Econ_11_Prac_Exam_1-1

# Econ_11_Prac_Exam_1-1 - Practice Exam 1 Econ 11...

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Practice Exam 1 1 Econ 11 Microeconomics Practice Exam 1 I-1 1. The study of economics is primarily concerned with: a. keeping private businesses from losing money. b. demonstrating that capitalistic economies are superior to socialistic economies. c. determining the most equitable distribution of society’s output. d. choices that are made in seeking to use scarce resources efficiently. I-2 2. Why do economists assume that people are selfish? peoples’ happiness. activity. that people are purely selfish.

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Practice Exam 1 2 I-3 3. Barack says that “The imposition of a tax on beer will raise its price.” Hillary argues that “Taxes should be imposed on beer because college students drink too much.” We can conclude that: III-1 4. Excluding corner solutions, in consumer equilibrium, which of the following is true? budget constraint. III-2 5. A consumer’s utility function increases with the product of the quantities of two goods X and Y, as well as the sum of the quantities of good X and one and a half times the quantity of good Y: U(X, Y) = XY + X + 1.5 Y. The consumer faces a budget constraint. Here income is \$90 and the prices of X and Y are \$5 and \$7.50 respectively. The utility maximizing bundle is: a. X = 3, Y = 10 b. X = 9, Y = 6 c. X = 6, Y = 8 d. X = 12, Y = 4 e. X = 15, Y = 2
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