- Which of the following is an implicit cost for
the owner of a small store in your hometown?
(A) The wage that is paid to the assistant manager
(B) The cost of purchasing canned goods from
a wholesale food distributor
(C) The value placed on the owner’s skills in an
alternative career
(D) The cost of cooling the refrigerated meat
display
(E) The price of placing an advertisement in the
local newspaper - Suppose a price floor is installed in the market
for coffee. One result of this policy would be
(A) a decrease in the demand for coffee-brewing
machines.
(B) a persistent shortage of coffee in the market.
(C) an increase in consumer surplus due to
lower coffee prices.
(D) an increase in the demand for coffee.
(E) a decrease in the profits for the owners of
coffee plantations.Questions 16 to 17 refer to the table below, which
describes employment and production of a firm that
hires labor and produces output in competitive mar-
kets. The competitive price of the product is $.50.
UNITS OF LABOR TOTAL PRODUCT
00
111
220
327
432
535- Which unit of labor has marginal revenue prod-
uct equal to $1.50?
(A) 1st
(B) 2nd
(C) 3rd
(D) 4th
(E) 5th- If the wage paid to all units of labor is $4.50,
how many units of labor are hired?
(A) 1
(B) 2
(C) 3
(D) 4
(E) 5
18. Which of the following is true of the perfectly
competitive firm in the short run?
(A) The firm earns a normal profit.
(B) The firm shuts down if the price falls below
average total cost.
(C) The firm earns positive economic profit.
(D) The firm maximizes profit by producing
where the price equals marginal revenue.
(E) The firm may earn positive, negative, or
normal profits.Questions 19 to 21 refer to the figure below.- If the current price is 0B, we would expect
(A) a surplus in the market to be eliminated by
rising prices.
(B) a shortage in the market to be eliminated by
falling prices.
(C) a surplus in the market to be eliminated by
falling prices.
(D) quantity demanded to be equal to quantity
supplied as the market is in equilibrium.
(E) a shortage in the market to be eliminated by
rising prices.- If the price were to fall from 0C to 0A, which of
the following would be true?
(A) Dollars spent on this good would increase if
demand for the good were price inelastic.
(B) Dollars spent on this good would decrease if
demand for the good were price elastic.
(C) Dollars spent on this good would increase if
demand for the good were price elastic.
(D) Dollars spent on this good would increase if
demand for the good were unitary price
elastic.
(E) Dollars spent on this good would decrease if
demand for the good were unitary price
elastic.QuantitySupplyDemandPriceCB
AFGEDIH(^0) JKL
AP Microeconomics Practice Exam 2 ‹ 191