Microeconomics

Lydia can produce either 24 cookies or 8 cakes. The opportunity cost for Lydia to produce a cake is:

• 12 cookies
• 24 cookies
• 3 cookies

• 6 cookies

The game of musical chairs, where there is always one less chair than there are players in the game, best demonstrates which of the following?

• Scarcity of resources

• Strategy or planning
• Random chance or luck
• Cooperation or teamwork

Using the supply and demand schedule for coffee shown below, answer the following question.

Which of the following occurs at a price of $30?

• There is a shortage of 46 pounds.

• The quantity demanded increases.

• The quantity supplied decreases.

• There is a surplus of 6 pounds.

At the end of an episode of a television show, Susan realizes that there is only one more episode left in the series. She is excited to see the end and considers finishing the series that evening, but she decides to wait in order to get enough sleep and not be tired the next day.

Susan's decision making process provides an example of which economic concept?

• Supply and demand
• Sunk cost
• Inflation
• Cost-benefit analysis

According to the model of the circular flow of money, what form does money take when flowing from households to firms?

• Consumer expenditure

• Government transfers
• Financial assets
• Labor and capital

Price controls are most likely to be instituted in which of the following situations?

• In a highly competitive market with many options available.
• When a basic good such as wheat is affected by natural disaster to the point of scarcity

• When there is high demand and limited supply.
• During times of economic growth and stability.

In the fall of 2014, the price of oil fell sharply from an average of over $100 per barrel to less than $50 per barrel. Based on the principles of supply and demand, which of the following is most likely true?

• The demand for oil exceeded the supply
• The price of oil remained constant
• The price of oil increased sharply
• The price decline was caused by an overproduction of oil.

The Federal Reserve conducts all of the following operations except:

• oversight of private banking in the United States.

• issuing home loan guarantees.

• Issuing home loan guarantees.

• regulation of interest rates.

Which of the following best illustrates how economic incentives cause changes in an individual's behavior?

• A couple registers for wedding gifts before their wedding.

• 
  A firm increases output of a product because of increasing consumer demand.

• A firm modifies the way it measures productivity after changing its product line.

• An employee works fewer hours following an increase in pay.

The enactment of the Dodd-Frank Act following the 2008 financial crisis could best be seen as reflecting which of the following ideals?

• Deregulation and limited government intervention
• Increased risk-taking and speculation
• Free-market capitalism needs government regulation to ensure equity and fairness in the market.

• Weakening of consumer protection measures