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test1aa - Introduction to Microeconomics Section 4 Exam No...

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Introduction to Microeconomics Section 4 Exam No. 1 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, a. the supply curve for physicals shifts to the left. b. the number of physicals performed stays the same. c. the quantity demanded of physicals increases and the quantity supplied of physicals decreases. d. the demand curve for physicals shifts to the right. Table 3-4 Assume that the farmer and the rancher can switch between producing meat and producing potatoes at a constant rate. Labor Hours Needed to Make 1 Pound of Pounds Produced in 40 Hours Meat Potatoes Meat Potatoes Farmer 10 2 4 20 Rancher 4 8 10 5 ____ 2. Refer to Table 3-4. The farmer should specialize in the production of ____ 3. The invisible hand refers to a. how the decisions of households and firms lead to desirable market outcomes. b. the control that large firms have over the economy. c. government regulations without which the economy would be less efficient. d. how central planners made economic decisions. ____ 4. Russell spends an hour studying instead of playing tennis. The opportunity cost to him of studying is ____ 5. You lose your job and, as a result, you buy fewer romance novels. This shows that you consider romance novels to be a(n) Figure 4-14
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Panel (a) Panel (b) D D' S Pe' Pe Qe Qe' quantity price D' D S Pe Pe' Qe' Qe quantity price Panel (c) Panel (d) D S' S Pe' Pe Qe Qe' quantity price D S S' Pe Pe' Qe' Qe quantity price ____
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