Week 05, Day 3 - Quiz 1

Week 05, Day 3 - Quiz 1 - QUIZ #1 This Quiz covers topics...

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QUIZ #1 This Quiz covers topics from chapters 1 - 3 and 6 - 8. Choose the correct answer (one choice) for each of the following questions. 1. A firm has a total of 5 workers. Each worker can produce either widgets or gadgets. The following table shows how many widgets and gadgets can be produced with various quantities of workers. For example, 3 workers together can produce a total of 24 widgets. What is the opportunity cost of producing the first 35 units of gadgets? Number of Workers Widget Production Number of Workers Gadget Production 0 0 0 0 1 10 1 35 2 18 2 60 3 24 3 85 4 28 4 95 5 30 5 100 a) 0 widgets e) 8 widgets i) 28 widgets b) 2 widgets f) 10 widgets j) 95 gadgets c) 4 widgets g) 18 widgets k) 100 gadgets d) 5 gadgets h) 24 widgets 2. Which of the following could explain why the equilibrium price decreases and the equilibrium quantity increases in a market? a) an increase in demand that is greater than a decrease in supply b) a decrease in demand that is greater than an increase in supply c) an increase in demand that is less than an increase in supply d) a decrease in demand that is less than a decrease in supply 3. If a surplus exists in a market, the market adjusts through a) an increase in price, which in turn causes a decrease in supply. b) an increase in price, which in turn causes an increase in demand. c) an increase in price, which in turn causes an increase in quantity supplied. d) an increase in price, which in turn causes a decrease in quantity demanded. e) a decrease in price, which in turn causes a decrease in supply. f) a decrease in price, which in turn causes a decrease in demand. g) a decrease in price, which in turn causes a decrease in quantity supplied. h) a decrease in price, which in turn causes a decrease in quantity demanded. 4. Widgets are inputs for gadgets. If the price of widgets increases, the equilibrium price of gadgets will ________ and the equilibrium quantity of gadgets will ________. a) increase, increase c) decrease, increase b) increase, decrease d) decrease, decrease Answer questions 5 - 8 using the following information. Suppose Canada and Mexico have linear production possibility frontiers and the same amounts of resources. Canada can produce at maximum 500 widgets or 300 gadgets.
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This note was uploaded on 10/13/2009 for the course ECON 1221 taught by Professor Whitaker during the Winter '09 term at Langara.

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Week 05, Day 3 - Quiz 1 - QUIZ #1 This Quiz covers topics...

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