ECON 002  Principles of Microeconomics

I. Multiple choice
(1)b. (2)c. (3)d. (4)c. (5)b. (6)b. (7)a. (8)c. (9)b. (10)b. (11)c. (12)c. (13)c. (14)d. (15)b. (16)a. (17)b. (18)a. (19)c. (20)b. (21)c. (22)a. (23)d. (24)b. (25)d. (26)c. (27)c. (28)b. (29)b. (30)b. (31)d. (32)b. (33)c.
[Multiplechoice question (3) reads: "Aaron buys a ticket to a football game for $50. When he arrives at the stadium, he discovers that scalpers are willing to pay $150 for his ticket. His opportunity cost of attending the game is now..."
To answer this question, imagine that Aaron initially has, say, $1000 in his bank account. He buys a ticket for $50, reducing his bank balance to $950. If he attends the game, his bank balance stays at $950. If he accepts the scalper's offer, his bank balance grows by $150 to $1100. So Aaron can either attend the game and have a bank balance of $950, OR skip the game and have a bank balance of $1100. So his opportunity cost of attending the game is the difference, $150.]
II. Problems
(1) [Percent change, midpoint formula: 2 pts] ΔP = $2 and midpoint P = $10, so percent change is $2/$10 = 20 percent.
(2) [Percent change of product: 4 pts]
(3) [Production functions: 7 pts]
(4) [Comparative advantage, gains from trade: 17 pts]
(5) [Shifts in demand and supply: 15 pts] Full credit requires accurate graphs.
(6) [Consumer surplus, producer surplus: 22 pts]
I. Multiple choice
(1)c. (2)e. (3)c. (4)b. (5)c. (6)a. (7)b. (8)b. (9)a. (10)e. (11)d. (12)b. (13)b. (14)a. (15)c. (16)b. (17)a. (18)b. (19)d. (20)c. (21)d. (22)b. (23)d. (24)b. (25)d. (26)d. (27)d. (28)c. (29)b. (30)c. (31)c. (32)b. (33)d.
[Multiplechoice question (3) reads: "Briana buys a ticket to a concert for $20. When she arrives at the venue, she discovers that scalpers are willing to pay $80 for her ticket. Her opportunity cost of attending the concert is now..."
To answer this question, imagine that Briana initially has, say, $1000 in her bank account. She buys a ticket for $20, reducing her bank balance to $980. If she attends the concert, her bank balance stays at $980. If she accepts the scalper's offer, her bank balance grows by $80 to $1060. So Briana can either attend the concert and have a bank balance of $980, OR skip the concert and have a bank balance of $1060. So her opportunity cost of attending the concert is the difference, $80.]
II. Problems
(1) [Percent change, midpoint formula: 2 pts] ΔP = $1 and midpoint P = $2.50, so percent change is $1/$2.50 = 40 percent.
(2) [Percent change of product: 4 pts]
(3) [Production functions: 7 pts]
(4) [Comparative advantage, gains from trade: 17 pts]
(5) [Shifts in demand and supply: 15 pts] Full credit requires accurate graphs.
(6) [Consumer surplus, producer surplus: 22 pts]
I. Multiple choice
(1)c. (2)e. (3)c. (4)a. (5)d. (6)b. (7)c. (8)d. (9)b. (10)d. (11)a. (12)a. (13)a. (14)b. (15)a. (16)b. (17)a. (18)a. (19)a. (20)d. (21)a. (22)c. (23)b. (24)c. (25)d. (26)a. (27)d. (28)d. (29)b. (30)a. (31)c. (32)e. (33)a.
[Multiplechoice question (3) reads: "Carl buys a ticket to a baseball game for $30. When he arrives at the ball park, he discovers that scalpers are willing to pay $70 for his ticket. His opportunity cost of attending the game is now..."
To answer this question, imagine that Carl initially has, say, $1000 in his bank account. He buys a ticket for $30, reducing his bank balance to $970. If he attends the game, his bank balance stays at $970. If he accepts the scalper's offer, his bank balance grows by $70 to $1040. So Carl can either attend the game and have a bank balance of $970, OR skip the game and have a bank balance of $1040. So his opportunity cost of attending the game is the difference, $70.]
II. Problems
(1) [Percent change, midpoint formula: 2 pts] ΔP = $2 and midpoint P = $4, so percent change is $2/$4 = 50 percent.
(2) [Percent change of product: 4 pts]
(3) [Production functions: 7 pts]
(4) [Comparative advantage, gains from trade: 17 pts]
(5) [Shifts in demand and supply: 15 pts] Full credit requires accurate graphs.
(6) [Consumer surplus, producer surplus: 22 pts]
[end of answer key]