Microeconomics Ch 1-4 Review

0.0(0) Reviews
Report Flashcard set
Export flashcards





Spaced Repetition

spaced repetition

Practice Test

120 Terms
😃 Not studied yet (120)
12 tons of corn and 11 tons of fish

Argentina: 18 corn and 12 fish, half is 9 corn and 6 fish
Peru: 6 corn and 10 fish, half is 3 corn and 5 fish
Corn: 9+3= 12 corn
Fish: 6+5= 11 fish
14 lbs of coffee and 9 lbs of soy beans

Chile: 16 lbs coffee and 12 lbs soybeans, half is 8 lbs coffee and 6 lbs soybeans
Colombia: 12 lbs coffee and 6 lbs soybeans, half is 6 lbs coffee and 3 lbs soybeans
Coffee: 8+6= 14 coffee
Soybeans: 6+3= 9 soybeans
10/3 toothbrushes and Portugal’s opportunity cost of one hairbrush is 6/5 toothbrushes.

Zimbabwe: 10 hairbrush/3 toothbrush = 10/3 toothbrushes
Portugal: 6 hairbrush/5 toothbrush = 6/5 toothbrushes
25 bolts and 70 nails

Uzbekistan: 30 bolts and 60 nails, half is 15 bolts and 30 nails
Azerbaijan: 20 bolts and 80 nails, half is 10 bolts and 40 nails
Bolts: 15+10= 25 bolts
Nails: 30+40= 70 nails
1.25 lbs of ham

400 lbs ham/320 lbs cheese = 400/320 = 1.25 lbs ham
5/6 lb of beef

Brad: 10 bushel wheat/12 lbs beef = 10/12 = 5/6 lb beef
400 pitchers per day
neither good and Jordan has an absolute advantage in the production of novels.
14 bushels of wheat and 27 yards of cloth.
4/3 tacos and Dina’s opportunity cost of one burrito is 2 tacos.

Arturo: 400 tacos/300 burritos = 400/300 = 4/3
Dina: 400 tacos/200 burritos = 400/200 = 2
24 bushels of wheat and 64 lbs of beef

480 min/2 products = 240 min/product
Andrea's wheat: 240/30 = 8 wheat
Paul's wheat: 240/15 = 16 wheat
Andrea's beef: 240/15 = 16 lbs of beef
Paul's beef: 240/5 = 48 lbs of beef
8+16= 24 bushels of wheat
16+48= 64 lbs of beef

Since the PPF is a straight, constant line, to find ?, you find the slope, (600-200)/(8-16) = 400/-8 = 50. Then find the space b/w a point and the ?, so 8 and 12, 12-8=4. To find the point multiply 4*50=200, and 600, which is from (8,600), 600-200=400
radios and Norway has an absolute advantage in the production of coolers.

Since Jamaica makes more radios compared to Norway and Norway makes more coolers compared to Jamaica.
Alice produces 200 pitchers of lemonade and 100 pizzas, while Betty produces 180 pitchers of lemonade and 180 pizzas.
In the US 1 million gallons of wine costs 2 million pounds of cheese and in France 1 million gallons of wine costs 1/2 million pounds of cheese.
neither good and Theresa has an absolute advantage in the production of both goods.

This schedule is showing how long it takes to make the products not how many products are being made, since it take Theresa less time, she can make more.
burritos and a comparative advantage in the production of burritos
3 poems

12 poems/4 novels = 12/4 = 3 poems
1/6 novel
6/5 bushels of wheat

Brad: 12 lbs beef/10 bushels wheat = 12/10 = 6/5 bushels of wheat
poems and Jordan has a comparative advantage in the production of novels.
a decrease in the price of cotton

because the quantity demanded at $20 is 500, but the quantity supplied is 300
surplus of 25 units would exist, and price would tend to fall

because at $30 the quantity supplied is 500 but the quantity demanded is 300, so 500-300=200 surplus
shortage of 400 units

because at $15 the quantity supplied is 400 units smaller than the quantity demanded which is 600 units
2 units

At $12 Phil buys 0 units, and Miss Kay buys 2, so 0+2=2 units in total
people are willing to buy less of Good X than before at each possible price
shortage of 25 units would exist, and price would tend to rise

because the quantity supplied is 25 units less than the quantity demanded
$6 and 30 units

For the curve to be at equilibrium the quantity supplied and quantity demanded have to equal each other
6 units

Producer A supplied 2 units and Producer B supplied 4 units, 2+4= 6 units
80 dryers and 0 washers
60 dryers and 50 washers
it does not have the resources and technology to produce that level of output
There is a widespread unemployment in the economy
increase in quantity demanded
decrease in price
demand for the good conforms to the law of demand

Since Grover bought more of the product as the price went up, from $0 to $0.50, he was not following the law of demand
31 units

At $1: 14+10+2+5= 31
decreases 7 units

At $1: 14+10+2+5= 31
At $1.50: 12+8+0+4= 24
31-24= 7
improvement in production technology.
Alpha would be producing 125 units of peanuts and 75 units of popcorn
Omega would be producing 50 units of peanuts and 150 units of popcorn
The total world production would be 175 units of peanuts, and 225 units of popcorn

Peanuts: 125+50= 175 units
Popcorn: 75+150=225 units
The total world production would be 250 units of peanuts and 300 units of popcorn
Alpha would produce 250 units of peanuts and would trade 100 of those to Omega, so Alpha would keep 150 units. Alpha would receive 100 units of popcorn from Omega.
Omega would produce 300 units of popcorn and would trade 100 of those to Alpha, so Omega would keep 200 units of popcorn. Omega would receive 100 units of popcorn from Alpha.
1) Draw a separate graph for both wild salmon and farmed salmon before the phenomenon (aka a normal supply and demand curve). Mark equilibrium price.
2) Think about which side of the market it will affect. A change in input price in farmed salmon affects supply, so supply curve shifts left. Mark new equilibrium price.
3) We can see that with the change in input price the price moves up and demand moves down. The equilibrium quantity has decreased and equilibrium price has increased.
4) Since they are wild and farmed salmon are substitutes, when farmed salmon demand goes down, wild salmon demand goes up.
Solution: So if there is an increase in input cost of farmed salmon production, then farmed salmon supply moves left and equilibrium quantity decreases and wild salmon equilibrium quantity increases.