Microeconomics Essentials

1. Question 1
   • 5 bus tickets
   • 2 bus tickets
   • 0.25 bus tickets
   • 4 bus tickets
2. Question 2
   • economies of scale
   • decreasing marginal utility
   • constant opportunity costs
   • the law of increasing opportunity cost
3. Question 3
   • Only the point where the PPF intersects an axis
   • Any point outside the PPF
   • Any point inside the PPF
   • Any point on the PPF
4. Question 4
   • it has the largest absolute amount of land devoted to wheat
   • it has a lower opportunity cost of producing wheat than other countries
   • it can produce wheat at a lower monetary cost than other countries
   • it can produce more wheat than any other country
5. Question 5
   • the forgone income from not working full-time
   • the cost of textbooks
   • room and board
   • tuition and fees
6. Question 6
   • the PPF is a straight line
   • sunk costs should be ignored
   • people typically consume a variety of goods rather than a single good
   • an increase in supply lowers price
7. Question 7
   • is part of the opportunity cost of a decision
   • has been incurred in the past and cannot be recovered
   • varies with the level of output
   • is the same as a fixed cost
8. Question 8
   • the economy is using its resources efficiently
   • the economy is producing beyond its long-run capacity
   • the economy has a comparative advantage in all goods
   • the economy is not using all its resources or is using them inefficiently
9. Question 9
   • The unemployment rate is 5%.
   • An increase in the minimum wage will reduce employment among low-skilled workers.
   • A price ceiling creates a shortage.
   • The government should increase spending on education.
10. Question 10
    • shifts inward parallel to the original
    • rotates inward, pivoting on the axis of the other good
    • shifts outward parallel to the original
    • rotates outward, pivoting on the axis of the other good
11. Question 11
    • businesses should be guided by ethical considerations rather than profit
    • self-interested actions in a market can lead to positive social outcomes
    • government planning is necessary for economic efficiency
    • markets always fail to allocate resources efficiently
12. Question 12
    • Technological advancement
    • An increase in unemployment
    • A decrease in the labor force
    • A decrease in the capital stock
13. Question 13
    • increases at an increasing rate
    • increases at a decreasing rate
    • decreases as more is consumed
    • remains constant regardless of quantity
14. Question 14
    • goods and services market
    • labor market
    • stock market
    • product market
15. Question 15
    • A decrease in consumer income (assuming smartphones are a normal good)
    • A decrease in the price of smartphones
    • An increase in the price of smartphone components
    • An increase in the popularity of smartphones
16. Question 16
    • remain unchanged
    • become more elastic
    • decrease
    • increase
17. Question 17
    • the quantity demanded is zero
    • the government sets the price
    • demand equals supply
    • the price is as high as possible
18. Question 18
    • in an unpredictable direction
    • upward
    • to the left
    • to the right
19. Question 19
    • increase in supply
    • surplus of the good
    • shortage of the good
    • decrease in demand
20. Question 20
    • shortage
    • black market
    • equilibrium
    • surplus
21. Question 21
    • will definitely decrease
    • will definitely stay the same
    • may increase, decrease, or stay the same
    • will definitely increase
22. Question 22
    • rightward shift of the supply curve
    • rightward shift of the demand curve
    • leftward shift of the demand curve
    • leftward shift of the supply curve
23. Question 23
    • The price of a substitute good
    • Consumer tastes
    • Consumer income
    • Technology
24. Question 24
    • surplus, and the price will tend to rise
    • shortage, and the price will tend to rise
    • shortage, and the price will tend to fall
    • surplus, and the price will tend to fall
25. Question 25
    • right
    • remain unchanged
    • left
    • become more elastic
26. Question 26
    • shift to the right
    • not shift, but there will be a movement along the curve
    • shift to the left
    • become horizontal
27. Question 27
    • deciding whether the change affects supply or demand, determining the direction of the shift, drawing the new equilibrium, and comparing the old and new equilibria
    • calculating elasticity, then adjusting price, then finding the new quantity
    • drawing a PPF, then a budget line, then finding the optimum
    • surveying consumers, then producers, then setting the price
28. Question 28
    • decrease
    • increase
    • remain unchanged
    • become more elastic
29. Question 29
    • quantity demanded to a change in consumer income
    • demand to a change in the price of a substitute
    • quantity demanded to a change in its price
    • quantity supplied to a change in price
30. Question 30
    • inelastic
    • perfectly elastic
    • elastic
    • unit elastic

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