Microeconomics True or False — Rapid-Fire Quiz | Mixed Topics (8 min)

[00:00:05]An economy on its PPF produced 300 X and 200 Y last year and after technological improvements now produces 310 X and 220 Y. The improvement was necessarily in both goods.

[00:00:17]True, false, or can't be determined?

[00:00:26]The answer is false.

[00:00:28]Incorrect.

[00:00:29]At a price below the equilibrium price, the market has a shortage.

[00:00:34]True, false, or can't be determined?

[00:00:43]The answer is true.

[00:00:45]Below equilibrium, quantity demanded exceeds quantity supplied, a shortage.

[00:00:50]In a great market with normal supply and demand where the price was five Israeli new shekels per kilogram, after the government grants producers a three Israeli new shekels per kilogram subsidy, the consumer price will be exactly two Israeli new shekels.

[00:01:03]True, false, or can't be determined?

[00:01:12]The answer is false.

[00:01:14]Incorrect.

[00:01:16]With 120 workers and 100 machines, where iron needs one machine plus three workers per ton and steel needs two machines plus two workers, producing 40 tons of iron leaves the economy able to make 50 tons of steel.

[00:01:29]True, false, or can't be determined?

[00:01:37]The answer is false.

[00:01:39]Incorrect.

[00:01:41]An economy on its PPF gets better tech for good X, but keeps consuming the same amount of X. As a result, output of Y will rise.

[00:01:49]True, false, or can't be determined?

[00:01:58]The answer is true.

[00:02:00]The freed-up resources move to Y, so production of Y rises.

[00:02:04]Moving from a point below the PPF to a point on the PPF indicates an increase in the economy's quantity of production factors.

[00:02:12]True, false, or can't be determined?

[00:02:20]The answer is false.

[00:02:22]Incorrect. Three consumers buy 50 units per week in total, with the good normal for A, inferior for B, and neutral for C. When everyone's income rises by an unknown amount, nothing can be determined about total quantity demanded, as it could rise, fall, or stay at 50.

[00:02:39]True, false, or can't be determined?

[00:02:48]The answer is true.

[00:02:50]A's demand rises and B's falls by unknown magnitudes, so the net change in total demand is indeterminate.

[00:02:56]When goods X and Y are complements in competitive markets and a technological improvement raises the marginal product of inputs in producing X, in the new equilibrium profits stay unchanged in both industries.

[00:03:08]True, false, or can't be determined?

[00:03:17]The answer is false.

[00:03:19]Incorrect.

[00:03:21]On an island that produces only sugar with a perfectly inelastic, vertical supply curve and the only factor, a rise in demand for sugar causes output to rise while wages stay unchanged.

[00:03:32]True, false, or can't be determined?

[00:03:41]The answer is false.

[00:03:43]Incorrect.

[00:03:44]A good is produced using only labor and has a normal upward-sloping supply curve. If workers' wages fall, supply does not change.

[00:03:52]True, false, or can't be determined.

[00:04:01]The answer is false.

[00:04:03]Incorrect. Carrot fields land are fixed while more workers are added, the effect on the marginal product of land cannot be determined.

[00:04:12]True, false, or can't be determined.

[00:04:20]The answer is false.

[00:04:23]Incorrect.

[00:04:24]The correct answer is it rises.

[00:04:27]Adding more workers to fixed land raises the marginal product of that fixed land.

[00:04:32]When wages rise, raising X's variable production costs and taste shifts so demand for X rises at the same time, the new equilibrium price of X may rise, fall, or stay the same depending on the relative shifts.

[00:04:45]True, false, or can't be determined.

[00:04:53]The answer is false.

[00:04:55]Incorrect. Pizza and mushrooms are complements while pizza and falafel are substitutes, all with normal supply and demand curves, and after the government imposes a one shekel tax on each pizza sold, the quantity of mushrooms sold will increase.

[00:05:10]True, false, or can't be determined.

[00:05:18]The answer is false.

[00:05:21]Incorrect.

[00:05:22]A small country produces good X domestically and also imports it. When the government abolishes the import tariff, the world price of the imported good will fall.

[00:05:31]True, false, or can't be determined.

[00:05:40]The answer is false.

[00:05:42]Incorrect. An Israeli worker picks two tons of bananas or four tons of oranges per day and a foreign worker picks three tons of bananas or five tons of oranges per day. With 10 Israeli and 10 foreign workers, it follows that only foreign workers should ever be employed.

[00:05:57]True, false, or can't be determined?

[00:06:06]The answer is false.

[00:06:08]Incorrect. Marginal product of labor is output per machine.

[00:06:13]True, false, or can't be determined?

[00:06:22]The answer is false.

[00:06:24]Incorrect.

[00:06:26]The correct answer is the extra output from one more worker.

[00:06:30]It's the addition to total output from hiring one more worker.

[00:06:34]A drop in the price of natural gas, an input for industry, is expected to cause a rightward shift of the demand curve for industrial goods.

[00:06:42]True, false, or can't be determined?

[00:06:51]The answer is false.

[00:06:53]Incorrect. When supply of good X increases, lower wages cut variable costs, and demand for X increases at the same time, the new equilibrium price of X stays unchanged.

[00:07:04]True, false, or can't be determined?

[00:07:13]The answer is false.

[00:07:15]Incorrect.

[00:07:16]An economy has 20 workers in 12 acres of land and producing one unit of either good requires one worker and four acres.

[00:07:23]This implies structural unemployment of land.

[00:07:27]True, false, or can't be determined?

[00:07:35]The answer is false.

[00:07:37]Incorrect. Pizza and mushrooms are complements, while pizza and falafel are substitutes, all with normal supply and demand curves. And after the government imposes a one shekel tax on each pizza sold, the price of pizza to consumers rises by less than one shekel.

[00:07:53]True, false, or can't be determined?

[00:08:01]The answer is true.

[00:08:04]With normal upward sloping supply and downward sloping demand, a per-unit tax is shared between buyers and sellers.

[00:08:10]So, the consumer price rises by less than the full tax.