Cassie’s Quilts alters, reconstructs and restores heirloom quilts

| October 12, 2019

Cassie’s Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively, she can sell the quilt “as is” now for $900. What is the marginal cost of completing the task? (Points : 1) $200 $500 $1,000 $1,000 plus the value of her time 2. Where do economic agents such as individuals, firms and nations, interact with each other? (Points : 1) in public locations monitored by the government. in any arena that brings together buyers and sellers. in any physical location people where people can physically get together for selling goods, such as shopping malls. in any location where transactions can be monitored by consumer groups and taxed by the government. 3. Consider the following two factors: These statements suggest that (Points : 1) it is highly likely that the average person will lose her job due to outsourcing. the likelihood that the average person will lose her job due to outsourcing is large small to losing her job due to other causes. the likelihood that the average person will lose her job due to outsourcing is very small compared to losing her job due to other causes. the US is not creating jobs fast enough to offset jobs lost due to outsourcing and other causes. 4. Cassie’s Quilts alters, reconstructs and restores heirloom quilts. Cassie has just spent $800 purchasing, cleaning and reconstructing an antique quilt which she expects to sell for $1,500 once she is finished. After having spent $800, Cassie discovers that she would need some special period fabric that would cost her $200 in material and time in order to complete the task. Alternatively, she can sell the quilt “as is” now for $900. What should she do? (Points : 1) She should cut her losses and sell the quilt now. It does not matter what she does; she is going to take a loss on her project. She should purchase the period fabric, complete the task and then sell the quilt. She should not do anymore work on the quilt because she has already spent too much time on it and has not been paid for that time. 5. A grocery store sells a bag of potatoes at a fixed price of $2.30. Which of the following is a term used by economists to describe the money received from the sale of an additional bag of potatoes? (Points : 1) marginal revenue gross earnings pure profit marginal costs net benefit 6. A successful market economy requires well defined property rights and (Points : 1) balanced supplies of all factors of production. an independent court system to adjudicate disputes based on the law. detailed government regulations. a safety net to ensure that those who cannot participate in the market economy can earn an income. 7. Figure 2-11 Refer to Figure 2-11. Which two arrows in the diagram depict the following transaction: Lizzie Haxem hires “The Paint Pros,” a professional painting company, to paint her home. (Points : 1) J and M K and G K and M J and G 8. A production possibilities frontier with a bowed outward shape indicates (Points : 1) the possibility of inefficient production. constant opportunity costs as more and more of one good is produced. increasing opportunity costs as more and more of one good is produced. decreasing opportunity costs as more and more of one good is produced. 9. Table 2-3 Table 2-3 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. Refer to Table 2-3. What is South Korea’s opportunity cost of producing one pound of wheat? (Points : 1) 5 digital cameras 60 digital cameras 20 digital cameras 0.05 units of a digital camera 10. Table 2-3 Table 2-3 shows the number of labor hours required to produce a digital camera and a pound of wheat in China and South Korea. Refer to Table 2-3. What is China’s opportunity cost of producing one pound of wheat? (Points : 1) 0.04 units of a digital camera 40 digital cameras 25 digital cameras 4 digital cameras 11. All of the following are examples of spending on factors of production in the circular flow model except (Points : 1) Bima hires two students to work at his ice-cream store. “Get Fit Together'” purchases 3 new treadmills for its gym. Iris buys a dozen roses for her mother’s birthday. The Banyan Tree rents a much larger property so that it can add a restaurant to its facilities. 12. Figure 3-5 Refer to Figure 3-5. Assume that the graphs in this figure represent the demand and supply curves for used clothing, an inferior good. Which panel describes what happens in this market as a result of a decrease in income? (Points : 1) Panel (a) Panel (b) Panel (c) Panel (d) 13. How does the increasing use of digital cameras affect the market for traditional camera film? (Points : 1) The demand curve for traditional camera film shifts to the right. The supply curve for traditional camera film shifts to the left. The supply curve for traditional camera film shifts to the right. The demand curve for traditional camera film shifts to the left. 14. Figure 3-6 Refer to Figure 3-6. The graph in this figure illustrates an initial competitive equilibrium in the market for apples at the intersection of D1 and S1 (point A). If there is a shortage of apples how will the equilibrium point change? (Points : 1) The equilibrium point will move from A to B. The equilibrium point will move from A to C. There will be no change in the equilibrium point. The equilibrium point will move from A to E. 15. If in the market for apples the supply has decreased then (Points : 1) the supply curve for apples has shifted to the right. there has been a movement upwards along the supply curve for apples. the supply curve for apples has shifted to the left. there has been a movement downwards along the supply curve for apples. 16. If the price of automobiles were to increase, then (Points : 1) the demand for gasoline would decrease. the demand for gasoline would increase. the supply of gasoline would increase. the quantity demanded of gasoline would decrease. 17. Figure 4-7 Figure 4-7 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help almond growers by setting a price floor at Pf. Refer to Figure 4-7. What is the area that represents producer surplus after the imposition of the price floor? (Points : 1) A + B + E B + E B + E + F B + C + D + E 18. Suppose the demand curve for a product is downward sloping and the supply curve is upward sloping. If a unit tax is imposed in the market for this product, (Points : 1) sellers bear the entire burden of the tax. the tax burden will be shared among the government, buyers and sellers. buyers bear the entire burden of the tax. the tax burden will be shared by buyers and sellers. 19. Table 4-3 Table 4-3 shows the demand and supply schedules for the low-skilled labor market in the city of Westover. Refer to Table 4-3. If a minimum wage of $7.50 an hour is mandated, what is the quantity of labor supplied? (Points : 1) 390,000 370,000 340,000 380,000 20. Figure 4-2 Refer to Figure 4-2. What area represents producer surplus at a price of P2? (Points : 1) A + B B + D A + B + C A + B + C + D + E 21. The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called (Points : 1) producer surplus. the substitution effect. the income effect. consumer surplus. 22. Figure 4-5 Refer to Figure 4-5. The figure above represents the market for iced tea. Assume that this is a competitive market. If 20,000 units of iced tea are sold (Points : 1) the deadweight loss is equal to economic surplus. producer surplus equals consumer surplus. the marginal benefit of each of the 20,000 units of iced tea equals $3. marginal benefit is equal to marginal cost. 23. Figure 6-7 Refer to Figure 6-7. A perfectly inelastic supply curve is shown in (Points : 1) Panel A. Panel B. Panel C. Panel D. 24. Suppose at the going wage rate of $20 per hour, firms can hire as many hours of janitorial services as it desires. If any firm tries to lower the wage rate to $19, it will not be able to hire any janitor. What does this indicate about the supply of janitorial services curve? (Points : 1) Supply is unit price elastic. Supply is perfectly price elastic. Supply is perfectly price inelastic. Supply is relatively price inelastic. 25. When demand is unit price elastic, a change in price causes total revenue to stay the same because (Points : 1) the percentage change in quantity demanded exactly offsets the percentage change in price. buyers are buying the same quantity. total revenue never changes with price changes. the change in profit is offset by the change in production cost. 26. Which of the following statements about the price elasticity of demand is correct? (Points : 1) The elasticity of demand for a good in general is equal to the elasticity of demand for a specific brand of the good. The absolute value of the elasticity of demand ranges from zero to one. Demand is more elastic in the long run than it is in the short run. Demand is more elastic the smaller percentage of the consumer’s budget the item takes up. 27. If the percentage change in price is 20 percent and the value of the price elasticity of demand is -5, then quantity demanded (Points : 1) will increase by 100 percent. will increase by 5 percent. will decrease by 100 percent. impossible to determine without additional information. 28. Table 10-2

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