Assignment: INTERMEDIATE MICROECONOMICS
1. Which of the following are not the best ways to measure differences in cost of production?
a. The amount of resources needed to produce a unit of output.
b. The opportunity cost of sacrificing one good for another.
c. The number of hours required to produce a unit of output
d. The quantity of goods and services demanded by consumers.
Use the data below to answer the questions 2 - 4
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Labour hours needed to make one unit of
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Amount produced in 40 hours
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Cheese
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Bread
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Cheese
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Bread
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China
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1
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2
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40
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20
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South Korea
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2
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8
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20
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5
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2. The opportunity cost of 1 unit of cheese in China is
a. 4 breads c. ½ bread
b. 2 breads d. 3 breads
3. The opportunity cost of 1 unit of bread in South Korea is
a. 4 cheeses c. 1 cheese
b. 2 cheeses d. ¼ cheese
4. China and South Korea could benefit by China specializing in
a. bread and South Korea specializing cheese
b. cheese and South Korea specializing in bread
c. both goods and South Korea specializing in neither good
d. neither good and South Korea specializing in both goods
5. Economists generally support
a. export subsidies c. government management of trade
b. trade restrictions d. free international trade
Use the data below to answer the question 6
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Labour hours needed to make one unit of:
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Amount produced in 24 hours
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Baskets
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Birdhouses
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Chinese Dress
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Chinese Flower
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Zeng Weixin
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6
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2
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4
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12
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Feng Jing
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3
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4
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8
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6
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6. The opportunity cost of 1 basket for Zeng Weixin is
a. ¼ birdhouse c. ¾ birdhouse
b. 1 birdhouse 4/3 birdhouse
7. Wu Xiangxin and Zhang Guoqing are two designers who both make computerized designs and handcrafts. In one month, Wu Xiangxin can make 4 computerized designs or 20 handcrafts, where Zhang Guoqing can make 6 computerized designs or 18 handcrafts. Given this, we know that the opportunity cost of 1 chair for
a. Wu Xiangxin is 1/5 computerized designs and 1/3 computerized designs for Zhang Guoqing.
b. Wu Xiangxin is 5 computerized designs and 3 computerized designs for Zhang Guoqing.
c. Wu Xiangxin is 1/3 computerized designs and 1/5 computerized designs for Zhang Guoqing
d. Wu Xiangxin is 3 computerized designs and 5 computerized designs for Zhang Guoqing
8. People make decisions at the margin by
a. Following tradition c. experience
b. Calculating dollar costs d. comparing costs and benefits
9. The following three steps can be used to explain changes in equilibrium situation except:
a. Decide whether the event shifts the supply or demand curve (or both).
b. Decide whether equilibrium is caused by prices of other goods and services
c. Decide whether the curve(s) shift(s) to the left or to the right.
d. Use the supply-and-demand diagram to see how the shift affects equilibrium price and quantity.
10. When quantity supplied decreases at every possible price, we know that the supply curve has
a. shifted to the left.
b. shifted to the right.
c. not shifted; rather, we have moved along the supply curve to a new point on the same curve.
d. not shifted; rather, the supply curve has become flatter.
11. Suppose the price level rises, but the number of dollars you are paid per hour stays the same. This means that your
a. nominal wage is higher.
b. nominal wage is lower.
c. real wage is higher.
d. real wage is lower.
12. Based on the quantity equation, if M = 3,000, P = 2, and Y = 4,500, then V = a. 1.33. b. 1.5. c. 3. d. 6.75.
13. At a price of $4.95, the four Chinese classics is expected to sell 9000 copies. If the Four Chinese Classics is offered for sale at a price of $3.95, then the publisher can expect to sell
a. Less than 9000
b. 9000 copies
c. More than 9,0000 copies
d. It is impossible to predict the effect of a higher price on the number of units of a product that a firm will be willing to produce.
14. At a price of $299.95, the manufacturer of a portable gas-powered generator is willing to produce 19,000 units per quarter. At a price of $349.95, it is likely that the manufacturer will be willing to produce
a. more than 19000 units per quarter
b. 19,000 units per quarter
c. Less than 19,000 units per quarter
d. It is impossible to predict the effect of a higher price on the number of units of a product that a firm will be willing to produce.
15. If a rise in supply exceeds a rise in demand, then we should expect
a. The equilibrium price and quantity levels will rise.
b. The equilibrium price will rise while the equilibrium quantity will decline
c. The equilibrium price will fall while the equilibrium quantity will rise
d. The equilibrium price and quantity levels will decline
16. Assume that firms in an industry observe a 10% increase in the productivity of labor, but to get there they had to increase t he cost of labor by 5%. What should be expected to happen in the output market as a result of this development?
a. The supply should decrease c. the supply should increase
b. The supply should remain unchanged d. the demand should increase
17. If a computer software company introduces a new program and finds that orders from wholesalers far exceed the number of units that are being produced,
a. there is an excess supply and price can be expected to decrease
b. there is an excess supply and price can be expected o decrease
c. there is excess demand and price can be expected to decrease
d. there is an excess demand and price can be expected to increase
Respond with TRUE or FALSE
18. A circular-flow diagram is a visual model of how an economy is organized
19. The producer who has the smaller opportunity cost of producing a good is said to have an absolute advantage in producing that good.
20. "Society would be better if the welfare system were abolished" is a normative statement, not a positive statement.