Los Angeles Mission College » Economics » Econ 001 - Principles of Economics » Fall 2021

Econ 001 - Principles of Economics » Fall 2021 » Practice Final

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Question #1

In the short run, two types of inputs that firms use are called

A. average and inferior

B. inferior and substitutes

C. variable and fixed

D. substitutes and variable

Question #2

If a good has "elastic" Demand, then

A. it has few or no substitutes the time period available for its purchase is short it's considered a small (minor) expense to the consumer it is a necessity

B. it's considered a large (major) expense to the consumer the time period available for its purchase is long the definition of the "market" for this good is narrow it is a luxury it has many substitutes

C. the definition of the "market" for this good is broad

D. it has few or no substitutes the time period available for its purchase is short it's considered a small (minor) expense to the consumer it is a necessity

E. it has few or no substitutes the time period available for its purchase is short it's considered a small (minor) expense to the consumer it has many substitutes

Question #3

If demand for a good is unit elastic, an increase in the Price will increase Total Revenue.

A. TRUE

B. FALSE

Question #4

When people exchange goods and services they are made better off by completing these trades, economists say.

A. FALSE

B. TRUE

Question #5

Karla can groom 4 Large dogs or 12 Small dogs, next weekend. Her "opportunity cost" of grooming 1 Large dog is

A. 3 Small dogs

B. 2 Small dogs

C. 8 Small dogs

D. None of these is correct.

E. 12 Small dogs

F. 1 Small dog

Question #6

Mexico Canada Printers 40 20 Wood Tables 160 120 Use the table above: Mexico's "opportunity cost" of producing 1 Wood Table is:

A. 4 wood tables

B. 4 printers

C. 1/6 printer

D. 20 printers

E. 40 printers

F. 1/4 or .25 printer

Question #7

Mexico Canada Printers 40 20 Wood Tables 160 200 Use the table above: Which 'Price' for 1 Printer (in terms of Wood Tables trade) will benefit both countries?

A. 2 wood tables

B. 12 wood tables

C. 6 wood tables, 8 wood tables

D. All of these is correct.

Question #8

People with "Type 1 diabetes" must have Insulin to live. That means their "Demand for insulin" will be very inelastic.

A. FALSE

B. TRUE

Question #9

Jan is willing to pay a maximum of $800 for a flight ticket to London. If the Price for a flight ticket to London is $799, her Consumer Surplus is:

A. $0.

B. $800.

C. $1599.

D. None of these is correct.

E. $1.

Question #10

The supply of Rembrant paintings is more elastic than the supply of wood baseball bats.

A. TRUE

B. FALSE

Question #11

Which of the following are examples of "Public Goods"?

A. a baseball hat, a cold beer, and a tee shirt

B. a highway, a cold beer, and a tee shirt

C. a light house, a fire station, and a highway

D. a light house, a cold beer, and a tee shirt

Question #12

Compared to a perfectly competitive market (with no monopoly power), a Monopoly market will usually generate

A. lower prices and lower output.

B. higher prices and higher output.

C. lower prices and higher output.

D. higher prices and lower output.

Question #13

Which of the following is NOT a type of industry?

A. monopoly

B. duopoly

C. perfect competition

D. monopolistic competition

E. All of these are types of industries.

F. oligarchy

Question #14

During a trade, who is more self-interested (selfish) in wanting a good price. The buyer or the seller?

A. They are equally self-interested. The seller will try to sell to the highest bidder, and the buyer will buy from the lowest offer.

B. The seller is more self-interested. That's why we call some companies "greedy."

C. The buyer is more self-interested. That's why we call some buyers "stingy" or "cheap."

Question #15

Mario would sell his iphone if he can get at least $250 for it. Shannon wants to buy it, and would pay Mario at most $300 for it. They agree to a Price of $295. Which of the following statements is true:

A. Mario's Profit is $5 and Shannon's Consumer Surplus is $5.

B. All of these are correct answers.

C. Total Trade Gains (Social Surplus) = $50. and Shannon's Consumer Surplus is $5.

Question #16

A oligopoly market has

A. one firm.

B. two firms.

C. a few dominant firms.

D. many firms.

Question #17

Which of the following has more inelastic Demand:

A. Food in general

B. Chicken salad sandwiches

Question #18

Jon will sell his rare bottle of wine for a minimum of $250. He gets offered a Price of $650. His Profit (producer surplus) from selling is:

A. $250

B. $900

C. $650

D. $0

E. $450

F. $400

Question #19

Economists view human behavior as individuals "making choices." Sociology views behavior as a matter of one's group identity and "social problems."

A. TRUE

B. FALSE

Question #20

"Decreasing Returns to Scale" is also called:

A. Constant Returns to Scale, Economies of Scale

B. Constant Returns to Scale, Falling LRAC

C. Economies of Scale, Rising LRAC

D. Rising LRAC ,Diseconomies of Scale

Question #21

"Monopolistic Competition" means an industry has only one company (firm).

A. FALSE

B. TRUE

Question #22

Under Socialism, individuals are free to take risks, try new products, and get rewards of high profit.

A. FALSE

B. TRUE

Question #23

"Private Goods" are rival in consumption and excludable.

A. FALSE

B. TRUE

Question #24

Price Quantity demanded Quantity supplied $35 450 100 $40 350 110 $45 270 120 $50 250 160 $55 210 180 $60 200 200 $65 180 220 Use the Table above, showing the Market for hair color appointments. What is the equilibrium Price, in the market?

A. $50

B. $35

C. None of these is correct.

D. $55

E. $60

F. $65

Question #25

Two Goods, A and B, have a Cross-Price Elasticity of +1.2. That means the two goods are

A. substitutes, such as iphones and android phones

B. complements, such as pasta and pasta sauce

C. inelastic goods

D. inferior goods

Question #26

Number of workers: Total Product: 1 7 2 30 3 42 4 50 Use the Total Product table above. What is the Marginal Product of the 2nd worker?

A. 42

B. 15

C. 23

D. 37

E. 7

F. 50

Question #27

A "Capitalist" economy has the following features:

A. economic property is collectively (centrally) owned and controlled there are few choices of different consumer goods. unemployment and job instability are not issues; everyone is guaranteed a job. economic property is privately (individually) owned and controlled.

B. income inequality is part of the system. there are many choices of consumer goods. there is constant competition and discovery of new technologies. economic property is privately (individually) owned and controlled. decisions are decentralized and made by individual entrepreneurs

C. economic property is collectively (centrally) owned and controlled there are few choices of different consumer goods. unemployment and job instability are not issues; everyone is guaranteed a job. decisions are decentralized and made by individual entrepreneurs

D. economic property is collectively (centrally) owned and controlled there are few choices of different consumer goods. unemployment and job instability are not issues; everyone is guaranteed a job. there are many choices of consumer goods. income inequality is part of the system.

Question #28

"Minimum wage laws" in the labor market are an example of a price ceiling.

A. TRUE

B. FALSE

Question #29

The Law of Demand states: an increase in the price of a good

A. decreases the demand for that good.

B. increases the quantity supplied of that good.

C. increases the supply of that good.

D. decreases the quantity demanded for that good

Question #30

North Korea is an example of a centrally planned (socialist) economy.

A. FALSE

B. TRUE

Question #31

Mario would sell his iphone if he can get at least $250 for it. Shannon wants to buy it, and would pay Mario at most $300 for it. Which of the following prices would produce trade gains for BOTH of them?

A. All of these prices would work.

B. $200, $275

C. $275, $290

D. $350, $550

E. None of these prices would work

Question #32

A. $60

B. 180

C. None of these is correct.

D. 200

E. 160

F. 250

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