ECON 1002 FINAL EXAM – MGMT 3503 MICROECONOMICS WITH ANSWERS | 2022 LATEST UPDATE

ECON 1002 FINAL EXAM – MGMT 3503 MICROECONOMICS WITH ANSWERS | 2022 LATEST UPDATE ECON 1002 FINAL EXAM – MGMT 3503 MICROECONOMICS WITH ANSWERS Question 1 0 out of 4 points A demand curve: Selected Answer: shows the quantity of a good that buyers will purchase at each price. Correct Answer: all of the above. Question 2 4 out of 4 points The income effect that results from a price change is given by: Selected Answer: the change in quantity demanded of a good that results from the effect of a change in price on a buyer's purchasing power. Correct Answer: the change in quantity demanded of a good that results from the effect of a change in price on a buyer's purchasing power. Question 3 4 out of 4 points The table below shows the quantities demanded and quantities supplied for a good at various prices. The equilibrium price and quantity for the good above respectively equal: Price Qdemanded Qsupplied $0.25 500 200 $0.50 400 400 $0.75 200 600 $1.00 100 800 Selected Answer: $0.50; 400. Correct Answer: $0.50; 400. Question 4 4 out of 4 points When price is below the market equilibrium price: Selected Answer: the quantity demanded will exceed the quantity supplied. Correct Answer: the quantity demanded will exceed the quantity supplied. Question 5 4 out of 4 points The economic surplus to an individual from consuming a good is given by: Selected Answer: the total benefits the individual receives from consuming the good minus the total costs the individual incurs from consuming the good. Correct Answer: the total benefits the individual receives from consuming the good minus the total costs the individual incurs from consuming the good. Question 6 4 out of 4 points A change in "demand" of a good is caused by ______________; a change in "quantity demanded" of a good is caused by ______________: Selected Answer: a change in the price of a substitute; a change in the price of the good. Correct Answer: a change in the price of a substitute; a change in the price of the good. Question 7 4 out of 4 points Based on the diagram below, which of the following best explains the change depicted? Selected Answer: A decrease in the price of a complement. Correct Answer: A decrease in the price of a complement. Question 8 4 out of 4 points A production possibilities curve with a bowed outward shape indicates: Selected Answer: increasing opportunity costs as more and more of one good is produced. Correct Answer: increasing opportunity costs as more and more of one good is produced. Question 9 4 out of 4 points The increased popularity of screw off caps on wine bottles has led to a decrease in the demand for cork. As a result, we can expect that: Selected Answer: The equilibrium quantity and price of cork will both decrease. Correct Answer: The equilibrium quantity and price of cork will both decrease. Question 10 4 out of 4 points If supply shifts in (leftward) and simultaneously demand shifts out (rightward), what can we expect to happen to the equilibrium price and quantity? Selected Answer: Price will definitely increase, quantity may increase, decrease, or stay the same. Correct Answer: Price will definitely increase, quantity may increase, decrease, or stay the same. Question 11 0 out of 4 points Based on the table below, the buyer's and seller's surplus associated with the good shown above respectively equal: Price Buyer's Reservation Price Seller's Reservation Price $2.00 $3.00 $1.50 Selected Answer: $1.50 and $1.50 Correct Answer: $1.00 and $0.50 Question 12 4 out of 4 points If all costs of producing a good are borne directly by sellers, and if all benefits from the good accrue directly to buyers, then: Selected Answer: Both a. and b. Correct Answer: Both a. and b. Question 13 4 out of 4 points The law of demand says that: Selected Answer: people do less of what they want to do as either the implicit or explicit cost of doing it rises. Correct Answer: people do less of what they want to do as either the implicit or explicit cost of doing it rises. Question 14 4 out of 4 points The real price of a good is given by: Selected Answer: the price of a good relative to the average price of all other goods. Correct Answer: the price of a good relative to the average price of all other goods. Question 15 4 out of 4 points Kate can grade 10 exams in an hour or grade 5 papers in an hour. Mike can grade 30 exams or grade 6 papers in an hour. Which of the following statements is true? Selected Answer: Kate has a comparative advantage in grading papers. Correct Answer: Kate has a comparative advantage in grading papers. Question 16 4 out of 4 points Suppose there are 10 individuals in the market, each with the demand curve shown below. Which of the following statements is true about the market demand? Selected Answer: All of the above. Correct Answer: All of the above. Question 17 4 out of 4 points In the market depicted below, the equilibrium price and quantity are indicated by P* and Q* respectively. The area of consumer surplus is best indicated by letter(s): Selected Answer: A + B + C Correct Answer: A + B + C Question 18 4 out of 4 points If demand for a product is elastic with respect to price, this means the: Selected Answer: percentage change in quantity demanded will be greater than the percentage change in price. Correct Answer: percentage change in quantity demanded will be greater than the percentage change in price. Question 19 4 out of 4 points Suppose when the price of tennis balls increases by 5%, the quantity demanded decreases by 4%. The price elasticity of demand for tennis balls equals: Selected Answer: 0.8 Correct Answer: 0.8 Question 20 4 out of 4 points All of the following characteristics influence the price elasticity of demand for a good except: Selected Answer: the safety of the good. Correct Answer: the safety of the good. Question 21 4 out of 4 points Which of the following would shift the production possibilities curve outward? Selected Answer: An improvement in technology. Correct Answer: An improvement in technology. Question 22 4 out of 4 points For a seller facing the demand curve shown below, as price decreases from $10 to $0: Selected Answer: total revenue is initially increasing, then it begins to decrease after it reaches the midpoint. Correct Answer: total revenue is initially increasing, then it begins to decrease after it reaches the midpoint. Question 23 0 out of 4 points Which of the following statements is true regarding decision making? Selected Answer: People should consider average costs and average benefits when making decisions. Correct Answer: None of the above. Question 24 4 out of 4 points A firm knows that the price elasticity of demand for the good they are selling equals 1.5. If they increase the price they charge for their good: Selected Answer: total expenditure would decrease. Correct Answer: total expenditure would decrease. Question 25 4 out of 4 points A perfectly inelastic supply curve is: Selected Answer: vertical, and has a price elasticity of supply equal to zero. Correct Answer: vertical, and has a price elasticity of supply equal to zero.