Practice Midterm

Practice Midterm - Econ 01 Winter 2008 Practice questions...

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1 Econ 01 Winter 2008 Practice questions for Midterm 1 Be sure to bring a scantron (pink) to the exam. You do NOT need a bluebook. You may also bring a simple calculator, but it’s not necessary. You will have 70 minutes to complete the exam. Multiple Choices: 1) The cross price elasticity of demand for Coke and Pepsi is a) equal to zero b) larger than zero c) less than zero d) cannot be estimated 2) If a good has many close substitutes, its price elasticity of demand will be a) constant b) larger than if there existed few close substitutes c) smaller than if there existed few close substitutes d) unit elastic 3) If the price of good A decreases, the producer surplus in the good A market a) increases b) decreases c) does not change d) may increase, decrease, or stay the same 4) Economists say markets are efficient when a) the opportunity costs are minimized b) total revenue is maximized c) total surplus is maximized d) it is possible to make someone better off while making another worse off 5) If a good represents a small portion of consumer’s income, then the price elasticity of demand will be a) low b) high c) the same as when it represents a small portion of people’s income d) inelastic 6) What would be the effect of the minimum wage if the equilibrium wage were above the minimum wage? a)
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Practice Midterm - Econ 01 Winter 2008 Practice questions...

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