Answer the following questions:

Question 1: Peanut butter and Nutella are substitutes for consumers. If the price of peanut butter increases, what happens in the Nutella market?

A. Demand decreases. Equilibrium price decreases. Equilibrium quantity increases. Supply stays the same.

B. Demand increases. Equilibrium price decreases. Equilibrium quantity decreases. Supply increases.

C. Supply increases. Demand stays the same. Equilibrium price decreases. Equilibrium quantity increases

D. None of the above

Question 2: The income level of Finalprep Town decreased last year. What happened in the market for ramen noodles (an inferior good)?

A. Demand decreased. Equilibrium price decreased. Equilibrium quantity decreased. Supply stayed the same.

B. Demand increased. Equilibrium price increased. Equilibrium quantity increased. Supply stayed the same.

C. Supply increased. Equilibrium price increased. Equilibrium quantity decreased. Demand stayed the same

D. None of the above

Question 3: Long-run competitive equilibrium occurs when....

A. P=SRMC=SRAC=LRAC

B. P>SRMC>SRAC>LRAC

C. P

D. P=SRMC>SRAC>LRAC

Question 4: Which of the following is an example of a common good?

A. A large tropical forest

B. A stock of fish in a lake

C. A t-shirt

D. Satellite T.V.

E. The first two options only

F. All of the above

Question 5: Which of the following describes the factor substitution effect?

A. The wage rate for automobile workers doubled so Econocars decided to purchase a car-building robot

B. A firm decreased its output so it decreased its demand for capital and labor

C. The productivity of labor doubled so EconoConsultants increased their output

D. The second and third options only

E. None of the above

Question 6: If a firm is exhibiting increasing returns to scale....

A. If the firm doubles all inputs, outputs less than double

B. If the firm doubles all inputs, outputs exactly double

C. If the firm doubles all inputs, outputs more than double

D. If the firm doubles all inputs, it shuts down in the short run

Question 7: ______________is the cost to the firm of producing one additional unit.

A. marginal private cost

B. externality tax

C. marginal social cost

D. marginal damage costs

Question 8: Purchasing a new pizza delivery car that allows workers in a pizza place that were once idle in the restaurant to make deliveries demonstrates how capital and labor can be....

A. Substitutable inputs

B. Complementary inputs

C. exhibiting decreasing returns

D. All of the above

Question 9: For a perfectly competitive firm, the ____________ is the lowest point on the average variable cost curve.

A. shutdown point

B. operating profit minimizing point

C. profit-maximizing point

D. none of the above

Question 10: The demand for resources that is dependent on the demand for the outputs those resources can be used to produce is called...

A. derived demand

B. productivity

C. complementary inputs

D. None of the above

Question 11: Which of the following is an example of a positive externality?

A. The scent from a candle wafting into a neighboring apartment

B. Pollution from a factory

C. Utility you receive from consuming the hamburger you purchased

D. none of the above

Question 12: Which of the following is NOT a public good?

A. National defense

B. A community park

C. Legal system

D. A movie at a movie theater

E. all of the above are examples of public goods

51m M p2 D1 0 Q2 . . Quality The graph above represents the market for pizza. Use the graph above to answer the following question. Price $2 P2 P1 Demand Q2 Q1 Quantity The graph above represents the market for orange juice. Use the graph above to answer the following question.Steak Quantity of steaks Total Utility Marginal Utility Price MU/S 20 $10 30 $10 34 $10 QUIAWN 36 $10 34 $10 30 $10 Hot dogs Quantity of hot dogs Total Utility Marginal Utility Price MU/S 10 $6 14 $6 16 $6 QUAWNE 14 $6 10 $6 2 $6Labor units Total Product Marginal Average Price (value Marginal (gizmos per product of product of added per revenue hour) labor labor gizmo) product 0 30 AWN -O 70 100 20 5 130