Download 19) The concept of "rational behavior" suggests that: (a) Positive

19) The concept of "rational behavior" suggests that:
(a) Positive economics is more important than normative economics
(b) Normative economics is more important than positive economics
(c) Different people make different choices because their circumstances and information differ
(d) There is a logical fallacy of composition that affects microeconomic thinking but not
macroeconomic thinking
20) Which of the following is a positive statement?
(a) The humidity is too high today.
(b) It is too hot to jog today.
(c) The temperature is 92 degrees today.
(d) Summer evenings are nice when it cools off.
21) The production possibilities curve illustrates the basic principle that:
(a) the production of more of any one good will in time require smaller and smaller sacrifices of
other goods.
(b) an economy will automatically obtain full employment of its resources.
(c) if all the resources of an economy are in use, more of one good can be produced only if less
of another good is produced.
(d) an economy's capacity to produce increases in proportion to its population size.
22) You should decide to go to a movie:
(a) if the marginal cost of the movie exceeds its marginal benefit.
(b) if the marginal benefit of the movie exceeds its marginal cost.
(c) if your income will allow you to buy a ticket.
(d) because movies are enjoyable.
23)
Refer to the above graphs. Assume that pizza is measured in slices and beer in pints. In which of
the graphs is the opportunity cost of a pint of beer the lowest?
(a) graph A
(b) graph B
(c) graph C
(d) graph D
24) An increase in the price of a product will reduce the amount of it purchased because:
(a) supply curves are upward sloping.
(b) the higher price means that real incomes have risen.
(c) consumers will substitute other products for the one whose price has risen.
(d) consumers substitute relatively high-priced for relatively low-priced products.
25) Other things under control, “eating healthily” is popular now, people consume more of the
organic food or homemade food instead of “junk food”. At the same time, the input for
producing junk food is more expensive. Based upon the information offered above, do the
demand and supply analysis in “junk food” market.
a) Is there a change in demand? If there is, what’s the direction of the change? (You may
describe in words or illustrate graphically.)
b) Is there a change in supply? If there is, what’s the direction of the change? (You may describe
in words or illustrate graphically.)
c) Can you judge how the equilibrium price changes? Why?
d) Can you judge how the equilibrium quantity changes? Why?