Review of PT Exam

Almond Pest Destroys 50 Percent of Crop Prices Expected to Double

For a consumer who loves almonds but has a limited budget, what is this new headline likely to trigger?

• supply shock leading to higher consumption of almonds

• income effect leading to lower demand for several goods

• law of demand leading to lower prices for all goods

• market equilibrium leading to stable prices for almonds

Study the demand curves on the graphs. If the price of a slice of pizza decreased from $4.00 to $2.00, how would that change the number of slices of pizza demanded each day by the market?

• The demand would increase by 2 slices per day

• The demand would decrease by 2 slices per day

• The demand would increase by 100 slices per day

• The demand would decrease by 100 slices per day

Ashley started taking classes at a local community college and had to switch her job from full time to part time, so she makes less money. How would this development likely affect the graphs below?

• The market demand curve would shift to the right

• The market demand would move up the demand curve

• Her individual demand curve would extend downward

• Her individual demand curve would shift to the left

Which of the following goods would be considered a complement to flashlights in the context of a demand for goods?

• batteries

• candles

• floodlights

• binoculars

Which of the following price / output pairs would appear on the supply schedule used to create the individual supply curve below?

• $1.00/100

• $5.00 / 250

• $3.00 / 2,000

• $5.00 / 350

According to this table, which of the following explains why the owner of the beanbag factory would be willing to accept an increase in variable cost from $63 per hour to $82 per hour?

• The increase will result in a significant drop in fixed cost

• The increase will allow the owner to decrease marginal cost

• The increase will make possible an increase in the factory’s profit

• The increase will equalize marginal cost and marginal revenue

What is the marginal product of labor that results from hiring the seventh worker?

• one beanbag per hour

• three beanbags per hour

• five beanbags per hour

• seven beanbags per hour

Which of the following is an example of how a firm can resolve the problem of diminishing marginal returns of labor?

• by hiring one additional worker

• by hiring several additional workers

• by decreasing its marginal returns

• by increasing its physical capital

Suppose a new commercial development is built, leading to the opening of several new fast-food restaurants in a market. Which of the following is the likely result of such a development?

• The supply curve shifts to the left

• The supply curve shifts to the right

• The price of the good increases

• The supply of the good decreases

This photo shows a factory with scrubbers that the government requires to clean power-plant emissions. This photo represents government activity that is likely to___.

• increase supply by increasing efficiency

• decrease supply by increasing transportation cost

• increase supply by increasing subsidy costs

• decrease supply by increasing cost of production