Microeconomics Mc Question
1. Suppose your college institutes a new policy requiring you to pay for a permit to park your car in a campus parking lot.
a. The cost of the parking permit is not part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
b. The cost of the parking permit is part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
c. Only half of the cost of the parking permit is part of the opportunity cost of attending college.
d. The cost of the parking permit is not part of the opportunity cost of attending college under any circumstances.
2. Tom is restoring a car and has already spent $3500 on the restoration. He expects to be able to sell the car for $5000. Tom discovers that he needs to do an additional $2000 of work to make the table worth $5000 to potential buyers. He could also sell the car now, without completing the additional work, for $2800. What should he do?
a. He should sell the car now for $2800.
b. He should keep the car since it wouldn’t be rational to spend $5500 restoring a car and then sell it for only $5000.
c. He should complete the additional work and sell the car for $5000.
d. It does not matter which action he takes since the outcome will be the same either way. 3. An increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events,
a. the demand for tires decreases and the supply of tires increases.
b. the demand for tires is unaffected and the supply of tires decreases.
c. the demand for tires is unaffected and the supply of tires increases.
d. None of the above is necessarily correct.
4. Which of the following might cause the supply curve for an inferior good to shift to the right? a. An increase in input prices.
b. A decrease in consumer income.
c. An improvement in production technology that makes production of the good more profitable. d. A decrease in the number of
a. The cost of the parking permit is not part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
b. The cost of the parking permit is part of the opportunity cost of attending college if you would not have to pay for parking otherwise.
c. Only half of the cost of the parking permit is part of the opportunity cost of attending college.
d. The cost of the parking permit is not part of the opportunity cost of attending college under any circumstances.
2. Tom is restoring a car and has already spent $3500 on the restoration. He expects to be able to sell the car for $5000. Tom discovers that he needs to do an additional $2000 of work to make the table worth $5000 to potential buyers. He could also sell the car now, without completing the additional work, for $2800. What should he do?
a. He should sell the car now for $2800.
b. He should keep the car since it wouldn’t be rational to spend $5500 restoring a car and then sell it for only $5000.
c. He should complete the additional work and sell the car for $5000.
d. It does not matter which action he takes since the outcome will be the same either way. 3. An increase in the price of rubber coincides with an advance in the technology of tire production. As a result of these two events,
a. the demand for tires decreases and the supply of tires increases.
b. the demand for tires is unaffected and the supply of tires decreases.
c. the demand for tires is unaffected and the supply of tires increases.
d. None of the above is necessarily correct.
4. Which of the following might cause the supply curve for an inferior good to shift to the right? a. An increase in input prices.
b. A decrease in consumer income.
c. An improvement in production technology that makes production of the good more profitable. d. A decrease in the number of