Microeconomics 1

Suppose the price elasticity of supply for a product is zero. This means that:

Tony is a wheat farmer, but he spends part of his day teaching guitar lessons. He has more students requesting lessons than he has time to teach and still maintain his farm. Tony charges $25/hr for guitar lessons. One spring day he spends 10 hours in his field planting $130 worth of seeds, which he expects will produce #300 worth of wheat. What will Tony's economic profit equal?

http://www.csun.edu/bus302/Lab/SampleExams/microsample1_files/i0040000.jpg

Refer to the figure above. At a price of $9, the dollar value of consumer surplus is :

Which of the following most resembles a perfectly competitive market?

If supply and demand both shift to the right at the same time, what can we say about equilibrium price and quantity?

Following the events of 9/11, the airlines have been forced to increase security at a cost of $800 million per year. The number of inspectors and machines does not vary with the number of passengers -- the airlines must have sufficient staff to handle the full-capacity load. These security expenditures will

Suppose it is discovered that drinking cranberry juice prevents the common cold. What effect do you predict this discovery will have on the price and quantity of cranberry juice sold, other things equal?

ther things remaining the same, as Japanese imports from the U.S. increase, the quantity of

Perfume (Bottles) Cloth (yards)
Nancy 20 15
Roger 24 12

The table above shows how much each of two people can produce in 40 hours. (For example, Nancy can produce 20 bottles of perfume in 40 hours.) For Nancy, what is the opportunity cost of producing 1 bottle of perfume?

Quantity TC MC
75 5000
X
80 5100

The table above shows a firm's total cost and marginal cost for a range of output. What is X equal to?

Four consumers, A, B, C, and D, are each willing to pay $9, $8, $7, and $6, respectively, to buy one unit of some good. Four producers, E, F, G, and H, are each able to produce one unit of that good at a cost of $3, $4, $5, and $6, respectively. At a price of $6, what is the combined total of consumer surplus and producer surplus in this market?

Q (in Units) AFC(Dollars) AVC(Dollars) MC(in dollars)
0
2 2.5 18 10
4 1.25 14 14
6 0.83 18 42
8 0.63 30 94
10 0.50 50 170

The table above shows the cost schedules of a perfectly competitive firm. If the market price of output is $50, the firm will produce _____ units and earn a profit of _____ .
(Hint: ATC = AFC + AVC.)

Suppose the world’s iron mines are running out of ore, and new sources of iron are not being discovered. In a market system, the users of iron (such as auto manufacturers who buy steel) will

Suppose the graphs above show the airline market. A general strike by American Airline pilots will probably cause changes in the market. Which panel shows these changes?

Jane spends an hour studying instead of working at her part time job which pays $5/hour. The opportunity cost to her of studying is

A lighthouse is typically considered a good example of a public good because