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Economics Review for Exam 1

Use your clickers for this quick exam review covering topics such as production, trade-offs, equilibrium, and elasticity of demand. Test your knowledge in 1-minute intervals per question.

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Economics Review for Exam 1

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  1. Review for Exam 1 Use Your Clickers You have 1 minute per question

  2. Please Don’t Get Confused

  3. Twelve friends got together to celebrate a birthday. If the birthday cake is cut into 12 pieces the same size and 1 slice give to each person, the cake is distributed: • Efficient, but not equitable • Equitable, but not efficient • Efficient and equitable • Equitable

  4. Twelve friends got together to celebrate a birthday. If the birthday cake is cut into 12 pieces the same size and 1 slice give to each person, the cake is distributed: • Equitable

  5. How can this country ever produce at point E? Eliminates unemployment Raises Taxes Permits more immigration Increases the cost of production by decreasing the use of technology

  6. How can this country ever produce at point E? Permits more immigration

  7. If the production possibility frontier is a straight line, which of the following is true? • Opportunity Costs are constant • The firm faces increasing costs • The firm faces decreasing costs • There is no trade-off between the two goods represented

  8. If the production possibility frontier is a straight line, which of the following is true? • Opportunity Costs are constant

  9. In one day, Kessy can bake 10 cookies or mix 15 glasses of lemonade. His friend, Ava, can make 10 cookies or 10 glasses of lemonade. His other fiend, Ian, can make 10 cookies or 20 glasses of lemonade.Who has the lowest opportunity cost in cookie production? • Kessy • Ava • Ian • Kessy and Ava

  10. In one day, Kessy can bake 10 cookies or mix 15 glasses of lemonade. His friend, Ava, can make 10 cookies or 10 glasses of lemonade. His other fiend, Ian, can make 10 cookies or 20 glasses of lemonade.Who has the lowest opportunity cost in cookie production? • Ava

  11. If the demand for tires goes down when the price of gas goes up, then tires and gas are: • Substitutes • Complements • Both expensive • Both inexpensive

  12. If the demand for tires goes down when the price of gas goes up, then tires and gas are: • Complements

  13. In the market for tacos, you observe that the equilibrium price and quantity have increased. This can be caused only by: • An increase in the price of beef • An increase in the wages of taco shop workers • Fewer tacos shop • Increase in the income of people who eat tacos

  14. In the market for tacos, you observe that the equilibrium price and quantity have increased. This can be caused only by: • Increase in the income of people who eat tacos

  15. The market for corn is in equilibrium. Which of the following is most likely to increase the equilibrium PRICE of corn? • A bountiful harvest • Increasing production of corn-based ethanol • Decreasing household incomes and corn is a normal good • A subsidy given by the government to growers of corn

  16. The market for corn is in equilibrium. Which of the following is most likely to increase the equilibrium PRICE of corn? • Increasing production of corn-based ethanol

  17. Which of the following would result in a movement along the demand curve? • A change in preferences • An increase in the number of buyers • An increase in the number of suppliers • A decrease in income

  18. Which of the following would result in a movement along the demand curve? • An increase in the number of suppliers

  19. Which situation would most likely cause a decrease in consumer surplus in the toy market? • The cost of shipping increases because of higher oil prices • Consumer income increases • There is an unexpected baby boom • A new assembly line design increases worker productivity

  20. Which situation would most likely cause a decrease in consumer surplus in the toy market? • The cost of shipping increases because of higher oil prices

  21. Which of the following is true if there is a decrease in demand for cupcakes? • Increase in producer surplus • Increase in consumer surplus • Increase in total surplus • Decrease in producer surplus

  22. Which of the following is true if there is a decrease in demand for cupcakes? • Decrease in producer surplus

  23. Egg producers know that the elasticity of demand for eggs is 0.1. If they want to increase sales by 5%, they will have to lower price by: • 0.1% • 1% • 5% • 50%

  24. Egg producers know that the elasticity of demand for eggs is 0.1. If they want to increase sales by 5%, they will have to lower price by: • 50%

  25. Each month, Jessica buys exactly 15 Big Macs regardless of the price. Jessica’s price elasticity of demand is: • 0 • 1 • Greater than 1 • Less than 1, but great than 0

  26. Each month, Jessica buys exactly 15 Big Macs regardless of the price. Jessica’s price elasticity of demand is: • 0

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