Micro ECON FINAL #3 review (updated)
questions with verified solutions
Which statement(s) is(are) NOT true?
I. An increase in the minimum wage will not affect employment.
II. About 15% of all hourly workers in the United States earn the minimum wage.
III. Raising the minimum wage is an effective method to combat poverty.
IV. Raising the minimum wage decreases employment of low-skilled workers. - correct answer
✔✔I and IV only
Why do revenues increase when producers decrease the price of a good that has elastic
demand? - correct answer ✔✔Increased sales more than makeup for the loss in revenue per
unit sold.
A decrease in the opportunity cost of steel production will: - correct answer ✔✔make suppliers
more likely to produce steel, thus shifting the supply curve down and to the right.
According to economists, when the FDA raises the approval requirements for new drugs: -
correct answer ✔✔society will potentially lose a new drug approval.
In the table, a surplus occurs at a price _____, and a shortage occurs at a price _____. - correct
answer ✔✔of $17; below $15
Which of the following explains why someone with an absolute advantage in painting houses
may NOT spend their time painting houses? - correct answer ✔✔They may be relatively better
at something else than painting houses.
questions with verified solutions
Which statement(s) is(are) NOT true?
I. An increase in the minimum wage will not affect employment.
II. About 15% of all hourly workers in the United States earn the minimum wage.
III. Raising the minimum wage is an effective method to combat poverty.
IV. Raising the minimum wage decreases employment of low-skilled workers. - correct answer
✔✔I and IV only
Why do revenues increase when producers decrease the price of a good that has elastic
demand? - correct answer ✔✔Increased sales more than makeup for the loss in revenue per
unit sold.
A decrease in the opportunity cost of steel production will: - correct answer ✔✔make suppliers
more likely to produce steel, thus shifting the supply curve down and to the right.
According to economists, when the FDA raises the approval requirements for new drugs: -
correct answer ✔✔society will potentially lose a new drug approval.
In the table, a surplus occurs at a price _____, and a shortage occurs at a price _____. - correct
answer ✔✔of $17; below $15
Which of the following explains why someone with an absolute advantage in painting houses
may NOT spend their time painting houses? - correct answer ✔✔They may be relatively better
at something else than painting houses.
