Chapter 1
1) Brian is a college student living off campus. He is studious, yet popular and well-liked. He wants to
do well in college but also loves to socialize. What might be some examples of the scarcity that
Brian may face? Give at least three examples.
2) Mr. Warbucks is a confused economist who is mixed up about cause and effect. Please help Mr.
Warbucks disentangle cause and effect so he can once again understand economics.
3) The night before a science exam, Mark decided to go to the movies with his friends instead of
staying home and reviewing and studying the material. He got 55 percent on his test compared
with the 80 percent that he normally scores.
a. Did Mark face a tradeoff? Explain.
b. What was the opportunity cost of his evening at the movies?
m
er as
4) Anita is learning about economics and while she understands the difference between
co
macroeconomics and microeconomics but is unclear as to the practical differences. She also
eH w
does not know the difference between positive and normative statements. Provide her with two
o.
macroeconomic statements and two microeconomic statements and classify the statements as
rs e
positive or normative. Please explain your classifications.
ou urc
o
Chapter 2
aC s
1) Evaluate the truth of this statement: “Social institutions such as money, firms, markets, and
vi y re
property rights are not necessary for the economy.” Fully explain your answer.
2) Suppose that Maria buys a new machine for making sweaters that enables her to make 25
ed d
sweaters an hour. (She can only 100 scarves per hour.) In one hour, Sally can produce 50 scarves
or 5 sweaters.
ar stu
a. Who now has a comparative advantage in producing sweaters?
b. Can Sally and Maria still gain from trade?
c. Would Sally and Maria be willing to trade 2 sweaters for 30 scarves? Explain your
is
answer.
Th
3) Toyota will continue to produce 3 million cars per year and use the balance of its resources to
upgrade its workers’ skills and create new technology. In three years’ time, Toyota plans to
produce better cars and be more productive. (Source: Financial Post, April 7, 2014)
sh
Based on the news piece above, what is the opportunity cost for Toyota of upgrading its workers’
skills and creating new technology? Explain your answer.
This study source was downloaded by 100000796901680 from CourseHero.com on 04-16-2021 21:01:46 GMT -05:00
https://www.coursehero.com/file/29399153/Microeconomics-practice-questionsdocx/
, 4) Joe and John produce skis and snowboards. The tables show their production possibilities. Joe
produces 10 snowboards and 60 skis a week; John produces 15 snowboards and 10 skis a week.
a. Who has a comparative advantage in producing (i) snowboards and (ii) skis?
b. If Joe and John specialize and trade 1 snowboard for 1 ski, what are the gains from
trade?
Chapter 3
1) In November 2015, the money price of a carton of milk was $3.98 and the money price of gallon
of gasoline was $2.21. Calculate the relative price of a gallon of gasoline in terms of milk.
2) In 2014, the price of corn fell and some corn farmers switched from growing corn in 2015 to
growing soybeans.
a. Does this fact illustrate the law of demand or the law of supply? Explain your answer.
m
er as
b. Why would a corn farmer grow soybeans?
co
eH w
3) The money price of a Keurig coffee maker is $100 and the money price of a movie ticket is $10.
o.
a. rs e
What is the opportunity cost of a Keurig coffee maker in terms of a movie ticket?
ou urc
b. What is the relative price of the movie tickets in terms of a Keurig coffee maker?
o
aC s
4) Shoppers are buying apples in September for $1.13 a pound rather than the $1.49 a
vi y re
pound they paid last year. With the price lower than usual, some growers stored the harvest to sell
to juice and jelly makers; others took some apples to sell on the farm and to feed their horses; still
others used the harvest to make and sell apple cider and apple sauce.
a. Explain how the market for apples would have changed if growers had not gathered
ed d
their apples and produced cider and apple sauce and but offered locals “you pick for free.”
ar stu
b. Describe the changes in demand and supply in the market for apple juice.
Chapter 4
is
1) The quantity of cosmetic surgery demanded increases by 20 percent when the price of cosmetic
Th
surgery falls by 20 percent. Is the demand for cosmetic surgery inelastic, elastic, or unit elastic?
Explain your answer.
sh
This study source was downloaded by 100000796901680 from CourseHero.com on 04-16-2021 21:01:46 GMT -05:00
https://www.coursehero.com/file/29399153/Microeconomics-practice-questionsdocx/
1) Brian is a college student living off campus. He is studious, yet popular and well-liked. He wants to
do well in college but also loves to socialize. What might be some examples of the scarcity that
Brian may face? Give at least three examples.
2) Mr. Warbucks is a confused economist who is mixed up about cause and effect. Please help Mr.
Warbucks disentangle cause and effect so he can once again understand economics.
3) The night before a science exam, Mark decided to go to the movies with his friends instead of
staying home and reviewing and studying the material. He got 55 percent on his test compared
with the 80 percent that he normally scores.
a. Did Mark face a tradeoff? Explain.
b. What was the opportunity cost of his evening at the movies?
m
er as
4) Anita is learning about economics and while she understands the difference between
co
macroeconomics and microeconomics but is unclear as to the practical differences. She also
eH w
does not know the difference between positive and normative statements. Provide her with two
o.
macroeconomic statements and two microeconomic statements and classify the statements as
rs e
positive or normative. Please explain your classifications.
ou urc
o
Chapter 2
aC s
1) Evaluate the truth of this statement: “Social institutions such as money, firms, markets, and
vi y re
property rights are not necessary for the economy.” Fully explain your answer.
2) Suppose that Maria buys a new machine for making sweaters that enables her to make 25
ed d
sweaters an hour. (She can only 100 scarves per hour.) In one hour, Sally can produce 50 scarves
or 5 sweaters.
ar stu
a. Who now has a comparative advantage in producing sweaters?
b. Can Sally and Maria still gain from trade?
c. Would Sally and Maria be willing to trade 2 sweaters for 30 scarves? Explain your
is
answer.
Th
3) Toyota will continue to produce 3 million cars per year and use the balance of its resources to
upgrade its workers’ skills and create new technology. In three years’ time, Toyota plans to
produce better cars and be more productive. (Source: Financial Post, April 7, 2014)
sh
Based on the news piece above, what is the opportunity cost for Toyota of upgrading its workers’
skills and creating new technology? Explain your answer.
This study source was downloaded by 100000796901680 from CourseHero.com on 04-16-2021 21:01:46 GMT -05:00
https://www.coursehero.com/file/29399153/Microeconomics-practice-questionsdocx/
, 4) Joe and John produce skis and snowboards. The tables show their production possibilities. Joe
produces 10 snowboards and 60 skis a week; John produces 15 snowboards and 10 skis a week.
a. Who has a comparative advantage in producing (i) snowboards and (ii) skis?
b. If Joe and John specialize and trade 1 snowboard for 1 ski, what are the gains from
trade?
Chapter 3
1) In November 2015, the money price of a carton of milk was $3.98 and the money price of gallon
of gasoline was $2.21. Calculate the relative price of a gallon of gasoline in terms of milk.
2) In 2014, the price of corn fell and some corn farmers switched from growing corn in 2015 to
growing soybeans.
a. Does this fact illustrate the law of demand or the law of supply? Explain your answer.
m
er as
b. Why would a corn farmer grow soybeans?
co
eH w
3) The money price of a Keurig coffee maker is $100 and the money price of a movie ticket is $10.
o.
a. rs e
What is the opportunity cost of a Keurig coffee maker in terms of a movie ticket?
ou urc
b. What is the relative price of the movie tickets in terms of a Keurig coffee maker?
o
aC s
4) Shoppers are buying apples in September for $1.13 a pound rather than the $1.49 a
vi y re
pound they paid last year. With the price lower than usual, some growers stored the harvest to sell
to juice and jelly makers; others took some apples to sell on the farm and to feed their horses; still
others used the harvest to make and sell apple cider and apple sauce.
a. Explain how the market for apples would have changed if growers had not gathered
ed d
their apples and produced cider and apple sauce and but offered locals “you pick for free.”
ar stu
b. Describe the changes in demand and supply in the market for apple juice.
Chapter 4
is
1) The quantity of cosmetic surgery demanded increases by 20 percent when the price of cosmetic
Th
surgery falls by 20 percent. Is the demand for cosmetic surgery inelastic, elastic, or unit elastic?
Explain your answer.
sh
This study source was downloaded by 100000796901680 from CourseHero.com on 04-16-2021 21:01:46 GMT -05:00
https://www.coursehero.com/file/29399153/Microeconomics-practice-questionsdocx/
