Question 1 (4 points) ) Listen When economists discuss profit, they mean economic profit. Economic profit is obtained by subtracting which measure of cost from total revenue? (a) accounting costs and the best opportunity foregone ( b) dollar costs only, not opportunity costs ( c) accounting costs only O d) only implicit costs Question 2 (4 points) )Listen To maximize her grade in anthropology, Genevieve should study until her: ( a) marginal benefit of studying begins to decrease. ( b) marginal benefit of studying equals her marginal cost of studying. O c) marginal cost of studying reaches zero. ( d) marginal cost of studying begins to increase.Question 3 (4 points) ) Listen (Figure: The Marginal Benefit Curve) Use Figure: The Marginal Benefit Curve. The total benefit of cleaning seven pools is approximately: Marginal benefit of pool cleaned $40 35 30 Marginal benefit curve, MB 25 20 15 10 5 0 1 2 3 4 5 6 7 Quantity of pools cleaned ( a) $172. Ob) $18. O c) $140. O d) $60.Question 4 (4 points) ) Listen (Table: Marginal Benefit of Sweaters) Use Table: Marginal Benefit of Sweaters. The marginal benefit of producing the fourth sweater is: Table: Marginal Benefit of Sweaters Quantity of Total benefit sweaters 0 1 16 2 31 3 45 4 58 5 70 ( a) $13. O b) $12. ( c) $14. O d) $58.Question 5 {4 points) -I:I (Scenario: Jillian's Cupcake Shop) Use Scenario: Jillian's Cupcake Shop. Given the information provided, Jillian's implicit and explicit costs are: Scenario: Jillian's Cupcake Shop Jillian runs a cupcake shop where she sells cupcakes for $1 each. She employs ve people. each ofwhom worked a total of 500 hours last year; she paid them $10 per hour. Her costs of equipment and raw materials add up to 875,000. Her business ability is legendary, and other companies have offered to pay Jillian $100,000 to come to work for them. She also knows she could sell her cupcake shop for 3150.000. The bank in town pays an annual interest rate of 3% on all funds deposited with it. Q a) 5100.000. 0 b} 330.000. 0 C) $184,500. 0 d) $204,500. Question 6 (4 points) ) Listen Emilia is a civil rights lawyer with her own firm. She travels the country and provides legal advice to high- profile clients. Last year, she earned $250,000 in revenue for her services. She pays one employee $50,000 to manage her office in Chicago and pays $30,000 for rent and utilities for that office. Her accountant tells her that if she sold all her office equipment, she could put that money in the bank and earn $3,000 in interest next year. Emilia also has received an offer to teach law at the University of Chicago at a salary of $100,000. Emilia's accounting profit is and her economic profit is ( a) $200,000; $72,000 ( b) $175,000; $67,000 O c) $170,000; $67,000 O d) $170,000; $70,000Question 7 (4 points) ) Listen If quantity demanded responds substantially to a relatively small change in price, demand is: ( a) insensitive to changes in price. O b) price-elastic. O c) price-inelastic. O d) positively sloped. Question 8 (4 points) Listen Suppose the cross-price elasticity of demand between Taco Bell tacos and Carnitas Lonja (in San Antonio, Texas) tacos is 0.8. If Carnitas Lonja increases the price of its tacos by 10%: ( a) Taco Bell will sell 10% more tacos. ( b) Taco Bell will sell 8% fewer tacos. ( c) Taco Bell will sell 8% more tacos. O d) We cannot tell what will happen to Taco Bell, but Carnitas Lonja will sell 8% fewer tacos.Question 9 (4 points) I: The income elasticity of demand for fresh winter vegetables has been estimated to be 0.6. If income grows by 10% in a given period. demand will: 0 a) increase by more than 10%. O b) decrease by more than 10%. O C} decrease by less than 6%. Q d) increase by about 6%. Question 10 (4 points) mu If the cross elasticity of demand between cheese and yogurt is positive, then: 0 a) the demand for cheese and the demand for yogurt are both price elastic. O b) cheese and yogurt are complements. O C) cheese and yogurt are substitutes. 0 d) the demand for cheese and the demand for yogurt are both price inelastic. Question 11 (4 points) ) Listen (Figure: The Linear Demand Curve for Golf Balls) Use Figure: The Linear Demand Curve for Golf Balls. As a producer, you are interested in maximizing your total revenues in this market. At what price should you sell your good? What is the corresponding total revenue? Price $20 18 16 14 12 10 0 2 4 6 8 10 12 14 16 18 20 Quantity ( a) $20; $200 ( b) $10; $100 O c) so; $100 O d) $5; $100Question 12 (4 points) emu In the market for MacBooks, if the demand curve is elastic, and the price of a MacBook decreases, total revenue will . If the demand curve is inelastic, and the price of a MacBook decreases, total revenue will 0 a) decrease; decrease O b} increase; increase 0 C) increase; decrease Q d) decrease; increase Question 13 (4 points) I: If the executives of the US. silicon chip industry lobby Congress for protection from imports on the grounds that theirs is a new industry that needs time to develop technological eiciency, they are using the argument. O a) cheap foreign labor 0 b) job creation 0 C) national security 0 d) infant industry Question 14 (4 points) () Listen (Table: The Production Possibilities for Electric Cars and Designer boots) Use Table: The Production Possibilities for Electric Cars and Designer boots. The opportunity cost of producing one car in the United States is: Table: The Production Possibilities for Electric Cars and Designer Boots Designer Boots Country Electric Cars (thousands of pairs) United States 80 40 China 60 30 O a) 2,000 pairs of designer boots, which is the same as in China. O b) 500 pairs of designer boots. c) 1,000 pairs of designer boots. ( d) different from the opportunity cost in China.Question 15 (4 points) Listen Sri Lanka, which is labor-abundant, has a comparative advantage in t-shirt production, which is labor- intensive. Which model explains this pattern of comparative advantage? O a) a model of autarky ( b) the Heckscher-Ohlin model ( c) the pauper labor model O d) the Ricardian modelQuestion 16 (4 points) an (Table: The Production Possibilities for Large Tractors and Petroleum) Use Table: The Production Possibilities for Large Tractors and Petroleum. hasi'have an absolute advantage in producing petroleum. Table: The Production Possibilities for La _e Tractors and Petroleum Esmm _ __ O 3) Both the United States and Venezuela O b) The United States 0 C) Neither the United States not Venezuela Q d) Venezuela Question 17 (4 points) )Listen (Table: Production Possibilities for the United States and Brazil) Use Table: Production Possibilities for the United States and Brazil. Both nations can produce automobiles and sugar. In_ the opportunity cost of automobiles is pounds of sugar. Table: Production Possibilities for the United States and Brazil U.S. Production Possibilities Possibility One Possibility Two Automobiles (millions) 10 0 Sugar (millions of pounds) 0 10 Brazil Production Possibilities Possibility One Possibility Two Automobiles (millions) 2 0 Sugar (millions of pounds) 0 12 ( a) the United States; 1 million; 10 million ( b) the United States; 10 million; 1 million O c) Brazil; 1 million; 166,000 O d) Brazil; 1 million; 6 millionQuestion 18 (4 points) an Assume that Brazil imposes an import quota on Nike running shoes from the United States. Relative to the equilibrium world price that would exist in the absence of import quotas, the equilibrium price of Nike shoes in Brazil will most likely , and the equilibrium price of shoes in the United States will most liker O a) decrease; remain the same 0 b) decrease; increase 0 C) increase; decrease O C\" increase; remain the same Question 19 (4 poi nts) mu (F igure: Consumer Equilibrium in the Market for Napkins and Enchiladas) Figure: Consumer Equilibrium in the Market for Napkins and Enchiladas). The highest level of total utility attainable is associated with point on Quantity of napkins 04 93 02 11 a, 12 0 0505 07 0; Quantity of enchiladas O a) A; 12 O b) B; 11 O 6} C;I3 Q d) 1-312 Question 20 (4 points) mu Adam chooses a combination of pineapples and mangos along his budget line. The marginal rate of substitution of pineapples in place ofmangos is 2, the price of pineapples is $0.50, and the price of mangos is $1.50. Adam: O a) should consume fewer pineapples and more mangos to maximize total utility. O 1)} should consume more pineapples and fewer mangos to maximize total utility. O C) is maximizing total utility. Q d) may or may not he maximizing total utility. Question 21 (4 points) Listen Suppose two combinations of apples and pears yield the same level of satisfaction. We can conclude that these combinations are always on: ( a) the same price line. b) the same budget constraint. ( c) the same indifference curve. O d) different indifference curves.Question 22 (4 points) El: Shirley knows her marginal rate of substitution of mangoes for bananas is equal to 3. The price of bananas is $0.50, and the price of mangoes is $1.00. Shirley should: 0 a) buy more mangoes. O '3) buy fewer bananas. O C) buy fewer mangoes. 0 d) buy more bananas. Question 23 (4 points) ) Listen (Figure: Consumer Equilibrium in the Market for Tacos and Manzana Lift) Figure: Consumer Equilibrium in the Market for Tacos and Manzana Lift. The figure shows three of Addison's indifference curves for tacos and Manzana Lift (a popular Manzana Lift in Mexico) per week. Addison has $180 per month to spend on the two goods. The price of tacos is $20, and the price of Manzana Lift is $1.50. If in equilibrium Addison receives marginal utility of 10 utils from the last taco he consumes, his marginal utility from the last Manzana Lift must be utils. Quantity of Manzana Lift 180 160 140 120 100 40 20 0 2 4 6 8 10 12 14 16 Quantity of tacos ( a) 0.50 b) 0.75 O c) 1.5 O d) 13.3Question 24 (4 points) mu (Figure: Indifference Curves and Consumption Bundles for Pie and Beyond Meat Burgers) Use Figure: Indifference Curves and Consumption Bundles for Pie and Beyond Meat Burgers. For this consumer. pie is a.(n) good, and burgers are a(n) good. Pie (slices) 0 H1 H2 Half A s O C) inferior; inferior Q d) inferior; normal Question 25 (4 points) )Listen (Table: Consumer Equilibrium in the Market for Pens and Pencils) Use Table: Consumer Equilibrium in the Market for Pens and Pencils. Assume that the price of pens is $2 each, that the price of pencils is $1 each, and that you have $10 to spend on both goods. To maximize utility, you would consume pen(s) and pencil(s). Table: Consumer Equilibrium in the Market for Pens and Pencils Number of Marginal utility of |Number of Marginal utility pens pens pencils of pencils 1 20 1 12 2 16 2 10 3 12 3 8 4 8 +1 6 5 4 5 4 6 0 6 2 a) 2;3 O b) 5:0 O c) 2:6 O d) 3:4