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WorksheetsEcon Midterm 1
Total questions: 42
Worksheet time: 11hrs 30mins
Your statistics professor reports that only seven students took the midterm exam. She reports all seven scores: 41, 49, 41, 37, 48, 43, and 15
The median score is 41
The mean score is 39.14
HOW?
The median score is lower because the outlier pulls the median downward but does not impact the mean.
The mean score is lower because the outlier pulls the mean downward but does not impact the median.
The median score is lower because the median is always lower than the mean.
The mean score is lower because the mean is always lower than the median.
An article in a medical journal reports that among all patients admitted to the hospital with COVID-19, those who were put on a ventilator (a device that helps people breathe) are far more likely to end up dying relative to those who were merely given additional oxygen.
Does this show that ventilators are actually harmful?
No, this suggests correlation, not causation, since only the highest-risk patients were put on ventilators.
Yes, a strong correlation between two events, such as being on a ventilator and dying, proves there is causation.
No, there is no correlation between being on a ventilator and dying
Yes, this suggests causation, since being on a ventilator increased the likelihood of death.
Economics is all about making choices. The reason we have to choose one thing over another is:
Economic wants are limited
Economic agents are scarce
economic choices are unlimited
Economic resources are scarce
One of the largest costs of going to college is the opportunity cost of not having the income from a full-time job. Also, during an economic recession, people often find it difficult to find a full-time job.
Given these two facts, should the number of people who want to go to college increase or decrease during a recession?
Increase, since the opportunity cost of going to college will be smaller now since fewer jobs are available.
Decrease, since the opportunity cost of going to college will be smaller now since fewer jobs are available.
Decrease, since the opportunity cost of going to college will be higher now since fewer jobs are available.
There is no relationship between the availability of full-time jobs and college enrollment
A budget constraint represents ___________
any actions taken by government officials to limit the amount of government spending.
the total amount of income a family earns from all sources.
the bundles of goods or activities that a consumer can choose given her limited budget.
the maximum amount of spending the federal government is allowed to do by law.
Suppose you have a part-time job and earn $400 a month. Suppose you decide to spend your income buying new shoes and jeans. The chart below shows the possible combinations that could be purchased in a month. Assume jeans cost $50 each and shoes cost $100 each.
The table above shows that for a given budget if you increase the amount of one type of good that you buy, you must ____ the amount of the other good that you . Therefore, a budget constraint implies that the consumer faces ______
decrease, trade-offs
increase, trade-offs
Trade offs, Decrease
trade-offs , increase
The three principles of economics include optimization, equilibrium, and empiricism.
optimization describes a situation where people weight costs and benefits when making a decision
Equilibrium describes a situation where no one would benefit from changing his or her behavior
Empiricism describes a situation where economist use date to analyze what is happening in the world
How was the mean calculated from a series of observations?
The mean is the sum values of the observations divided by the number of observations.
It is calculated as the product of all the different items divided by the number of items.
It is calculated as the difference of all the different items divided by the number of items.
The mean is the median value of a set of observations.
Suppose 4,314 people bought popsicles on a hot summer day.
if the average number of popsicles that each person bought is 9, the number of popsicles sold that day is ___
38,826
479.3
300
478.3
How does microeconomics differ from macroeconomics?
Microeconomics is the study of how individuals and firms make choices, while macroeconomics is the study of all state and local government policies.
Microeconomics is the study of how individuals, households, firms, and governments make choices, while macroeconomics is the study of the economy as a whole.
Macroeconomics is the study of how individuals, households, firms, and governments make choices, while microeconomics is the study of the economy as a whole.
Macroeconomics is the study of how individuals and firms make choices, while microeconomics is the study of all state and local government policies
Which of the following is not an item studied under macroeconomics?
The money supply
Individual preferences
aggregate issues
Economic output
Suppose there are four products that Samuel can purchase. Samuel obtains a discount on each of the products. The total benefit obtained by Samuel through discounts is calculated by finding out the difference in the actual price of the product and the discounted price of the product. This is shown on the Y axis of the graph. The X axis of the graph represents the products which Samuel can purchase.
In this case, Samuel will purchase product ___ as an optimal product.
2
6
1
4
Alternatively, you have the option of working as many hours as you want, earning
$11
per hour. Assume this is the next best use of your time. Use the marginal principle to find your optimal number of hours to spend with your spouse per day. The optimal amount of time for you to spend with your spouse is _____ hours per day.
5
4
6
1
You have been invited to play a 4-hour round of golf that has a value to you of
$50.
The total price to play the round of golf is
$45.
The net benefit of the round of golf is $___.
Now assume that you have a job that pays you $8 per hour. Would you be optimizing to accept the invitation to play golf?
To optimize, you should ____ golf
5, not play
10, play
2, not play
3, play
Some people choose to live close to the city center; others choose to live away from the city center and take a longer commute to work every day.
Does this mean that those who stay away from the city center are being irrational?
No, because people face the same living costs in and away from the city.
No, because their opportunity cost of commuting must be lower.
Yes, because people have different preferences.
Yes, because people face direct and indirect commuting costs.
Advances in wireless communication technology are reducing the non-financial costs of long commutes; for example, people who ride trains can get work done, and people who drive cars have more entertainment options.
How will this affect people's willingness to pay for apartments near the city center?
People will be more willing to pay for these apartments since the opportunity cost of the commute time from outside the city is decreasing. This makes the more affordable housing outside the city less attractive to people.
People will be more willing to pay for these apartments since the opportunity cost of the commute time from outside the city is increasing. This makes the more affordable housing outside the city less attractive to people.
People will be less willing to pay for these apartments since the opportunity cost of the commute time from outside the city is decreasing. This makes the more affordable housing outside the city more attractive to people.
People will be less willing to pay for these apartments since the opportunity cost of the commute time from outside the city is increasing. This makes the more affordable housing outside the city more attractive to people.
What is the difference between marginal values and average values?
Marginal values show the total benefit or cost from consuming a good, while average values are the total benefit or cost from consuming a good divided by the amount of the good consumed.
Marginal values show the additional benefit or cost from consuming an additional unit of a good, while average values are the benefit or cost per unit of a good.
Marginal values show the ordinal benefit or cost from consuming an additional unit of a good, while average values are the cardinal benefit or cost from consuming an additional unit of a good.
Marginal values show the benefit or cost from consuming one unit of a good, while average values are the benefit or cost from consuming all units of a good.
If opportunity cost were to suddenly increase, total cost would
decrease and net benefit would increase.
increase and net benefit would decrease.
decrease and net benefit would decrease.
increase and net benefit would increase.
Which of the following statements regarding the principle of optimization is true?
It takes into account and evaluates multiple trade-offs.
It means always choosing the best feasible option.
It is the unifying principle that connects various seemingly unrelated decisions.
It applies only in the case of monetary and financial matters.
In which of the following situations is optimization a good description of behavior?
Tia is a very fun loving person. She chooses to go on a vacation with friends instead of volunteering at NGO as a vacation is more enjoyable.
John is careless and irresponsible causing him to make a lot of mistakes in his work.
Kat, the MIT business management graduate, starts his first business and incurs huge financial losses despite graduating from MIT.
Rita watches movies late at night. The next day, she wakes up late causing her to be late to her exam.
When John determines what choice of walking shoes will give him the best bang for his
buck,
he is using optimization based on
_________
.
When Janet looks at the additional value of purchasing a new laptop to the cost as compared to keeping her old one, she is using optimization based on
________
.
Total value, marginal analysis
total value, optimization
buyers preferences, marginal analysis
Which of the following would not be considered a market by an economist?
A dating website
Your corner gas station
An online auction site such as ebay
All of the above are examples of a market.
What is meant by holding all else equal and how is this concept used when discussing movements along the demand curve?
All variables that can affect the demand for the good are held constant.
everything else in the economy is held constant, including the price of the good.
All variables in the model are set to equal values.
All of the above.
We make the assumption of holding all else equal when considering demand curves since we want to focus on the changes in the quantity demanded that result from changes in
all of the variables
only the price of a good
the demand of a good
If the number of people over the age of 16 in the country significantly, then the demand for the Toyota Rav4 SUV would
Increase (shift right)
Remain unchanged
decrease (shift left)
If people expect the price of SUVs to decrease in the future, then the demand for the Toyota RAV4 SUV would ______
increase ( shift right)
Decrease(shift left)
Remain unchanged
Increase ( shift left)
Chloe's Demand Schedule
realize how to do
look at graph
dd
Holding all else equal, if the price of a digital camera rises, then we can expect
a decrease in the quantity demanded of digital camera
an increase in the demand for digital cameras
an increase in the quantity demanded of digital cameras.
a decrease in the demand for digital cameras.
What does it mean to say that we are running out of "cheap oil"?
That world demand for oil is declining , which will raise the price of oil in the future
That there are declining reserves of low-quality oil, but there is still plenty of high-quality oil remaining
That oil reserves are becoming more expensive to find and extract over time.
That we will soon deplete all the world's oil reserves, which will cause the price of oil to increase significantly
If oil reserves are becoming more expensive to find and extract over time , what does this imply for the future supply , and price, of oil?
The demand for oil will increase, which will lead to lower prices in the future.
The supply of oil will decrease, which will lead to higher prices in the future.
The demand for oil will decrease, which will lead to higher prices in the future.
The supply of oil will increase, which will lead to lower prices in the future.
If new irrigation technology improves the output per acre of hops farms, then the supply curve for beer would __________.
Remain unchanged
Increase(shift right)
decrease (shift left)
If an increase in the immigration of unskilled labor leads to a fall in the wages of workers on hops farms, then the supply curve for beer would __________.
Increase ( shift right)
Remain unchanged
Decrease( sift left)
The competitive equilibrium price equates
supply to demand
price to quantity demanded
price to quantity supplied
quantity supplied to quantity demanded.
How would
a rightward
shift in the
supply
curve affect the equilibrium price in a market?
The equilibrium price
increases.
The equilibrium price
decreases.
The equilibrium price would remain the same
More information is needed. It may increase, decrease, or remain the same.
How would the equilibrium price in a market be affected if there were a
large
rightward shift in the
supply
curve and a
small
rightward shift in the
demand
curve?
The equilibrium price decreases.
The equilibrium price would remain the same.
The equilibrium price
increases
More information is needed. It may increase, decrease, or remain the same.
How would the equilibrium price in a market be affected if there were a
large
leftward shift in the
supply
curve and a
small
leftward shift in the
demand
curve?
The equilibrium price
decreases.
The equilibrium price
increases.
The equilibrium price would remain the same
More information is needed. It may increase, decrease, or remain the same.
Helium is lighter than air and thus can be used to make party balloons float. Helium is also an inert gas that is vital for many industrial applications (such as medical imaging technology) that require achieving super low temperatures.
The relatively new industrial application has caused the demand for helium to ______.
This has resulted in _____ in the price of party balloons because helium is _____ for these balloons.
increase; an increase; an input
increase; a decrease; an input
decrease; a decrease; a substitute
decrease; an increase; a substitute
New York decides to reduce the consumption of sugary soda by imposing a minimum price of $2.50 per soda. The current equilibrium price is $1.50.
Using the double arrow line tool, show the difference between the quantity supplied and quantity demanded when the market price of soda is $2.50. Properly label this difference.
Look at graph realize top is surplus
Dont drag arrows out
Suppose the price of X is $70, the price of Y is $50, and a consumer has income of $700.
Using the line drawing tool, show the budget constraint for this consumer on the graph to the right.
Simple as the max amount you can buy with 700$/70 and 700/50
Straight line labeled BC
Suppose the price of X is
$70,
the price of Y is
$50,
and a consumer has income of
$700. The oppurtunity cost of buying one unit of good X is ____ unit(s) of good y.
1.4
0.238
0.236
1.45
Suppose the price of X is
$70,
the price of Y is
$50,
and a consumer has income of
$700. Which one of the following combinations of X and Y will be represented by a point on the consumer's budget constrain?
6 units of X and 6 units of Y
5 units of X and 7 units of Y
7 units of X and 5 units of Y
Which of the following are necessary ingredients to the buyer's problem? (Check all that apply.)
Consumer's ability to discern product usefulness.
Prices of goods and services.
Amount of money the consumer has to spend.
Employment status of the consumer.
Consumer's tastes and preferences.
