43 Refer to the Figure. If this society moves from point R to point U Sweaters out a 200 180 1606 140 120 100 80 60 40 20 0 20 40 60 80 100 120 140 160 180 Apples O a. it gives up 160 sweaters to get 140 bushels of apples. O b. it gives up 80 sweaters to get 60 bushels of apples. O c. it gives up 60 bushels of apples to get 80 sweaters. O d. it gives up 20 bushels of apples to get 60 sweaters. 44 Refer to the Figure. The price that buyers pay after the tax is imposed is Price out c 18 14 11 20 26 Quantity O a. $18. O b. the same price that they paid before the tax was imposed. O c. $11. O d. $14.1 41 Refer to the Figure. At the equilibrium price, total surplus is ered s out of Price 14 Supply Demand 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 Quantity O a. $333. O b. $280. O c. $560. O d. $70. 47 Refer to the Figure. Consider the production possibilities frontier for an economy that produces only sofas and cars. The opportunity cost of each sofa is Sofas s out a 1000 900 700 600 500 400 300 200 100 100 200 300 400 500 600 700 800 900 Cars O a. 600 cars. O b. not constant O c. 2/3 of a car. J d. 3/2 cars.39 Refer to the Figure. A government-imposed price of $12 in this market is an example of a Price out of Supply 36 32 28 24 20 16 12 Demand 8 12 16 20 24 28 32 36 40 Quantity O a. binding price ceiling that creates a shortage. O b. non-binding price ceiling that creates a shortage. O c. non-binding price floor that creates a surplus. O d. binding price floor that creates a surplus. 40 Refer to the Figure. At a price of Price S out of 18 16 14 12 10 8 6 10 20 30 40 50 60 70 80 90 100 Quantity O a. $8, there is a surplus of 20 units. O b. $8, there is a shortage of 10 units. O c. $10, there is neither a shortage nor a surplus. O d. $12, there is a surplus of 10 units.35 Kurt decides to spend 2 hours working rather than hanging out with his friends. He earns $10 per hour for work. His opportunity cost of working is a. nothing as he has given nothing up to work the extra hours. out of O b. the utility or enjoyment he would have gotten from hanging out with his friends. O c. $20 minus the value of the time spent with friends. O d. the $20 he earned working the extra two hours. 36 Luke and Carol are two toymakers who both produce trains and cars. In one month, Luke can produce 5 trains or 20 cars, whereas Carol can produce 8 trains or 24 cars. Given this, we know that O a. Luke has an absolute advantage in trains. out of O b. Carol has an absolute advantage in cars. O c. Carol has a comparative advantage in cars. O d. Luke has a comparative advantage in trains. 37 Matt purchases 4 boxes of spinach and 3 pounds of tomatoes per month when the price of spinach is $1.50 per pound. He purchases 5 boxes of spinach and 5 pounds of tomatoes per month when the price of spinach is $1.00 per pound. Using the midpoint method, Matt's cross-price elasticity of demand for spinach and tomatoes is O a. 0.80, and they are substitutes. out of O b. 1.25, and they are substitutes. O c. -1.25, and they are complements. O d. -0.80, and they are complements. 38 Refer to the Figure . Alan's opportunity cost of one muffin is Diana's Production Possibilities Frontier out of muffins 900 590 450 450 450 350 390 250 200 790 150 250 58 160 150 700 250 900 150 600 scones O a. 4/3 scones; 2 scones O b. 3/4 scone; 1/2 scone O c. 4/3 scones; 1/2 scone and Diana's opportunity cost of one muffin is O d. 3/4 scone; 2 scones30 Holding all other factors constant and using the midpoint method, if a manufacturer increases production from 600 to 750 units when price increases by 15 percent, then supply is Dt yet awered O a. elastic, since the price elasticity of supply is equal to 0.68. Pints out of O b. inelastic, since the price elasticity of supply is equal to 1.48. D c. inelastic, since the price elasticity of supply is equal to 0.68. westar O d. elastic, since the price elasticity of supply is equal to 1.48. 31 If a drought affects the harvest of coffee beans (the quantity produced decreases) and if tes are substitutes, what changes occur in the markets for coffee and tea? Dt yet wered O a. The price of coffee rises and the quantity of coffee falls; both the price and quantity of tea rise. hints out of O b. The price of coffee falls and the quantity of coffee rises, both the price and quantity of tea fall. O c. Both the price and quantity of coffee rise: the price of tes falls and the quantity of tea rises. lesbian O d. Both the price and quantity of coffee fall; the price of tea rises and the quantity of tea falls. 32 If Imelda sells a pair of shoes for $85, and her producer surplus from the sale is $41, her cost must have been iwered O a. $126. pints out of LO O b. $41. Flag D c. We would have to know the consumer surplus in order to make this determination. westian O d. $44. netion 33 If the government levies a $10 tax per designer handbag, then the price paid by buyers of designer handbags would Dt yet iwered O a. increase by less than $10. Ints out of .00 Flacy O b. increase by more than $10. lesbian O c. increase by exactly $10. O d. decrease by an indeterminate amount. resticin 34 In the circular-flow diagram, which of the following is NOT a factor of production? O a. capital pints out of O b. labor O c. revenue estian O d. land25 A tax on the sellers of chocolate it yet wereo O a. may increase, decrease, or have no effect on the amount of chocolate that will be bought and sold. nts out of O b. increases the amount of chocolate that will be bought and sold. Flag O c. decreases the amount of chocolate that will be bought and sold. istian O d. has no effect on the amount of chocolate that will be bought and sold. zicin: 26 According to the circular-flow diagram, if Molly is an employee who delivers packages for Deliver Dynomite, she participates in the markets for I yet swere O a. factors of production exchanging labor for income nts out of O b. goods and services exchanging labor for income Flag O c. factors of production exchanging packages for revenue estian O d. goods and services exchanging packages for wages, rent, and profit sticin 27 An increase in quantity demanded is different from shifting the demand curve to the right because an increase in quantity demanded it yet WereD a. is caused by a change in a nonprice determinant of demand while a shift to the right is caused by a price decrease. ints out of O b. is caused by a change in a nonprice determinant of demand while a shift to the right is caused by a price increase. O c. is caused by a price decrease while a shift to the right is caused by a change in a nonprice determinant of demand. estian O d. is caused by a price increase while a shift to the right is caused by a change in a nonprice determinant of demand. stian 28 At a price of $3.50 per loaf, a bakery is willing to supply 450 loaves of bread per week. At a price of $4.00 per loaf, the bakery is willing to supply 550 loaves per week. Using the midpoint method, the price elasticity of supply is about it yet swere O a. 2.00. ints out of O b. 0.67. O c. 1.50 estian O d. 0.50. 29 China and Japan both produce clothing and computers. China is said to have the comparative advantage in producing clothing if it yet Wereo O a. the opportunity cost of producing clothing is lower for China than it is for Japan ms out of O b. the opportunity cost of producing clothing is lower for Japan than it is for China. D c. Japan has an absolute advantage over China in producing computers. istian O d. China requires fewer resources than Japan to produce clothing