1)From the article: "This time last year, shoppers were panic buying... essentials such as... hand sanitizer... companies... initially struggled to meet demand. Today, Americans...are buying less at the grocery store overall.... In the U.S.... sales [in March of 2021] were down 16%." Which of the following best explains the change in the market for hand sanitizer from March of 2020 to March of 2021?

• A - Hand sanitizer was scarce in March of 2020. Hand sanitizer was no longer scarce in March of 2021.
• B - The demand for hand sanitizer increased in March of 2020. The supply of hand sanitizer decreased from March 2020 to March 2021.
• C - The demand for hand sanitizer increased in March of 2020 when the supply of hand sanitizer was perfectly elastic. From March 2020 to March 2021 the demand for hand sanitizer decreased while the supply became inelastic.
• D - The demand for hand sanitizer increased in March of 2020 and decreased between March 2020 and 2021 while the supply became more elastic.
• E - The demand for hand sanitizer was greater than the supply of hand sanitizer in March 2020. The supply of hand sanitizer was greater than the demand for hand sanitizer in March 2021.

2)A consumer will make an optimal decision when she continues an activity up to the point where the marginal benefit of the activity is equal to the marginal cost.

• A - True
• B - False

3)A monopoly firm will maximize profit when the price it charges for its output is equal to its marginal cost.

• A - True
• B - False

4)The law of demand states that, other things remaining equal, as the price of a product increases demand for the product decreases and as the price of the product decreases demand for the product increases.

• A - True
• B - False

5)If the price elasticity of demand for a product equals -2.0, a decrease in price, other things remaining equal, will result in an increase in revenue from sales of the product.

• A - True
• B - False

6)The elasticity of supply for a product is equal to zero when supply is perfectly elastic.

• A - True
• B - False

7)The article explained that 84 percent of Amazon workers in Bessemer, Alabama voted against becoming members of the Retail, Wholesale and Department Store Union. The other workers who voted to join the union:

• A - did not accurately measure the benefits and costs of union membership.
• B - voted irrationally.
• C - believed that the benefits of union membership would exceed the costs.
• D - were paid less than $15 an hour.
• E - supported Senator Bernie Sanders during his campaigns to become president of the United States.

8)Mike Trout is a star outfielder for the Los Angeles Angels baseball team. In August 2020, a 2009 Mike Trout baseball card sold for $3.93 million, the highest price ever paid for any baseball card. Which of the following is true regarding this purchase?

• A - The person who purchased the card was irrational for paying such a high price.
• B - The person who purchased the card did not receive any consumer surplus when the card was purchased.
• C - The price paid for the card was an anchor price.
• D - The person who purchased the card received some consumer surplus from the transaction if he or she was willing to pay more than $3.93 million for the card.
• E - The ceiling price for the card was $3.93 million.

9)Economists refer to the demand for a factor of production, such as lithium used in the production of smartphones, that is dependent on the demand for the product the factor produces as:

• A - an indirect demand.
• B - a disguised demand.
• C - an external demand.
• D - an opaque demand.
• E - a derived demand.

10)Which of the following describes how the elasticity of supply for many products changes?

• A - Along a supply curve, elasticity is low at high prices and high at low prices. At the mid-point of the supply curve elasticity is unit-elastic.
• B - Supply for many products is inelastic when elasticity is measured over a short time period and becomes more elastic the longer the time period over which the elasticity of supply is measured.
• C - The elasticity of supply increases when there is an increase in demand and decreases when there is a decrease in demand.
• D - Supply is inelastic for normal goods and is elastic for inferior goods.
• E - Supply is relatively elastic when the market price for a product is above the equilibrium price and is relatively inelastic when the price for a product is below the equilibrium price.