Econ202 Midterm 1 Review

Assume that the market for french fries has only two suppliers. According to the table, if the price of french fries is $3, the market supply will be ______.

• 41

• 13

• 22

• 21

• 7

Consider a market in which the market demand is given by Q^d = 44 - 3P and the market supply is give by Q^s = 2P + 4. If the price in the market is $10, there is a _____ of _____ units.

• surplus, 10

• surplus, 20

• shortage, 8

• shortage, 10

• shortage, 20

The opportunity cost of increasing the production of investment from 21 to 24 is _____.

• 3 investment

• 4 consumption

• 5 consumption

• 21 investment

• 10 consumption

This consumer experiences diminishing marginal utility

• after the 1st taco is consumed.

• after she consumes her 5th taco.

• after she consumes her 6th taco.

• for the 5th and 6th tacos only.

• when she consumes the 8th taco.

The basic goal of economics is to

• control the effects of government action.

• determine how to distribute all that is produced in an economy.

• address the scarcity problem created because the desire for goods exceeds society's ability to produce them.

• match limited resources to people's limited wants and needs.

• control tastes and preferences so that there will be enough resources to produce all of the goods people want.

During the Covid-19 pandemic, there was an increase in the demand for toilet paper, leading to a shortage. This means that the quantity demanded of toilet paper was ____ than the quantity supplied and the price was ____ the equilibrium price.

• greater; above

• greater; below

• greater; equal to

• less; above

• less; below

What is an example of a direct negative incentive to buckle up when driving?

• antilock brakes and other technology that make a collision less likely

• the threat of a ticket if a police officer spots you not wearing a seatbelt

• the fact that in a collision, seatbelts cause bruising on the chest and hips

• the possibility that if your car catches fire, a seatbelt may slow your escape

• next-generation airbags that provide substantial protection even if you are unbelted

In a growing number of cities, stores are required either to charge a fee for plastic bags. If this fee can be refunded when someone recycles the bag, the refund acts as a(n) ____ incentive.

• direct

• indirect

• neutral

• complementary

• unintended

For her birthday, Jeri's parents want to treat her to a family day at a water park. If she agrees, what would be a plausible opportunity cost of that choice?

• not being able to go with her friends to see a movie

• the dollar cost of everyone's admission ticket to the park

• the risk that it will rain and the park will be closed

• the risk that she will argue with her siblings and not have a good time

• not being able to get to all the rides because of long lines

Which of the following is an example of a normative statement?

• The largest decrease in employment during the pandemic occurred in leisure and hospitality.

• In April 2020, New York reported more Covid-19 deaths than any other state.

• The government should have added more than $600 per week to the initial unemployment payments during the pandemic.

• The unemployment rate was 14.7% during the pandemic in April 2020.

• Congress passed the $2.2 trillion CARES Act on March 27, 2020.