue 01 00 02 30pm Thurs 01 00 02 30pm 39 Allen Sessions time Tue 06 30 08 00pm Thurs 06 30 08 00pm 101 Tureaud Email ytan5 tigers lsu edu 10 Nick and Ani are both given free tickets to see a movie Both decide to see the same movie We know that A both bear an opportunity cost of seeing the movie because they could have B both bear the same opportunity cost of seeing the movie because they are C it is not possible to calculate the opportunity cost of seeing the movie because D the opportunity cost of seeing the movie is zero because the tickets were free done other things instead of seeing the movie doing the same thing the tickets were free Chapter 4 The Market Forces of Supply and Demand Law of Demand Moves along the demand curve vs Shifting the demand curve Demand curve shifters Moves along the curve Income price Number of buyers quantity demanded Price of related goods Taste Expectations Copyrights 2015 All rights reserved Yen 3 of 30 Yen Econ 2000 Dr Beland Of ce Hours Tue 01 00 02 30pm Thurs 01 00 02 30pm 39 Allen Sessions time Tue 06 30 08 00pm Thurs 06 30 08 00pm 101 Tureaud Email ytan5 tigers lsu edu Law of Supply Supply curve shifts VS Moves along the supply curve Supply curve shifters VS Moves along the supply curve Supply Curve Shifters Movement along the curve Copyrights 2015 All rights reserved Yen 4 of 30 Yen Econ 2000 Dr Beland Of ce Hours Tue 01 00 02 30pm Thurs 01 00 02 30pm 39 Allen Sessions time Tue 06 30 08 00pm Thurs 06 30 08 00pm 101 Tureaud Email ytan5 tigers lsu edu Surplus Shortage 4 Ambiguous Situation 1 Demand increase Supply increase 2 Demand decrease Supply decrease 3 Demand decrease Supply increase 4 Demand increase Supply decrease Cheatsheet Table Copyrights 2015 All rights reserved Yen 5 of 30 Yen Econ 2000 Dr Beland Of ce Hours Tue 01 00 02 30pm Thurs 01 00 02 30pm 39 Allen Sessions time Tue 06 30 08 00pm Thurs 06 30 08 00pm 101 Tureaud Email ytan5 tigers lsu edu Problems 11 The law of implies that as price fall A demand demand increases B demand demand falls C demand quantity demanded increases D supply supply increases A a change in income B a change in wealth C a change in the price of Blu ray discs D a change in the price of DVDs 13 12 Which of the following will NOT cause a shift in demand curve for DVDs Refer to gure above Which of the following would be most likely to cause the demand for Dr Pepper to shift from D0 to D1 A an increase in income assuming that Dr Pepper is a normal good B a decrease in the price of 7 UP assuming 7 UP is a substitute for Dr Pepper C an increase in the price of Dr Pepper D an increase in the price of sugar used to make Dr Pepper 14 If the demand for green tea increases as income increases green tea is a n A Complementary good B substitute good C inferior good D normal good Copyrights 2015 All rights reserved Yen 6 of 30 Yen Econ 2000 Dr Beland Of ce Hours Tue 01 00 02 30pm Thurs 01 00 02 30pm 39 Allen Sessions time Tue 06 30 08 00pm Thurs 06 30 08 00pm 101 Tureaud Email ytan5 tigers lsu edu 15 Refer to g above As your income decreased the demand for X shifted from D1 to D2 Good X is A an inferior good B a substitute good C a normal good D a complement good 16 During an economic upturn when consumer income rises the demand for caviar increases and demand for hummus decreases This implies that caviar A and hummus are complements B is a normal good and …