Microeconomics Mc Question

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1. Suppose your college institutes a new policy requiring you to pay for a permit to park your car in a campus parking lot.
a. The cost of the parking permit is not part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
b. The cost of the parking permit is part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
c. Only half of the cost of the parking permit is part of the opportunity cost of attending college.
d. The cost of the parking permit is not part of the opportunity cost of attending college under any circumstances.
2. Tom is restoring a car and has already spent $3500 on the restoration. He expects to be able to sell the car for $5000. Tom discovers that he needs to do an additional $2000 of work to make the table worth $5000 to potential buyers. He could also sell the car now, without completing the additional work, for $2800. What should he do? a. He should sell the car now for $2800.

b. He should keep the car since it wouldn’t be rational to spend $5500 restoring a car and then sell it for only $5000.
c. He should complete the additional work and sell the car for $5000. d. It does not matter which action he takes since the outcome will be the same either way.
3. An increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events,
a. the demand for tires decreases and the supply of tires increases. b. the demand for tires is unaffected and the supply of tires decreases. c. the demand for tires is unaffected and the supply of tires increases. d. None of the above is necessarily correct.

4. Which of the following might cause the supply curve for an inferior good to shift to the right?
a. An increase in input prices.
b. A decrease in consumer income.
c. An improvement in production technology that makes production of the good more profitable.
d. A decrease in the number of sellers in the market.
Table 1
The demand schedule below pertains to sandwiches demanded per week. Price

$3
$5

Charlie’s
Quantity
Demanded
3
1

Maxine’s
Quantity
Demanded
4
2

Quinn’s
Quantity
Demanded
3
x

5. Refer to Table 1. Regarding Charlie and Maxine, whose demand for sandwiches conforms to the law of demand?
a. only Charlie’s
b. only Maxine’s
c. both Charlie’s and Maxine’s
d. neither Charlie’s nor Maxine’s
6. Refer to Table 1. Regarding Charlie and Maxine, for whom are sandwiches a normal good?

a.
b.
c.
d.

only for Charlie
only for Maxine
for Charlie and for Maxine
This cannot be determined from the given information.

7. Refer to Table 1. Suppose x = 1. Then it must be true that a. Charlie and Quinn have the same income, which is lower than Maxine’s income. b. if sandwiches and potato chips are complements for Charlie, then those two goods are also complements for Quinn.

c. Charlie’s demand curve is identical to Quinn’s demand curve. d. All of the above are correct.
8. Refer to Table 1. Suppose x = 1. Then the slope of the market demand curve is a. -3.
b. -1/3.
c. 1/3.
d. 3.
9. Refer to Table 1. Suppose Charlie, Maxine, and Quinn are the only demanders of sandwiches. Also suppose x = 2. Then
a. the slope of Quinn’s demand curve is -1/2 and the slope of the market demand curve is -5/2.
b. the slope of Quinn’s demand curve is -1/2 and the slope of the market demand curve is -2/5.
c. the slope of Quinn’s demand curve is -2 and the slope of the market demand curve is -5/2.
d. the slope of Quinn’s demand curve is -2 and the slope of the market demand curve is -2/5.
10. Refer to Table 1. Suppose Charlie, Maxine, and Quinn are the only demanders of sandwiches and that the market demand violates the law of demand. Then, in the table, a. x 5.
b. x 5.
c. x 7.
d. x 10.
11. Refer to Table 1. Suppose Charlie, Maxine, and Quinn are the only demanders of sandwiches. Also suppose the following:
• x=2
• the current price of a...
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