Question

5 Microeconomic questions

Josh is a hockey player on his university's team. He practices four times a week with his team and sometimes attends Friday night open skate with his friends. If Josh decides to attend the Friday night skate, the cost is $5. Which of the following is economically true regarding Josh's decision to join his friends on Friday night? Josh will only attend Friday night skate if there is no charge, a fifth time skating will not benefit him at all. Since Josh already skates four times a week with his hockey team, he will never choose to skate a fifth time that week. O If Josh decides to join his friends, he must feel that he gains at least $5 in fun by attending a fifth weekly session on the ice. Josh should never attend Friday night open skate--he could get hurt and jeopardize his hockey 0 career.

Answer 1

Ques 1.

Given that it costs John $5 to attend the Friday night skate with his friends, he will choose to attend the skate night only if the benefit derived from attending the night is more than the cost of skating.

Ans. (C)

Ques 2.

Since wheat is used as an input in the production of wheat bread, a fall in the price of wheat will lead to a fall in the cost of producing bread. As a result, more bread will be supplied at the same price and hence the supply curve will shift rightwards.

Ans. (D)

Ques 3.

Of the given choices, tires and bicycle is a combination containing both an intermediate good and a final good. Tires are intermediate goods used to produce bicycles, which is then consumed as a final good.

Ans. (D)

Ques 4.

Microeconomics is that branch of economics which studies the behaviour of individuals, consumers and firms in an economy.

Ans. (B)

Ques 5.

Of the given choices, a company laying off its workers in order to meet its budget is a labour-leisure tradeoff. This is because the worker being laid off is not given a choice in such a case.

Ans. (B)