ECON 1000 Exam Prep 2023/2024
When the price is above the market-clearing price, we see
Select one:
A. rising inventories, excess supply, cause the price to fall.
B. falling inventories, shortages, cause the price to rise.
C. rising inventories, excess supply, cause the price to rise.
D. falling inventories, shortages, cause the price to fall.
E. the market-clearing price rises. Answer - A
During this summer Elon has decided to attend summer school, which precludes him from working at his
usual summer job in which he normally earns $3,500 for the summer. His tuition cost is $2,000, books
and supplies cost $250, and room and board cost $750. The opportunity cost of attending summer
school is
Select one:
A. $5,500.
B. $3,500.
C. $3,000.
D. $6,500.
E. $4,500. Answer - E
Negative externalities are not
Select one:
A. costs that affect others who are external to a choice or trade
B. costs that we create, but don't pay for directly
C. part of monetary costs
D. part of opportunity costs
E. C & D Answer - E
,If bus fares rise but more people are riding the bus, it is likely that
Select one:
A. demand decreased.
B. demand increased.
C. supply decreased.
D. the bus company is incompetent.
E. supply increased. Answer - B
Denver earns $14 an hour working at Costco. During the school term, he works 20 hours a week. In the
summer he works 40 hours a week even though his wage remains the same. The explanation is that
Select one:
A. the marginal benefit of the wage is higher in the summer.
B. the marginal opportunity cost of his time is higher during the summer.
C. there has been a fall in the price of a complementary product or service.
D. the marginal opportunity cost of his time is lower during the summer.
E. he expects his wage will be higher in the future. Answer - D
CEOs of the S&P 500 companies are talking about business. Which quotation refers to a change in
quantity demanded?
Select one:
A. "Because it's been such a warm winter, our sales of wool scarves are down from last year."
B. "Since our competitors raised their prices, our sales have tripled."
C. "The Green movement has made our biodegradable products best-sellers."
D. "We decided to cut our prices, and there has been a big increase in our sales."
E. None of the above Answer - D
In a day, Linia can bake 16 apple pies or 8 maple pecan danish; Ferdous can bake 9 apple pies or 3 maple
pecan danish. Which statement is true?
Select one:
A. Linia's opportunity cost of a danish is 2 pies.
, B. Ferdous's opportunity cost of a danish is 3 pies.
C. Ferdous's opportunity cost of a pie is 1/3 danish.
D. all of the above.
E. none of the above. Answer - D
The above figure shows a willingness to pay by consumers and marginal costs for producers in the butter
market. If the 1st unit of butter for $3, what is the consumers surplus and producer surplus on that unit?
Select one:
A. consumers surplus $7 and producer surplus $5
B. consumers surplus $12 and producer surplus $6
C. consumers surplus -$1 and producer surplus $1
D. consumers surplus $3 and producer surplus $3
E. consumers surplus $1 and producer surplus $1 Answer - E
Equilibrium prices
Select one:
A. do not tend to change.
B. eliminate frustrated buyers and sellers.
C. are Market-clearing prices.
D. equalize quantity demanded and quantity supplied.
E. do all of the above. Answer - E
White oaks are renowned for their highly durable wood, and they are prized for furniture. When the
price of oaks falls,
Select one:
A. the supply curve of furniture shifts rightward.
B. the supply curve of furniture shifts leftward.
C. both the demand curve and supply curves of furniture shift rightward.
D. the demand curve for furniture shifts rightward.
When the price is above the market-clearing price, we see
Select one:
A. rising inventories, excess supply, cause the price to fall.
B. falling inventories, shortages, cause the price to rise.
C. rising inventories, excess supply, cause the price to rise.
D. falling inventories, shortages, cause the price to fall.
E. the market-clearing price rises. Answer - A
During this summer Elon has decided to attend summer school, which precludes him from working at his
usual summer job in which he normally earns $3,500 for the summer. His tuition cost is $2,000, books
and supplies cost $250, and room and board cost $750. The opportunity cost of attending summer
school is
Select one:
A. $5,500.
B. $3,500.
C. $3,000.
D. $6,500.
E. $4,500. Answer - E
Negative externalities are not
Select one:
A. costs that affect others who are external to a choice or trade
B. costs that we create, but don't pay for directly
C. part of monetary costs
D. part of opportunity costs
E. C & D Answer - E
,If bus fares rise but more people are riding the bus, it is likely that
Select one:
A. demand decreased.
B. demand increased.
C. supply decreased.
D. the bus company is incompetent.
E. supply increased. Answer - B
Denver earns $14 an hour working at Costco. During the school term, he works 20 hours a week. In the
summer he works 40 hours a week even though his wage remains the same. The explanation is that
Select one:
A. the marginal benefit of the wage is higher in the summer.
B. the marginal opportunity cost of his time is higher during the summer.
C. there has been a fall in the price of a complementary product or service.
D. the marginal opportunity cost of his time is lower during the summer.
E. he expects his wage will be higher in the future. Answer - D
CEOs of the S&P 500 companies are talking about business. Which quotation refers to a change in
quantity demanded?
Select one:
A. "Because it's been such a warm winter, our sales of wool scarves are down from last year."
B. "Since our competitors raised their prices, our sales have tripled."
C. "The Green movement has made our biodegradable products best-sellers."
D. "We decided to cut our prices, and there has been a big increase in our sales."
E. None of the above Answer - D
In a day, Linia can bake 16 apple pies or 8 maple pecan danish; Ferdous can bake 9 apple pies or 3 maple
pecan danish. Which statement is true?
Select one:
A. Linia's opportunity cost of a danish is 2 pies.
, B. Ferdous's opportunity cost of a danish is 3 pies.
C. Ferdous's opportunity cost of a pie is 1/3 danish.
D. all of the above.
E. none of the above. Answer - D
The above figure shows a willingness to pay by consumers and marginal costs for producers in the butter
market. If the 1st unit of butter for $3, what is the consumers surplus and producer surplus on that unit?
Select one:
A. consumers surplus $7 and producer surplus $5
B. consumers surplus $12 and producer surplus $6
C. consumers surplus -$1 and producer surplus $1
D. consumers surplus $3 and producer surplus $3
E. consumers surplus $1 and producer surplus $1 Answer - E
Equilibrium prices
Select one:
A. do not tend to change.
B. eliminate frustrated buyers and sellers.
C. are Market-clearing prices.
D. equalize quantity demanded and quantity supplied.
E. do all of the above. Answer - E
White oaks are renowned for their highly durable wood, and they are prized for furniture. When the
price of oaks falls,
Select one:
A. the supply curve of furniture shifts rightward.
B. the supply curve of furniture shifts leftward.
C. both the demand curve and supply curves of furniture shift rightward.
D. the demand curve for furniture shifts rightward.
