PRINCIPLES OF MICROECONOMICS QUIZ
1 WITH COMPLETE SOLUTIONS
/. Suppose you currently live and work in Cleveland, earning a salary of $75,000 per
year and spending $30,000 for housing. You just heard that you will be transferred to a
city in California where housing is 50 percent more expensive. In negotiating a new
salary, your objective is to keep your real income constant.
Your new target salary is? - Answer-✅$9000
/.___ questions study they concept of what ought to be. ___ questions study the
concept of what is.
A 22- year old student is asking a ___ question when she considers the opportunities
opened after she finishes graduate school. The decision of whether government should
provide forgiveness for student loan debt is a ___ question. - Answer-✅Normative ,
Postive
positive, normative
/.In one minute, Country B can produce either 500 TVs and no computers or 250
computers and no TVs. Similarly, in one minute, Country C can produce either 800 TVs
or 200 computers. This information is summarized by the following table.
Calculate the opportunity cost of production for each country.
Country B 500 TVs , 250 computers
Country C 800 TVs , 200 computers
Based on the comparative opportunity cost data in your table, the comparative
advantage in TVs lies with Country ___ , while the comparative advantage in computers
is held by Country ___ - Answer-✅Country B 1/2 computers , 2 TVs
Country C 1/4 computers, 4 TVs
Country C
Country B
/.Bella can produce either a combination of 60 silk roses and 80 silk leaves or a
combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and
80 silk leaves, what is the opportunity cost of producing an additional 10 silk roses? -
Answer-✅25 Silk leaves
/.All decisions, and the trade-offs associated with them, embody an opportunity cost
because of - Answer-✅scarcity
, /.Refer to the diagram to the right. Point A is - Answer-✅inefficient in that not all
resources are being used.
/.Adam Smith listed three reasons for specialization to increase productivity. What are
they? - Answer-✅Repetition, Continuity, and Innovation.
/.The table above shows the output per week of two jewelers, Serena and Haley. They
can either devote their time to making bracelets or making necklaces.
Serena 8 bracelets & 16 necklaces
Haley 9 bracelets & 12 necklaces
What is Serena's opportunity cost of making a bracelet? - Answer-✅2 necklaces
/.If the production possibilities frontier is ___, then opportunity costs are constant as
more of one good is produced. - Answer-✅linear
/.Outsourcing ___ production costs and ___ consumer prices. - Answer-✅Arrow down
Arrow down
/.The table above shows the output per month of two people, Fred and Barney. They
can either devote their time to making pogo sticks or making unicycles.
Fred 24 pogo sticks & 8 unicycles
Barney 28 pogo sticks & 14 unicycles
Which of the following statements is true? - Answer-✅Barney has a comparative
advantage in making unicycles and Fred in making pogo sticks.
/.Adam Smith suggested that people are motivated exclusively by self-interest. -
Answer-✅False
/.Selma is a better salesperson than Mark in both city A and city B.
Selma 48 in city A & 40 in city B
Mark 34 city A & 10 city B
a. If each person handles one city and the objective is to maximize total sales, then
Selma should handle ___ and Mark should handle city ___.
b.According to your answer, does Selma handle the city for which she has the larger
productivity advantage over Mark? - Answer-✅a. city B , city A
b. Yes
/.Refer to the diagram to the right which shows various points on three different
production possibilities frontiers for a nation. A movement from X to Y - Answer-✅could
occur because of an influx of immigrant labor.
1 WITH COMPLETE SOLUTIONS
/. Suppose you currently live and work in Cleveland, earning a salary of $75,000 per
year and spending $30,000 for housing. You just heard that you will be transferred to a
city in California where housing is 50 percent more expensive. In negotiating a new
salary, your objective is to keep your real income constant.
Your new target salary is? - Answer-✅$9000
/.___ questions study they concept of what ought to be. ___ questions study the
concept of what is.
A 22- year old student is asking a ___ question when she considers the opportunities
opened after she finishes graduate school. The decision of whether government should
provide forgiveness for student loan debt is a ___ question. - Answer-✅Normative ,
Postive
positive, normative
/.In one minute, Country B can produce either 500 TVs and no computers or 250
computers and no TVs. Similarly, in one minute, Country C can produce either 800 TVs
or 200 computers. This information is summarized by the following table.
Calculate the opportunity cost of production for each country.
Country B 500 TVs , 250 computers
Country C 800 TVs , 200 computers
Based on the comparative opportunity cost data in your table, the comparative
advantage in TVs lies with Country ___ , while the comparative advantage in computers
is held by Country ___ - Answer-✅Country B 1/2 computers , 2 TVs
Country C 1/4 computers, 4 TVs
Country C
Country B
/.Bella can produce either a combination of 60 silk roses and 80 silk leaves or a
combination of 70 silk roses and 55 silk leaves. If she now produces 60 silk roses and
80 silk leaves, what is the opportunity cost of producing an additional 10 silk roses? -
Answer-✅25 Silk leaves
/.All decisions, and the trade-offs associated with them, embody an opportunity cost
because of - Answer-✅scarcity
, /.Refer to the diagram to the right. Point A is - Answer-✅inefficient in that not all
resources are being used.
/.Adam Smith listed three reasons for specialization to increase productivity. What are
they? - Answer-✅Repetition, Continuity, and Innovation.
/.The table above shows the output per week of two jewelers, Serena and Haley. They
can either devote their time to making bracelets or making necklaces.
Serena 8 bracelets & 16 necklaces
Haley 9 bracelets & 12 necklaces
What is Serena's opportunity cost of making a bracelet? - Answer-✅2 necklaces
/.If the production possibilities frontier is ___, then opportunity costs are constant as
more of one good is produced. - Answer-✅linear
/.Outsourcing ___ production costs and ___ consumer prices. - Answer-✅Arrow down
Arrow down
/.The table above shows the output per month of two people, Fred and Barney. They
can either devote their time to making pogo sticks or making unicycles.
Fred 24 pogo sticks & 8 unicycles
Barney 28 pogo sticks & 14 unicycles
Which of the following statements is true? - Answer-✅Barney has a comparative
advantage in making unicycles and Fred in making pogo sticks.
/.Adam Smith suggested that people are motivated exclusively by self-interest. -
Answer-✅False
/.Selma is a better salesperson than Mark in both city A and city B.
Selma 48 in city A & 40 in city B
Mark 34 city A & 10 city B
a. If each person handles one city and the objective is to maximize total sales, then
Selma should handle ___ and Mark should handle city ___.
b.According to your answer, does Selma handle the city for which she has the larger
productivity advantage over Mark? - Answer-✅a. city B , city A
b. Yes
/.Refer to the diagram to the right which shows various points on three different
production possibilities frontiers for a nation. A movement from X to Y - Answer-✅could
occur because of an influx of immigrant labor.
