Micro Exam 1 Questions And Answers

Micro Exam 1 Questions And Answers
.xAxcartelxisx-xCORRECTxxANSWER-axgroupxofxsellersxwhoxagreextoxrestrictxcompetition.
"Axdoublingxinxgasolinexpricesxhasxnotxreducedxpurchasesxatxall."xThexspeakerxevidently
believesxthatxdemandxforxgasolinexisx-xCORRECTxxANSWER-perfectlyxinelastic

"Elasticity"xmeasuresxthexrelationshipxbetweenx-xCORRECTxxANSWER-
.xpricexandxquantity.

108.xOurxeconomicxmodelxwouldxleadxusxtoxpredictxthatxifxmonetaryxaidxperxchildxgivenxto
singlexparentsxincreasesxsubstantiallyx(holdingxeverythingxelsexthexsame),x-
xCORRECTxxANSWER-d.xsinglexpeoplexwillxbexmorexlikelyxtoxhavexchildrenxatxthexmargin.




15.xIfxdemandxisxelastic,xwexwouldxexpectx-xCORRECTxxANSWER-
axbigxchangexinxquantityxwhenxpricexchanges.

154.xThexspreadxofxthexZikaxvirusxhasxmanyxhealthxexpertsxworried,xandxthexFoodxandxDru
gxAdministrationx(FDA)xisxbeingxpressuredxtoxapprovexanti-
Zikaxremediesx(likexthexreleasexofxgeneticallyxmodifiedxmosquitoes)xwithoutxdoingxfull-
scalextesting.xThexprincipalxtrade-xoffxfacingxthexFDAxisx-xCORRECTxxANSWER-
thexriskxofxharmxfromxZikaxversusxthexriskxofxharmxfromxthexremedy

165.xWhichxofxthexfollowingxisxconsistentxwithxthexmarginalxprinciplex-
xCORRECTxxANSWER-

Saxonxspendsxanxhourxstudying,xevenxthoughxhexcanxbarelyxkeepxhisxeyesxopenxb.xMileyxs
pendsxanxhourxstudying,xevenxthoughxshexhasxaxtennisxmatchxearly
tomorrow
c.xBobxspendsxanxhourxstudying,xbecausexhexenjoysxstudyingxmorexthanxanythingxelse

173.xMBNxdescribexthex"BigxMacxindex"xasxaxsimplexwayxtoxtakexintoxaccountx-
xCORRECTxxANSWER-differencesxinxpurchasingxpowerxbetweenxcountries




Axdemandxcurvexindicatesxthexvaluexconsumersxgetxfromxaxgood.xItxisxmeasuredxasx-
xCORRECTxxANSWER-thexquantityxpeoplexwillxbuyxatxvariousxprices.




axdemandxcurvexrepresentsx-xCORRECTxxANSWER-
hexwillingnessxtoxpayxofxallxbuyersxinxthexmarket,xthexvaluexeachxbuyerxinxthexmarketxplaces
xonxthexgood,xandxthexhighestxpricexbuyersxarexwillingxtoxpayxforxeachxquantity




Axfirmxhasxmarketxpowerxbecausex-xCORRECTxxANSWER-
substitutesxforxitsxproductxarexnotxperfect.

, Axfirmxmayxgetxmarketxpowerxbyx-xCORRECTxxANSWER-
producingxaxproductxthatxeveryonexlikesxaxlot
b.xproducingxaxproductxforxlessxthanxitsxcompetitors
c.xlobbyingxthexgovernmentxforxspecialxregulation

Axfree-riderxproblemxexistsxwhenx-xCORRECTxxANSWER-
itxisxtooxcostlyxtoxmakexeveryonexwhoxenjoysxaxgoodxpayxforxit.

Axfrost
thatxdestroysxhalfxofxFlorida'sxorangexcropxwillxmakexorangexgrowersxunhappyxonlyxifx-
xCORRECTxxANSWER-demandxforxorangesxisxelastic




Axpoliticalxeconomyxexplanationxforxwhyxnaturalxgasxcompaniesxgetxtaxxbreaksxisx-
xCORRECTxxANSWER-

gasxcompaniesxcarexaxlotxaboutxthextaxxbreaks,xandxmostxvotersxaren'txawarexof
them.

Axrationalxdecision-makerxtakesxactionxonlyxifx-xCORRECTxxANSWER-
thexmarginalxbenefitxisxgreaterxthanxthexmarginalxcost.

Axsupplyxcurvexshowsx-xCORRECTxxANSWER-
thexrelationshipxbetweenxpricexandxquantityxsupplied.
b.xhowxmanyxunitsxofxthexgoodxwillxbexsuppliedxatxvariousxprices.
c.xthexcostxofxsupplyingxthexgood.

Axtaxxonxbuyersx-xCORRECTxxANSWER-
decreasesxbothxthexquantityxdemandedxandxquantityxsupplied,xunlessxonexor
thexotherxisxperfectlyxinelastic.

Axtaxxonxcigarettexproductionx-xCORRECTxxANSWER-
willxreducexcigarettexconsumptionxmorexifxdemandxisxelasticxthanxifxdemandxisinelastic

Accordingxtoxeconomicxmodelsxofxpolicymaking,xreelection-
seekingxpoliticiansxwillxfindxwhichxofxthexfollowingxattractive?x-xCORRECTxxANSWER-
Axtaxxbreakxforxorganicxmossxgrowers
b.xThexdeclarationxofxaxpublicxholidayxtoxcelebratexourxbravexsoldiers

AccordingxtoxMBN,xwhenxU.S.xjobsxarex"protected"xthroughxthexusexofxtradexbarriers,x-
xCORRECTxxANSWER-

a.xthexcostsxtoxconsumersxexceedsxthexbenefitsxtoxprotectedxworkers

AccordingxtoxMiller,xBenjaminxandxNorthx(andxmanyxeconomists),xthexprimaryxfactorxexplai
ningxwhyxsomexcountriesxarexrichxandxsomexarexpoorxisx-xCORRECTxxANSWER-
thexqualityxofxinstitutionsxsuchxasxlegalxsystems