Problem Set 1

1. The table below contains typical economic data. It show the quantity of a good that is demanded by purchasers and the quantity supplied by producers at various prices.

At which price are quantities demanded and quantities supplied the same?

$100

$80 

$40

$0

1. At which price is quantity supplied equal to 10?

$100

$80

$40 

$0

1. Refer to the table in question 1.

At which price is the quantity demanded less than the quantity supplied?

$100 

$80

$40

$0

1. Questions 4 through 6 refer to the graph below, which depicts typical economic information about the amount of a product demanded at various prices.

At what price is quantity equal to 1400?

$0

$40

$50

$100

1. Refer to the graph in question 4. At what price is quantity equal to zero?

$0

$50

$80

$100

1. Refer to the graph in question 4. Which of the following represents the equation of the line?

Price = (-3/140) (Quantity) + 80

Price = (3/140) (Quantity) + 80

Price = (800) (Quantity) + 2000

Price = (800) (Quantity) – 2000

1. Which of the following best describes the concept of scarcity?

Resources are unlimited but there is a scarcity of uses for them.

Resources are scarce when compared to the demand for them.

There is a scarcity of funding for resource conservation.

Resources and resource needs are equally scarce.

1. Which of the following would not be considered scarce?

Corn husks used to produce bio-mass fuel.

Corn husks in a landfill.

Corn husks used to feed hogs.

None of the above would be considered scarce.

1. Which of the following best describes opportunity cost?

The value of the alternative selected.

The value of all alternatives not selected.

The difference between the alternative selected and the next best alternative.

The value of the next best alternative not selected.

1. Which of the following best describes the opportunity cost of one year of college?

The dollar value of tuition, books, room and board, and all associated explicit expenses, but not the interest that could have been earned on that sum.

The dollar value of tuition, books, room and board, all associated explicit expenses, and the interest that could have been earned on that sum but not the income that could have been earned over that time period.

The dollar value of tuition, books, room and board, all associated explicit expenses, the interest that could have been earned on that sum, and income that could have been earned over that time period, but not the cost of everyday items such as food, clothing, and toothpaste.

The dollar value of tuition, books, room and board, all associated explicit expenses, the interest that could have been earned on that sum, and income that could have been earned over that time period, and the cost of everyday items such as food, clothing, and toothpaste.

1. Which of the following can be a valid goal for a typical firm? (Check all that apply.)

Maximizing profits.

Improving its public image.

Increasing employee morale.

Increasing shareholder wealth.