Question 1 (4 points) I-u (Table: The Production Possibilities for Large Tractors and Petroleum) Use Table: The Production Possibilities for Large Tractors and Petroleum. Both the United States and Venezuela will gain from trade if one tractor trades for barrels of petroleum. Table: The Production Possibilities for Large Tractors and Petroleum swam _ __ O a) 1,000 O b) 4,000 O c) 200 Q d) 5.000 Question 2 (4 points) () Listen (Table: Production Possibilities for Farm Tractors and Motorcycles) Use Table: Production Possibilities for Farm Tractors and Motorcycles. Given the opportunity costs of production: Table: The Production Possibilities for Farm Tractors and Motorcycles Country Farm Tractors Motorcycles United States 80 40 Germany 60 180 O a) Germany should specialize in motorcycles. (b) the United States should specialize in both goods, and Germany should not produce either good. ( c) the United States should specialize in motorcycles. O d) there is no basis for trade.Question 3 (4 points) an (F igure: The Domestic Supply and Demand for Recreational Vehicles (RVs) in the United States) Use Figure: The Domestic Supply and Demand for Recreational Vehicles (RVs) in the United States. Suppose the world price equals $50,000, and there is free trade. The United States would Recreational Vehicles. Price of RVs $60,000 55,000 5 50,000 45,000 42,500 40,000 35,000 30,000 0 25.000 20.000 ##4## 0 31. 6? 910 12 RVs (millions) O 3) import 6 million 0 [3) import 2 million 0 C) export 6 million 0 d) export 2 million Question 4 (4 points) mu If the United States imposes an import quota on Portuguese port, the result in the short run is likely to he prots for American wine producers and prots for Portuguese port producers. O a) lower; lower 0 b) higher; lower 0 C} higher; higher 0 d) lower; higher Question 5 (4 points) emu Assume that the United States imposes an import quota on Brazilian coffee. Relative to the equilibrium world price that would prevail in the absence of import quotas, it is likely that the equilibrium price of coffee in the United States will and the equilibrium price of coffee in Brazil will 3 O a) decrease; remain the same 0 to remain the same; increase 0 C) increase; increase 0 d) increase; decrease Question 6 (4 points) -I:I Advocates of trade barriers suggest that trade restrictions are needed for national security, job creation, and to: O 3, protect new producers until they become more established. 0 b) eliminate government tariff revenues. O '3} allow for government involvement in trade discussions. 0 d} foster the creation of absolute advantage. Question 7 (4 points) emu Adam chooses a combination of pineapples and mangos along his budget line. The marginal rate of substitution of pineapples in place of mangos is 2, the price of pineapples is $0.50, and the price of mangos is $0.50. Adam: 0 a) should consume fewer pineapples and more mangos to maximize total utility. O b) is maximizing total utility. O C} should consume more pineapples and fewer mangos to maximize total utility. 0 d) may or may not be maximizing total utility. Question 8 (4 points) Listen Which statement is TRUE? ( a) A budget constraint limits what a poor consumer can spend, but there is no similar constraint on rich people. ( b) Utility maximization requires seeking the most utility from a given budget. ( c) The slope of the budget constraint depends on how much of each good is consumed. ( d) In consumer choice theory, we assume all goods and services are inferior. Question 9 (4 points) Listen Higher indifference curves represent: ( a) less utility than lower indifference curves. Ob) more utility than lower indifference curves. O c) the same level of utility as lower indifference curves. O d) unknown levels of utility compared to lower indifference curves.Question 10 (4 points) emu (Figure: Budget Lines for Bottled Water and Biscotti) Use Figure: Budget Lines for Bottled Water and Biscotti. For months now, Angela has had $20 per month to spend on boled water and biseotti. The price of each cup of bottled water and each biseotti is $1. Which chart shows what will happen to her budget line if the price of a cup of bottled water falls to $0.50? A I Settled littled m can: 50 50 - 0 I'D - 30 30 - 20 20 10 10 '- : l | 1 J 1 1 1 | O 5 10 15 20 25 30 I] 5 10 15 20 25 30 Elm um t I] W Bottled m lit\" 50 50 ._ 0 0 30 30 20 20 10 10 5 10 15 20 25 30 I] 5 10 15 20 25 30 \fQuestion 11 (4 points) mu Emma sees cream and milk as perfect substitutes. She is always willing to substitute 1 teaspoon of cream for 2 teaspoons of milk. If the price of a pint of cream is halfthat of a pint of milk, Emma will use: 0 a) a lot of milk and a little cream. 0 b) only cream. 0 C) only milk. 0 d) a lot of cream and a little milk. Question 12 (4 points) an Eve has a monthly income of $20 that she can spend on brie (B) and plums (P). The price of a wheel of brie is $5, and the price of a plum is $0.50. The equation for Eve's daily budget constraint can be written: 0 3) 050(3) + 200) s 5. O b) 0.50(3)+ 5(P) s 20. O C) 20(B)+0.50(P)s 5. Q d) 5(3) + 0.50(P) s 20. Question 13 (4 points) Listen (Table: Utility from Tangerines and Passion Fruit) Use Table: Utility from Tangerines and Passion Fruit. Tangerines cost $2 per bushel, and passion fruit costs $5 per bushel. Cameron has $26 to spend. If Cameron buys 4 bushels of passion fruit and 3 bushels of tangerines, how much is his total utility? Table: Utility from Tangerines and Passion Fruit Bushels of Total utility for Bushels of passion Total utility for tangerines tangerines fruit passion fruit 0 0 0 0 1 24 1 70 2 44 130 3 60 3 180 72 4 220 80 250 84 270 84 280 O a) 364 Ob) 180 O c) 280 O d) 72Question 14 (4 points) emu Suppose you are a big fan of Subway sandwiches and that as your income increases. your trips to the local restaurant increase. We can assume that you consider Subway sandwiches a.(n) good. 0 a) \"m\" O to positive O C) negative 0 d} inferior Question 15 (4 points) all A dentist supplies 40 hours of work per week when her fee is $100 per hour but supplies 60 hours of work per week when her fee rises to $120 per hour. Her elasticity of supply. computed using the midpoint method. 151 O a) 0.45. O b) 0.3. O C) 2.2. Q d} 1. Question 16 {4 points) mu Lou's Shirts Direct, a shirt manufacturer. sold 10 dozen shins pet (la),r at $4 per shin but sold 15 dozen shins per day at $3 per shirt. The price elasticity of demand, obtained using the midpoint method, is: O a} yeatetthan 3. O b} greater than zero but less than 1. O '3) equal to l. Q d) greater than 1 but less than 3. Question 17 {4 points) an If your purchases of toothpaste decrease from 11 units per year to 9 units per year when the price of shampoo increases from $8 to $12. all other things equal, for you, toothpaste and shampoo are goods. 0 a} substitute 0 b) 11mm}r O C} complementary O C\" inferior Question 18 (4 points) mu (Table: Price Elasticity in the Market for Matcha Tea) Use Table: Price Elasticity in the Miarket for Matcha Tea. What is the price elasticity of demand. computed using the midpoint method, between $2.50 and 52.25? Table: Price Elasticity in the Market for Match Tea Quantity Demanded - r Week Question 19 {4 points) mu (Figure: The Demand for Winter Gloves) Use Figure: The Demand for Winter Gloves. The price elasticity of demand ovet the segment BC, computed using the midpoint method, is: Price of gloves $60 50 60 30 20 10 0 100 200 300 400 500 600 Quantity (per day) Q a) 3. O b) greater than 3.33. O C) 3.33. Q d) 0.33. Question 20 (4 points) Listen As Massimo ate cheesecake during one recent outing, he found that he enjoyed each additional slice less and less. This implies that his marginal benefit was: ( a) decreasing. ( b) vertical. ( c) increasing. ( d) constant. Question 21 (4 points) ) Listen Maria's Pizza offers one slice for $2, two slices for $3.50, three slices for $4.50, and four slices for $5.00. Gil orders two slices. From this information, we know that the marginal benefit to Gil of a second slice is at least , and the marginal benefit to Gil of a third slice is less than ( a) $1.50; $1.00 ( b) $3.50; $1.00 O c) $1.50; $4.50 O d) $3.50; $4.50Question 22 (4 points) Listen You decide to quit your $60,000-per-year job as a hotel concierge to illustrate graphic novels. At the end of the first year of illustrating, you have earned $20,000. You also spent $5,000 for paint and paper. Your economic profit in the first year as an illustrator is: ( a) $20,000. b) $15,000. O c) -$40,000. O d) -$45,000.Question 23 (4 points) E () Listen (Table: The Benefit of Producing Artisanal Whiskey) Use Table: The Benefit of Producing Artisanal Whiskey. The marginal benefit of a bottle of whiskey is: Table: The Benefit of Producing Artisanal Whiskey Bottles of whiskey Total revenue 0 SO 1 200 2 215 3 225 4 230 5 233 ( a) constant and equal to $5. ( b) decreasing at a constant rate of $5. ( c) decreasing. O d) increasing at a decreasing rate.Question 24 (4 points) ) Listen Generally, when economists are interested in finding the solution to a "how much" decision, they compare the of an action to the of that action. ( a) explicit costs; implicit costs O b) present value; net present value c) accounting profit; economic profit O d) marginal benefits; marginal costsQuestion 25 (4 points) MI: (Table: Marginal Cost of Sweaters) Use Table: Marginal Cost of Sweaters. The marginal cost of producing sweaters is an example of marginal costs. Table: Ma _inal Cost of Sweaters Quantity of Total cost sweaters O a) constant 0 b) increasing 0 C) decreasing 0 d) random