economics data bank
Identify the choice that best completes the statement or answers the question.
____ 21. Kelly and David are both capable of repairing cars and cooking meals. Which of the following scenarios is notpossible?
a. Kelly has a comparative advantage in repairing cars and David has a comparative advantage in
b. Kelly has an absolute advantage in repairing cars and David has an absolute advantage in cooking
c. Kelly has a comparative advantage in repairing cars and in cooking meals.
d. David has an absolute advantage in repairing cars and in cooking meals.
____ 22. If Shawn can produce donuts at a lower opportunity cost than Sue, then
a. Shawn has a comparative advantage in the production of donuts.
b. Sue has a comparative advantage in the production of donuts.
c. Shawn should not produce donuts.
d. Shawn is capable of producing more donuts than Sue in a given amount of time.
____ 23. If a seller in a competitive market chooses to charge more than the going price, then
a. the sellers’ profits definitely would increase.
b. the owners of the raw materials used in production would raise the prices for the raw materials.
c. other sellers would also raise their prices.
d. buyers will make purchases from other sellers.
____ 24. If the price elasticity of demand for a good is 0.8, then which of the following events is consistent with a 4 percent
decrease in the quantity of the good demanded?
a. a 0.2 percent increase in the price of the good c. a 4.8 percent increase in the price of the good
b. a 3.2 percent increase in the price of the good d. a 5 percent increase in the price of the good
____ 25. Suppose that 500 candy bars are demanded at a particular price. If the price of candy bars rises from that price by 10 percent, the number of candy bars demanded falls to 480. Using the midpoint approach to calculate the price
elasticity of demand, it follows that the
a. demand for candy bars in this price range is unit elastic.
b. price increase will decrease the total revenue of candy bar sellers.
c. price elasticity of demand for candy bars in this price range is about 0.41.
d. price elasticity of demand for candy bars in this price range is about 0.24.
____ 26. Table 7-7
The only four producers in a market have the following cost:
Refer to Table 7-7.If the sellers bid against each other for the right to sell the good to a consumer, then the
producer surplus will be
a. $0 or slightly more. c. $150 or slightly less.
b. $50 or slightly less. d. $200 or slightly more.
____ 27. Refer to Table 7-7.If Charlie, Quinn, and Wrex sell the good, and the resulting producer surplus is $300, then the
price must have been
a. $200. c. $450.
b. $300. d. $600.
____ 28. Lois is a self-employed pet sitter. She can make 20 “housecalls” per day. She is considering hiring her sister Dora to work for her. Both she and Dora can visit 35 houses per day. What is Dora’s marginal product?
a. 55 c. 22.5
b. 35 d. 15
____ 29. On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product?
a. The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers.
b. The farmer is able to produce 5,800 bushels of wheat when he hires 4 workers.
c. The farmer is able to produce 6,000 bushels of wheat when he hires 4 workers.
d. Any of the above could be correct.
____ 30. Figure 18-4
This figure below shows the labor market for automobile workers. The curve labeled Sis the labor supply curve, and the curves labeled D1 and D2 are the labor demand curves. On the horizontal axis, Lrepresents the quantity of labor in the market.
Refer to Figure 18-4.Which of the following events would most likely explain a shift of the labor-demand curve from D2 back to D1?
a. The price of automobiles decreased.
b. A large number of immigrants entered the automobile-worker market.
c. A technological advance increased the marginal product of automobile workers.
d. An increase in the demand for automobiles.