University Microeconomics Homework: Multiple Choice Question Solutions

This document presents the solutions to a microeconomics homework assignment. The assignment comprises 60 multiple-choice questions covering various core concepts in microeconomics, including supply and demand, production possibilities, comparative advantage, market structures, and consu...Read More

Running head: MICROECONOMICS
Microeconomics
Name of the Student:
Name of the University:
Author note:

1MICROECONOMICS
Answer 1. a. The price of water rose in Calgary by 2% last year.
Answer 2. c. He should complete the repairs and sell the Hummer.
Answer 3. a. alter behaviours
Answer 4. b. Government policies do not affect the decisions of firms and households.
Answer 5. a. There is still the ability to achieve desirable economic well-being for
society as a whole.
Answer 6. c. property rights
Answer 7. c. to promote equity
Answer 8. d. John buys a tractor to mow his newly purchased 5-acre lot.
Answer 9. d. It will emit too much smoke.
Answer 10. d. market prices.
Answer 11. b. They may make different assumptions for the long run and the short run.
Answer 12. a. arrow A
Answer 13. d. Econoland experienced a high level of emigration out of the country.
Answer 14. b. The nation is not using all available resources or has inefficiencies.
Answer 15. d. zero, since the economy has the additional resources to produce 10
additional toasters
Answer 16. b. economic growth

2MICROECONOMICS
Answer 17. c. the difference between the 8 bathtubs you get and the 20 barrels you give
up
Answer 18. b. how individual households and firms make decisions
Answer 19. c. The more coffee a person drinks per day, the longer he can go without
sleep.
Answer 20. c. They do so because they get something in return.
Answer 21. d. 4/5 kg of potatoes.
Answer 22. d. 3 bushels of wheat and 3 bushels of corn.
Answer 23. a. Ben has an absolute advantage in cones and Jerry has a comparative
advantage in ice cream.
Answer 24. c. 4 dresses.
Answer 25. d. 8 ballet slippers and 10 tap shoes.
Answer 26. b. Some individuals in each country will be hurt.
Answer 27. d. some countries to gain political control over trading partners.
Answer 28. b. Because each person spends more time producing that product for which
they have a comparative advantage.
Answer 29. a. 1/5 table for Mike and 1/3 table for Sandy.
Answer 30. d. 1/4 bread.

3MICROECONOMICS
Answer 31. c. Cheese
Answer 32. b. 300 televisions and 100 radios in Teeveeland and 300 radios and 100
televisions in Radioland.
Answer 33. d. because no one has market power
Answer 34. a. When price rises, quantity demanded falls.
Answer 35. d. Price is on the vertical axis and quantity is on the horizontal axis.
Answer 36. b. It is a horizontal summation of individual demand curves.
Answer 37. a. the market demand curve
Answer 38. a. complementary goods
Answer 39. d. increases the quantity demanded of the other good.
Answer 40. d. increases the quantity demanded of the other good.
Answer 41. d. shifts left today
Answer 42. b. by increasing your current demand for DVDs.
Answer 43. c. an increase the demand for education
Answer 44. b. People are less willing to buy the product at any price than before.
Answer 45. a. Cigarette companies are successful in passing much of the tax on to
consumers.
Answer 46. b. an increase in the price of the good

4MICROECONOMICS
Answer 47. d. A shortage of 50 units would exist and the price would tend to rise.
Answer 48. b. 500
Answer 49. a. The actual price is below equilibrium price and quantity demanded is
greater than quantity supplied.
Answer 50. c. comparing the old equilibrium and the new equilibrium
Answer 51. c. graph C
Answer 52. b. graph B
Answer 53. b. equilibrium price to decrease and equilibrium quantity to increase
Answer 54. a. equilibrium price to increase and equilibrium quantity to decrease
Answer 55. a. The equilibrium price would increase, but the impact on the amount sold
in the market would be ambiguous.
Answer 56. b. price will rise and the effect on quantity is ambiguous
Answer 57. a. Consumers have experienced an increase in income and beef-production
technology has improved.
Answer 58. a. a shortage of 25
Answer 59. a. a shortage of 20
Answer 60. a. a shortage of 20