Microecon Exam 1 Review

What must be given up to obtain an item is called

• absolute value

• out-of-pocket cost

• opportunity cost

• comparative worth

If the production possibilities frontier shown is for 24 hours of production, then how long does it take Argentina to make 1 pound of cashews?

• 2/25 hour

• 12.5 hours

• 5/12 hour

• 2.8 hours

Absolute advantage is found by comparing different producers'

• locational and logistical circumstances

• payments to land, labor, and capital

• opportunity cost

• input requirements per unit of output

Which of the following is not a characteristic of a perfectly competitive market?

• sellers must accept the price the market determines

• different sellers sell identical products

• there are many sellers

• there is no free entry or exit

A movement for point B to point A on the graph shows

• an increase in demand

• a decrease in demand

• an increase in quantity demanded

• a decrease in quantity demanded

If Dr. Pepper and Coke are substitutes of each other, a lower price in Dr. pepper would

• cause a decrease in the demand for Coke

• cause an increase in the demand for Coke

• cause an increase in the demand for Dr. Pepper

• cause a decrease in the demand for Dr. Pepper

All else equal, a decrease in the price of pulp used in the production process for paper would cause a move from

• y to x

• x to y

• Sa to Sb

• Sb to Sa

At a price of $30

• there is a surplus of 200 units

• there is a surplus of 300 units

• there is a surplus of 500 units

• there is a shortage of 200 units

Weather forecasters predict this summer will be much hotter than usual. What will probably happen to the demand for air conditioners?

• 
• 
• 
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Which of the following items is Inelastic?

• Potato Chips

• Celsius Energy Drink

• Insulin

• Levi Jeans