All questions are included with the pictures attached to the question.

00W} COW} UOW> UOW> UOW> UOW> 1 If the price of automobiles were to decrease substantially, the demand curve for public transportation would most likely shift rightward. shift leftward. remain unchanged. remain unchanged while quantity demanded would change. 2 A downward sloping demand curve indicates that individuals all have the same valuation of the same product. individuals have different valuations of the same product. individuals have no valuations of a particular product. certain individuals are uninformed about certain aspects of the product. 3 An increase in the price of pork will lead to a movement up along the demand curve. a movement down along the demand curve. a rightward shift of the demand curve. a leftward shift of the demand curve. 4 The gure to the right shows a graph of the market for pizzas in a large town. If the price falls from $10 to $7 per pizza, the quantity of pizzas demanded will increase by 20. decrease by 30. increase by 30. decrease by 10. 5 Suppose the demand curve for a good shifts rightward, causing the equilibrium price to increase. This increase in the price of the good results in a rightward shift of the supply curve. an increase in quantity supplied. a leftward shift of the supply curve. a downward movement along the supply curve. 6 Equilibrium is defined as a situation in which neither buyers nor sellers want to change their behavior. no government regulations exist. demand curves are perfectly horizontal. suppliers will supply any amount that buyers wish to buy. Figure l U055} 0055} 5055} 0055} 5055} 5055?? 14 Ramen noodles are likely considered a normal good an inferior good. to have inelastic demand. to have perfectly elastic demand. 15 If a consumer prefers apples to bananas and prefers bananas to citrus fruit, in order to satisfy assumptions about preferences she has to prefer bananas to apples. citrus fruit to bananas apples to citrus fruit. citrus fruit to apples. 16 Convexity of indifference curves implies that consumers are willing to give up more "y" to get an extra "X" the more "X" they have. give up more "y" to get an extra "X" the less "X" they have. settle for less of both "X" and "y." I! ll ll ll acquire more X only if they do not have to give up any y. 17 Joe's income is $500, the price of food (F , y-axis) is $2 per unit, and the price of shelter (S, X-axis) is $100. Which of the following represents his budget constraint? 500 = 2F + 1008 F = 250 - SOS S = 5 - .02F All of the above. 18 The rate at which a consumer must give up y to get one more X is equal to -PX/Py. -Py/PX. -MUXMUy. lvay/MUX. 19 Lisa eats both pizzas and burritos. If the price of a pizza increases, Lisa's opportunity set becomes larger. becomes smaller. is unchanged. cannot be determined without more information. 20 By selecting a bundle where MRS = MRT, the consumer is achieving a corner solution. reaching the highest possible indifference curve she can afford. not behaving in an optimal way. All of the above. Figure 3 21 The figure to the right shows Bobby's indifference map for juice and snacks. Also shown are three budget lines resulting Juice from different prices for snacks. As the price of snacks rises, Bobby's utility stays the same. increases. 20 decreases. D might change, but there is not enough information to determine. 15 22 An increase in the price of a good causes An increase in the price of a good causes an increase in the consumption of that good. a rightward shift of the demand curve for that good. D 57 10 20 a parallel rightward shift of the budget line. Snacks 23 Which of the following is least likely to be considered a capital input? a sewing machine a tractor a telephone a ten dollar bill 24 A factor of production that can be easily changed in the relevant time period is called a A fixed input temporary input. variable input. D substitution input. 25 The Marginal Product of Labor is A the change in total product resulting from an extra unit of labor, holding other factors constant. B the ratio of output to the number of workers used to produce that output. C the amount of output that can be produced by a given amount of labor. equal to the marginal product of labor when the average product is increasing.COW} COW} 0003} 501351} 25 The Marginal Product of Labor is the change in total product resulting from an extra unit of labor, holding other factors constant. the ratio of output to the number of workers used to produce that output. the amount of output that can be produced by a given amount of labor. equal to the marginal product of labor when the average product is increasing. 26 The Average Product of Labor is the change in total product resulting from an extra unit of labor, holding other factors constant. the ratio of output to the number of workers used to produce that output. the amount of output that can be produced by a given amount of labor. equal to the marginal product of labor when the average product is increasing. 27 The table to the right shows the short-run production function for Albert's Pretzels. The law of diminishing marginal product Labor Output appears with the second worker. I 10 has not yet appeared for any of the levels of labor. 2 18 first appears with the fth worker. 3 24 is refuted by this evidence. 4 28 5 30 28 An isoquant represents levels of capital and labor that have constant marginal productivity. yield the same level of output. incur the same total cost. All of the above. 29 The marginal rate of technical substitution always equals the slope of the total product curve. minus the ratio of the marginal products of inputs. the change in output due to a change in the amount of one input. the distance between two isoquants. 30 If a firm doubles inputs and produces three times the output, then there are constant returns to scale. diminishing marginal product. decreasing returns to scale. increasing returns to scale. 7 The figure to the right shows a graph of the market for pizzas in a large town. What are the equilibrium price and quantity? A p = 8, Q= 60 14 B P = 7, Q=40 C p = 7, Q=70 D p = 10, Q = 40 10 S 8 If pizza and tacos are substitutes, a decrease in the price of tacos would lead to a decrease in the demand curve for pizza. decrease in the quantity demanded of pizza. D decrease in the price of pizza. All of the above. 40 60 70 140 Q 9 The elasticity of demand is measured in money (e.g., dollars). measured in units of the good (e.g., slices of pizza). unitless. D measured in money/unit (e.g., 1.50 $/slice of pizza). 10 If the price of orange juice rises 10%, and as a result the quantity demanded falls by 8%, the price elasticity of demand for orange juice is -1.25 -80 -0.8 .10 11 If the price elasticity of demand for a good is greater than one in absolute value, economists characterize that demand is elastic inelastic perfect vertical. 12 A normal good has a income elasticity of demand and quantity demanded as income rises. negative; increases negative; decreases positive; increases D positive; decreases