Microeconomics Quiz #1 - Version 2 PDF

Name: ____________________________ Period: __________ Microeconomics Quiz #1- Version 2 ________ 1. Which is an example of a capital resource? a. An abundance of coal b. A teacher’s expertise...

Name: ____________________________ Period: __________ Microeconomics Quiz #1- Version 2 ________ 1. Which is an example of a capital resource? a. An abundance of coal b. A teacher’s expertise c. Seasonal workers d. Christmas trees ________ 2. Assume that an economy produces cotton T-shirts and metal stop signs. Which of these would cause the production possibilities curve for this economy to shift to the left? a. An increase in the cost of cotton used to produce T-shirts. b. A decrease in the demand for metal stop signs. c. Technological advancements in the production of cotton T-shirts. d. A decrease in the price of metal used to make stop signs. ________ 4. Adam Smith believed in the concept of ___________, becoming an expert at a specific trade or skill. a. an interconnected economy b. specialization c. socialism d. a command economy ________ 5. Which of the following statements most likely lies within the realm of microeconomics? a. The impact of government policies on national unemployment rates. b. The effect of minimum wage laws on income inequality. c. The study of consumer behavior in a specific market. d. The analysis of international trade agreements on GDP growth. ________ 7. In a market-oriented economy, the price of a good or service is decided by the interaction of: a. Government regulations and central planning. b. Supply and demand forces in the market. c. Labor unions and collective bargaining agreements. d. International trade agreements and tariffs. Name: ____________________________ Period: __________ ________9. Which of the following best characterizes the circular flow of income? a. The flow of money between households and firms in an economy. b. The movement of goods and services between producers and consumers. c. The exchange of resources between different sectors of the economy. d. The redistribution of wealth through taxation and government spending. ________10. In marginal analysis, what does the term "marginal cost" refer to? a. The total cost incurred for producing one additional unit of a good or service. b. The average cost of producing all units of a good or service. c. The fixed cost of production that does not change with output levels. d. The cost of inputs required to start a new production process. ________11. When looking at a production possibilities curve, it is necessary to give up some of one good to gain more of the other good. a. Sometimes true b. Sometimes false c. True d. False Refer to the graph below for questions 13 and 14 ________13. Using the graph to the right, what is the opportunity cost of moving production from Point B to Point E? a. 3 Leather Jackets b. 2 Leather Jackets c. 4 Leather Pants d. 6 Leather Pants ________ 14. Using the same graph, which of the following statements is NOT true: a. Producing 3 leather pants and 2 leather jackets would be inefficient. b. Producing 8 leather pants and 8 leather jackets is not possible with the current amount of resources. c. Point D represents market equilibrium d. Points C and G on the graph are efficient. Name: ____________________________ Period: __________ ________ 15. The opportunity cost of buying a $12 lunch is best described as: a. The enjoyment gained from eating the lunch. b. The $12 spent on the lunch. c. The value of the next best alternative foregone, such as purchasing a $10 sandwich. d. The time spent waiting in line to purchase the lunch. Refer to the following table for question 17 Possibility A Economics History I 94 76 II 87 84 III 77 91 ________ 17. A student has only a few hours to prepare for two different exams this afternoon. The above table shows alternative possible exam scores with three alternative uses of the student's time. The opportunity cost of scoring a 94 on the economics exam rather than a 77 is: a. 8 points on the history exam b. 15 points on the history exam. c. 14 points on the history exam. d. 17 points on the history exam. _________18. With one hour of labor, Puerto Rico can produce 10 units of wine and 5 units of cloth, and France can produce 20 units of wine and 20 units of cloth. Based on that, which of the following is true? a. Puerto Rico has the absolute advantage in wine production and France has the absolute advantage in cloth production b. Puerto Rico has the absolute advantage in both wine and cloth production c. France has the absolute advantage in both wine and cloth production, and Puerto Rico has the comparative advantage in wine production. d. France has the comparative advantage in both wine and cloth production. Name: ____________________________ Period: __________ ________19. In the guns and butter PPF on the right, which of the following could be true? a. Because of an influx in the labor force, guns and butter production moves from curve A to curve B b. Curve C represents a decrease in the technology available to produce artillery c. It is not hard for an economy to decide where to allocate resources between guns or butter d. Guns represent consumer goods and butter represents capital goods. _________20. Which of the following is NOT true? a. People choose b. Choices have future consequences c. People respond predictably to incentives d. The option with the least marginal benefit is the choice people will choose. 21. Describe Tragedy of the Commons and provide an example of a real-world occurrence (do NOT use the examples we have used in class).