Sophia Microeconomics Unit 1 Milestone Study Questions With Correct Answers

Sophia Microeconomics Unit 1 Milestone Study Questions With Correct Answers What is the study of the behavior of consumers and businesses holistically across an economy? - CORRECT ANSWER Macroeconomics When Joe went back to college to finish his degree in Economics, he cut back from full-time to part-time work at his firm. During this time, the lease on his SUV ran out and he leased a smaller compact car as a result. The smaller compact car is an example of which type of good? - CORRECT ANSWER Inferior Which answer choice below does NOT influence decision making for the rational consumer? - CORRECT ANSWER Profit maximization During the Great Recession, many investors purchased gold and other precious metals, thinking they would be reliable forms of investment. If we looked at this phenomenon on a graph, we would see which of the following? - CORRECT ANSWER Shift in demand Identify which statement is a characteristic of long-run for a firm. - CORRECT ANSWER Time period when constraints are most likely to be variable Which choice below is NOT an example of an intermediate good? - CORRECT ANSWER Orange juice sold at a grocery store A store devotes more space to bicycles so it now has less space for books. This is an example of what decision-making relationship for the rational firm? - CORRECT ANSWER Opportunity cost A firm that produces and distributes baked goods decides to produce more units of their frozen ice cream cakes once they experience an increase in demand for the cakes. Assuming it is a rational firm, choose the statement from below that is true. - CORRECT ANSWER As long as the marginal revenue exceeds the marginal cost, the firm will continue to produce the cakes. Which of the following is not considered a factor of production? - CORRECT ANSWER Interest earned on an investment Which answer choice below is NOT an example of microeconomics? - CORRECT ANSWER A study of whether or not the trade embargo against Iran has been successful Which of the following accurately describes market equilibrium? - CORRECT ANSWER It is when the price is such that the quantity supplied of a good or service is equal to the quantity demanded. Movement along the supply curve is most likely caused by which of the following? - CORRECT ANSWER Changes in market price Which of the following is NOT an example of the labor-leisure tradeoff? - CORRECT ANSWER A firm decides to layoff workers in order to meet budget. Leah has two options this Friday evening. She can either babysit for her professor's kids and earn $50 for the evening, or she can join some friends for dinner and a movie. The movie will cost $25 for ticket and concessions and dinner usually runs around $20. Her roommate has a coupon for 50% off dinner at their favorite restaurant and is trying to convince Leah to come with them rather than babysitting. Which of the following is Leah's opportunity cost if she decides to go with her friends? - CORRECT ANSWER The $50 she would earn from babysitting Determine which definition below corresponds with ceteris paribus? - CORRECT ANSWER A phrase that means considering one factor and assuming all others are the same. Which one of the following examples would cause a movement along the demand curve? - CORRECT ANSWER The price of a product decreases, therefore the quantity demanded increases. Which scenario below is an example of consumer surplus? - CORRECT ANSWER George is willing to pay up to $20,000 for a car, but he finds one he likes for $15,000. Tania really enjoyed the salads sold at her local grocery store, so she purchased five of them to eat throughout the week. The first salad is delicious, and Tania eats it quickly, looking forward to the next one. The second day, the next salad is also good. By the third day, some of the ingredients in the next salad are starting to go bad, and by the fourth day, Tania cannot bring herself to eat any more and throws away the remaining salads. Which statement would be unlikely in economic terms? - CORRECT ANSWER Tania achieved utility maximization with her purchase of five salads