ECON 202-501 Name
ECON 202-501 Spring 2008 Raul Ibarra-Ramirez
Name: ______________________________________________ Number of questions with no explanation provided: ___________ Assignment 1 Due on February 11th (in class)
Instructions: All assignment problems require you to provide a brief explanation, either a graph, calculation, analytical work or explaining some concept. You are encouraged to work in groups for the assignment, but this will be turned in individually. The day that the assignment is due please bring: 1) Your answers in a big scantron answer sheet 2) Your assignment sheet showing your work in every problem. Please fill in your name and the number of questions for which you have not provided an explanation in the upper right part of this sheet. This number should be zero to guarantee full credit on this assignment. For true/ false questions true will be choice A and false will be B. I would suggest you to start to work on the corresponding questions as soon as we finish each chapter, but not before than that. Enjoy!! CHAPTER 1 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) You spent a total of $5 buying songs for your MP3 player. After you buy one more song, your total cost rises to $6. The marginal cost of the last song that you bought is ________. A) $0.50 B) $1.00 C) $5.00 D) $6.00 2) Studying how Bob's firm decides to produce one more unit of output is an example of A) microeconomics. B) descriptive economics. C) macroeconomics. D) industrial organization . 3) Which of the following is a positive question? A) Should the minimum wage be set at one-half the average manufacturing wage to guarantee individuals a decent standard of living? B) Will the level of teenage unemployment increase if the minimum wage is increased? C) Wouldnʹt it be more equitable if the minimum wage increased automatically with the cost of living? D) Wouldnʹt it be better to try to increase peopleʹs wages through job-training programs than by requiring employers to pay minimum wages?
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Refer to the information provided in Scenario 1 below to answer the questions that follow. SCENARIO 1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in the minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers. 4) Refer to Scenario 1. The statement,ʺthe minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers,ʺis most likely an example of ________ economics. A) microeconomic B) normative C) positive D) descriptive 5) Refer to Scenario 1. The process of collecting data on minimum wage and teenage unemployment levels is an example of A) descriptive economics. B) law and economics. C) economic history. D) econometrics. 6) There is a possibility that a national sales tax will be implemented. Many economists argue that items such as food and clothing should be exempt from such a tax because low-income people spend a greater percentage of their income on these goods than high-income individuals. This argument is motivated by concerns over A) efficiency. B) equity. C) economic growth. D) economic stability.
Refer to the information provided in Figure 1.3 below to answer the questions that follow.
Figure 1.3 7) Refer to Figure 1.3. The slope of the line between the origin and Point B is A) 5. B) -2. C) 2. D) 0.5. 8) The slope of a vertical line is A) zero. C) infinite.
B) continually changing. D) negative.
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Refer to the information provided in Figure 1.5 below to answer the questions that follow.
Figure 1.5 9) Refer to Figure 1.5. Which of the curves has a slope that is negative and increasing? A) A B) B C) C D) D CHAPTER 2 Refer to the information provided in Table 2.1 below to answer the following questions. Table 2.1
10) Refer to Table 2.1. Andrew's opportunity cost of designing one Web site is A) 1/4 of a brochure. B) 2 brochures. C) 4 brochures. D) 8 brochures. 11) Refer to Table 2.1. ________ has a comparative advantage in ________ brochures. A) Matthew; both Web site design and in B) Andrew; both Web site design and in C) Andrew; Web site design and Matthew has a comparative advantage in D) Matthew; Web site design and Andrew has a comparative advantage in 12) Because resources are scarce, the opportunity cost of investment in capital is A) zero. B) forgone future consumption. C) infinite. D) forgone present consumption.
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Refer to the information provided in Figure 2.4 below to answer the questions that follow.
Figure 2.4 13) According to Figure 2.4, which point cannot be obtained with the current resources and state of technology? A) A B) B C) C D) F 14) According to Figure 2.4, as the economy moves from Point D to Point A, the opportunity cost of additional trucks, measured in terms of cars foregone, A) decreases. B) remains constant. C) increases. D) initially increases, then decreases.
Refer to the information provided in Figure 2.5 below to answer the questions that follow.
Figure 2.5 15) Refer to Figure 2.5. For this economy to move from Point B to Point C so that an additional 10 laptop computers could be produced, production of desktop computers would have to be reduced by A) fewer than 20. B) exactly 20. C) more than 20. D) exactly 40.
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16) Refer to Figure 2.5. The best point for society would be A) at any of the labeled points, as all of the points represent an efficient allocation of resources. B) either Point B or Point C, as the total amount being produced at either of these points is approximately the same. C) Point C, as at this point there are approximately equal amounts of desktop and laptop computers being produced. D) indeterminate from this information, as we donʹt have any information about the societyʹs desires.
17) In terms of the production possibility frontier, an increase in productivity attributable to new technology would best be shown by a A) movement from a point inside the frontier to a point on it. B) movement along the frontier. C) shift of the production possibility frontier outward, away from the origin. D) movement toward the origin. 18) Consider two countries, Germany and Sweden. Germany devotes a larger portion of its production to capital. Which of the following statements is most likely true? A) Germanyʹs production possibility frontier will shift up and out farther and faster than Swedenʹs. B) Germany is a poorer country than Sweden. C) Germany will move up its production possibility curve faster than Sweden. D) Sweden is producing inside its production possibility frontier, whereas Germany is producing at a point on its production possibility frontier. CHAPTER 3 19) Which of the following explains the law of demand? A) A normal versus inferior good effect B) A tastes and preferences effect C) The law of diminishing marginal utility D) The law of output increasing at a decreasing rate 20) During an economic downturn when consumer income falls, the demand for ice cream cones increases and the demand for chocolate cheesecake decreases. This implies ice cream cones A) are an inferior good and chocolate cheesecake is a normal good. B) and chocolate cheesecake are complements. C) are an economic bad and chocolate cheesecake is an economic good. D) are a normal good and chocolate cheesecake is an inferior good.
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Refer to the information provided in Figure 3.7 below to answer the following questions.
Figure 3.7 21) Refer to Figure 3.7. If pizza and beer are complementary goods, a decrease in the price of beer will cause a movement from Point B on demand curve D2 to A) demand curve D1. B) Point C on demand curve D2. C) Point A on demand curve D2. D) demand curve D3. 22) Refer to Figure 3.7. A(n) ________ will cause a movement from Point C to Point B on demand curve D2. A) decrease in the price of hamburgers, assuming that pizza and hamburgers are substitutes B) decrease in the price of pizza C) decrease in income, assuming pizza is a normal good D) increase in the price of pizza
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 23) If cameras and films are complements, then a decrease in the price of cameras will result in a decrease in the demand for film.
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 24) A frozen food manufacturer can produce either pizzas or calzones. As the result of a rise in the price of calzones, the firm produces more calzones and fewer pizzas. An economist would explain this by saying A) there has been an increase in the quantity supplied of calzones and a decrease in the supply of pizza. B) the supply of calzones increased and the quantity supplied of pizza decreased. C) the supply of calzones increased and the supply of pizzas decreased. D) there has been an increase in the quantity supplied of calzones and a decrease in the quantity supplied of pizzas.
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Refer to the information provided in Figure 3.11 below to answer the following questions.
Figure 3.11 25) Refer to Figure 3.11. An increase in the price of pizza sauce will cause a movement from Point B on supply curve S2 to A) supply curve S3. B) Point C on supply curve S2. C) Point A on supply curve S2. D) supply curve S1.
Refer to the information provided in Table 3.1 below to answer the questions that follow. Table 3.1
26) Refer to Table 3.1. If the price per pizza is $10, the price will A) fall because there is an excess supply in the market. B) fall because there is an excess demand in the market. C) remain constant because the market is in equilibrium. D) rise because there is an excess demand in the market.
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Refer to the information provided in Table 3.2 below to answer the questions that follow. Table 3.2
27) Refer to Table 3.2. In this market there will be an excess demand of 150 gardenburgers at a price of A) $6. B) $8. C) $10. D) $12. 28) Improvements in technology have reduced the cost of producing personal computers. As a result, you accurately predict that in the market for personal computers, there will be a(n) A) increase in the quantity supplied of personal computers, a reduction in the price, and an increase in the quantity demanded. B) decrease in the supply of personal computers, an increase in the price, and a decrease in the demand. C) increase in the supply of personal computers, a decrease in the price, and an increase in the quantity demanded. D) increase in the supply of personal computers, a reduction in the price, and an increase in the demand. 29) A(n) ________ in equilibrium ________ will occur when there is an increase in the supply of and decrease in demand for cassette tapes. A) increase; quantity B) increase; price C) decrease; price D) decrease; quantity 30) Apples and oranges are substitute goods. A freeze in Florida destroyed a good portion of the orange crop. Ceteris paribus, the price of A) both apples and oranges will fall. B) oranges will rise and the price of apples will fall. C) oranges will fall and the price of apples will rise. D) both apples and oranges will rise.
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Name: ______________________________________________ Number of questions with no explanation provided: ___________ Assignment 1 Due on February 11th (in class)
Instructions: All assignment problems require you to provide a brief explanation, either a graph, calculation, analytical work or explaining some concept. You are encouraged to work in groups for the assignment, but this will be turned in individually. The day that the assignment is due please bring: 1) Your answers in a big scantron answer sheet 2) Your assignment sheet showing your work in every problem. Please fill in your name and the number of questions for which you have not provided an explanation in the upper right part of this sheet. This number should be zero to guarantee full credit on this assignment. For true/ false questions true will be choice A and false will be B. I would suggest you to start to work on the corresponding questions as soon as we finish each chapter, but not before than that. Enjoy!! CHAPTER 1 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) You spent a total of $5 buying songs for your MP3 player. After you buy one more song, your total cost rises to $6. The marginal cost of the last song that you bought is ________. A) $0.50 B) $1.00 C) $5.00 D) $6.00 2) Studying how Bob's firm decides to produce one more unit of output is an example of A) microeconomics. B) descriptive economics. C) macroeconomics. D) industrial organization . 3) Which of the following is a positive question? A) Should the minimum wage be set at one-half the average manufacturing wage to guarantee individuals a decent standard of living? B) Will the level of teenage unemployment increase if the minimum wage is increased? C) Wouldnʹt it be more equitable if the minimum wage increased automatically with the cost of living? D) Wouldnʹt it be better to try to increase peopleʹs wages through job-training programs than by requiring employers to pay minimum wages?
1
Refer to the information provided in Scenario 1 below to answer the questions that follow. SCENARIO 1: An economist wants to understand the relationship between minimum wages and the level of teenage unemployment. The economist collects data on the values of the minimum wage and the levels of teenage unemployment over time. The economist concludes that a 1% increase in the minimum wage causes a 0.2% increase in teenage unemployment. From this information he concludes that the minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers. 4) Refer to Scenario 1. The statement,ʺthe minimum wage is harmful to teenagers and should be reduced or eliminated to increase employment among teenagers,ʺis most likely an example of ________ economics. A) microeconomic B) normative C) positive D) descriptive 5) Refer to Scenario 1. The process of collecting data on minimum wage and teenage unemployment levels is an example of A) descriptive economics. B) law and economics. C) economic history. D) econometrics. 6) There is a possibility that a national sales tax will be implemented. Many economists argue that items such as food and clothing should be exempt from such a tax because low-income people spend a greater percentage of their income on these goods than high-income individuals. This argument is motivated by concerns over A) efficiency. B) equity. C) economic growth. D) economic stability.
Refer to the information provided in Figure 1.3 below to answer the questions that follow.
Figure 1.3 7) Refer to Figure 1.3. The slope of the line between the origin and Point B is A) 5. B) -2. C) 2. D) 0.5. 8) The slope of a vertical line is A) zero. C) infinite.
B) continually changing. D) negative.
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Refer to the information provided in Figure 1.5 below to answer the questions that follow.
Figure 1.5 9) Refer to Figure 1.5. Which of the curves has a slope that is negative and increasing? A) A B) B C) C D) D CHAPTER 2 Refer to the information provided in Table 2.1 below to answer the following questions. Table 2.1
10) Refer to Table 2.1. Andrew's opportunity cost of designing one Web site is A) 1/4 of a brochure. B) 2 brochures. C) 4 brochures. D) 8 brochures. 11) Refer to Table 2.1. ________ has a comparative advantage in ________ brochures. A) Matthew; both Web site design and in B) Andrew; both Web site design and in C) Andrew; Web site design and Matthew has a comparative advantage in D) Matthew; Web site design and Andrew has a comparative advantage in 12) Because resources are scarce, the opportunity cost of investment in capital is A) zero. B) forgone future consumption. C) infinite. D) forgone present consumption.
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Refer to the information provided in Figure 2.4 below to answer the questions that follow.
Figure 2.4 13) According to Figure 2.4, which point cannot be obtained with the current resources and state of technology? A) A B) B C) C D) F 14) According to Figure 2.4, as the economy moves from Point D to Point A, the opportunity cost of additional trucks, measured in terms of cars foregone, A) decreases. B) remains constant. C) increases. D) initially increases, then decreases.
Refer to the information provided in Figure 2.5 below to answer the questions that follow.
Figure 2.5 15) Refer to Figure 2.5. For this economy to move from Point B to Point C so that an additional 10 laptop computers could be produced, production of desktop computers would have to be reduced by A) fewer than 20. B) exactly 20. C) more than 20. D) exactly 40.
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16) Refer to Figure 2.5. The best point for society would be A) at any of the labeled points, as all of the points represent an efficient allocation of resources. B) either Point B or Point C, as the total amount being produced at either of these points is approximately the same. C) Point C, as at this point there are approximately equal amounts of desktop and laptop computers being produced. D) indeterminate from this information, as we donʹt have any information about the societyʹs desires.
17) In terms of the production possibility frontier, an increase in productivity attributable to new technology would best be shown by a A) movement from a point inside the frontier to a point on it. B) movement along the frontier. C) shift of the production possibility frontier outward, away from the origin. D) movement toward the origin. 18) Consider two countries, Germany and Sweden. Germany devotes a larger portion of its production to capital. Which of the following statements is most likely true? A) Germanyʹs production possibility frontier will shift up and out farther and faster than Swedenʹs. B) Germany is a poorer country than Sweden. C) Germany will move up its production possibility curve faster than Sweden. D) Sweden is producing inside its production possibility frontier, whereas Germany is producing at a point on its production possibility frontier. CHAPTER 3 19) Which of the following explains the law of demand? A) A normal versus inferior good effect B) A tastes and preferences effect C) The law of diminishing marginal utility D) The law of output increasing at a decreasing rate 20) During an economic downturn when consumer income falls, the demand for ice cream cones increases and the demand for chocolate cheesecake decreases. This implies ice cream cones A) are an inferior good and chocolate cheesecake is a normal good. B) and chocolate cheesecake are complements. C) are an economic bad and chocolate cheesecake is an economic good. D) are a normal good and chocolate cheesecake is an inferior good.
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Refer to the information provided in Figure 3.7 below to answer the following questions.
Figure 3.7 21) Refer to Figure 3.7. If pizza and beer are complementary goods, a decrease in the price of beer will cause a movement from Point B on demand curve D2 to A) demand curve D1. B) Point C on demand curve D2. C) Point A on demand curve D2. D) demand curve D3. 22) Refer to Figure 3.7. A(n) ________ will cause a movement from Point C to Point B on demand curve D2. A) decrease in the price of hamburgers, assuming that pizza and hamburgers are substitutes B) decrease in the price of pizza C) decrease in income, assuming pizza is a normal good D) increase in the price of pizza
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 23) If cameras and films are complements, then a decrease in the price of cameras will result in a decrease in the demand for film.
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 24) A frozen food manufacturer can produce either pizzas or calzones. As the result of a rise in the price of calzones, the firm produces more calzones and fewer pizzas. An economist would explain this by saying A) there has been an increase in the quantity supplied of calzones and a decrease in the supply of pizza. B) the supply of calzones increased and the quantity supplied of pizza decreased. C) the supply of calzones increased and the supply of pizzas decreased. D) there has been an increase in the quantity supplied of calzones and a decrease in the quantity supplied of pizzas.
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Refer to the information provided in Figure 3.11 below to answer the following questions.
Figure 3.11 25) Refer to Figure 3.11. An increase in the price of pizza sauce will cause a movement from Point B on supply curve S2 to A) supply curve S3. B) Point C on supply curve S2. C) Point A on supply curve S2. D) supply curve S1.
Refer to the information provided in Table 3.1 below to answer the questions that follow. Table 3.1
26) Refer to Table 3.1. If the price per pizza is $10, the price will A) fall because there is an excess supply in the market. B) fall because there is an excess demand in the market. C) remain constant because the market is in equilibrium. D) rise because there is an excess demand in the market.
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Refer to the information provided in Table 3.2 below to answer the questions that follow. Table 3.2
27) Refer to Table 3.2. In this market there will be an excess demand of 150 gardenburgers at a price of A) $6. B) $8. C) $10. D) $12. 28) Improvements in technology have reduced the cost of producing personal computers. As a result, you accurately predict that in the market for personal computers, there will be a(n) A) increase in the quantity supplied of personal computers, a reduction in the price, and an increase in the quantity demanded. B) decrease in the supply of personal computers, an increase in the price, and a decrease in the demand. C) increase in the supply of personal computers, a decrease in the price, and an increase in the quantity demanded. D) increase in the supply of personal computers, a reduction in the price, and an increase in the demand. 29) A(n) ________ in equilibrium ________ will occur when there is an increase in the supply of and decrease in demand for cassette tapes. A) increase; quantity B) increase; price C) decrease; price D) decrease; quantity 30) Apples and oranges are substitute goods. A freeze in Florida destroyed a good portion of the orange crop. Ceteris paribus, the price of A) both apples and oranges will fall. B) oranges will rise and the price of apples will fall. C) oranges will fall and the price of apples will rise. D) both apples and oranges will rise.
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