Interstate 4 (I-4) and State Road 408 are two major

Interstate 4 (I-4) and State Road 408 are two major

Subject: Economics    / General Economics
Question

1- Interstate 4 (I-4) and State Road 408 are two major highways that affect traffic flows in Orlando. Motorists are not required to pay a toll (user fee) to drive on Interstate 4, whereas they are required to pay a toll (user fee) to drive on State Road 408. If at a given time of day State Road 408 is highly congested, then it could be considered to possess the properties of a:

private good

club good

common property good

public good

2- In considering consumer demand for a good it is reasonable to expect that:
i. demand curves for a given good are identical between consumers
ii. demand curves for a given good differ between consumers
iii. an individual has identical demand curves for different goods
iv. an individual has different demand curves for different goods

i

ii

iii

iv

i and iii

ii and iv

3- Suppose the market demand curve for a good is represented by the linear equation Q = 100 – 0.5P. If the market price were to decrease from P = $50 to P = $40, then holding all other factors constant:

the quantity demanded would decrease by 5 units and total expenditures on the good would increase by $150

the quantity demanded would decrease by 15 units and total expenditures on the good would decrease by $450

the quantity demanded would decrease by 25 units and total expenditures on the good would increase by $750

the quantity demanded would increase by 10 units and total expenditures on the good would increase by $300

the quantity demanded would increase by 5 units and total expenditures on the good would decrease by $550

the quantity demanded would increase by 85 units and total expenditures on the good would increase by $2550

4- The determinants of supply are:
i. factors other than price that affect the quantity of a good or service a firm is willing and able to produce
ii. factors that affect a firms maximum willingness-to-accept (WTA) to produce various quantities of a good
iii. factors that affect a firms minimum willingness-to-accept (WTA) to produce various quantities of a good

5- If the level of technology used in the production of a good improves, and assuming the quality of the good does not change, then:
i. more output may be obtained with a given amount of inputs compared to before the technological improvement
ii. a given amount of output may be obtained with fewer inputs compared to before the technological improvement
iii. the firm will increase its use of other inputs, such as the number of workers it employs
iv. market demand for the good will increase

i

ii

iii

iv

i and ii

i, ii, and iii

i, ii, and iv

i, ii, iii, and iv