Review Basic Concepts for AP microeconomics FLVS DBA lesson 6.01. Files are attached with the questions.
Review Basic Concepts: GoodX GoodY 10 D 8 4 6 8 4 l2 2 16 Use the information in the previous table to detennine the answers to the following questions. 1. What is the opportunity cost of increasing the production of Good Y from 4 to 8? 2. What condition could explain the production of 8 units of X and 10 units of Y? "mew-dammi- C -'l' B A \\ A' B' 0' mm Use the information in the previous gaph to answer the following questions. 3. What could have caused the shift from PPC 38' to BC"? 4. What could have caused the shift from PFC 33' to AA"? 5. Does curve CC' represent a constant cost. increasing cost, or decreasing cost curve? 6. What could cause the economy to operate at point X? w-V :Ik Use the information in the previous yaph to answer the following questions. 7. What are the equilibrium price and quantity? 8. What is a consumers' surplus? (Dene) 9. Highlight the area that represents the consumers' surplus. ID. If a price oor is set at W, how will quantity demanded change? (use specic letters) l 1. What will happen to the size of the consumers' surplus after the price oor is set? 12. What kind of condition does the price oor create in the market? 13. Suppose that a family buys all of its clothing from a discount store and treats these items as inferior goods. Under such circumstances. this family's consumption of discount store clothing will necessarily... increase when a family member wins the state lottery. increase when a family member ts a raise in pay at work. remain unchanged when its income rises or falls due to events beyond the family's control. decrease when a family member becomes unemployed. decrease when a family member experiences an increase in income nan-99'? 14. Suppose the breakfast bar increased the price of Snapple, which of the following would happen? The demand for Snapple would decrease. The demand for donuts (complimentary goods) would increase. The supply of water (used in the production of Snapple) would increase. The quantity demanded of Snapple would decrease. The quantity supplied of Snapple would decrease. 99-957? [5. Researchers discover that beets (the red vegetable) are a cure for the common cold, as a result we can reasonably expect... I. the price of heels to fall It. the quantity of beets purchased to increase III. an increase in the demand for beats a. Ionly e. I and III only b. II only f. II and III only c. III only g. I, II and III d. I and II only h. none of the above 16. Assume that consumers are equally willing to eat apples and oranges. What will happen in the market for apples when... the government places a 10% tax on all apple sales, and the price of oranges falls by 5%. a) Draw a single graph that illustrates the impact of the events described above on the market for apples (label completely). b) Explain why these changes have taken place (make sure to use specific terms). c) After all of the changes have taken place, what happens to price and quantity? 17. The quantity demanded of a good rises from 300 to 500 units when the price falls from $30 to $10 per unit. The price elasticity of demand coefficient for this product is... 18. Given that number, is demand for the product price elastic, inelastic, or unit elastic? 19. Provide an example of a good with such an elasticity. Candy Bars 75 Use the information on the previous graph to answer the following questions. 20. What is true of the price elasticity of demand at the price of $.75? 21. What will happen on the graph if consumer incomes rise? 22. What would happen to the revenue earned from Candy Bar sales if the price of Candy bars increases to $1.00? 23. The demand for pizza from Pizza Hut would be... a. price elastic because the price is a small % of income b. price elastic because consumers can choose amongst many pizza varieties . price inelastic because Pizza Hut pizza has many substitutes d. price inelastic because Pizza Hut is a superior / normal good e. unit price elastic because Pizza Hut consumers are loyal to their product, and are not influenced by price changes. 24. What is the short run? 25. What is the long run? 26. Which of the following items is/are variable factors of production for Manhattan Bagel? I. Electricity II. The buildingIll. Cream cheese 27. Ass-m that the market for unskilled labor is in equilibrium. Then an e'ecrive minimm wage is imputed a) Use supply and demand analysis to explain how this price control will affect each of the following...(draw a graph) i) The wage rate of unskilled workers. ii) The number of unskilled workers employed in the market. iii) The number of unskilled workers willing to work. Is) Assume that the fast food industry relies on unskilled labor and assume that the demand for fast food is price inelastic. Use supply and demand analysis to explain how the change in the wage rate will a'ect each of the following for the fast food industry... (draw another graph) i) The price of fast food. ii) The quantity of fast food produced. iii) The revenue earned by the fast food industry
