Microeconomics Final Exam Review Questions With Complete Solutions Latest Version 2024( A+ Graded 100% Verified).

Profit {Ans: A financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.}Suppose the large number of auto accidents in a small town results in new legislation that requires all citizens of the town to install new anti-lock brakes on their cars. These new brakes cut the time it takes a car to stop by 50%, allowing drivers to more easily avoid collisions with other cars and pedestrians. The new brakes ____________ the probability that a vehicle will collide with another vehicle but also gives drivers an incentive to drive more __________ , which could potentially _________ the number of car accidents in the town. {Ans: decrease; recklessly; increase}Your opportunity cost of going to a movie is {Ans: the total cash expenditure needed to go to the movie plus the value of your time.}Variable cost {Ans: A cost that varies with the level of output. M = variable cost}A life-saving medicine without any close substitutes will tend to have: {Ans: a small elasticity of demand}True or false: All Giffen goods are inferior goods. {Ans: true}