examiia - Principles of Microeconomics Exam II Version A...

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Principles of Microeconomics – Exam II – Version A Name: _________________________ University of Texas-Arlington Multiple Choice : Select the best answer (2 points each) 1. Titanic State University raises tuition for the purpose of increasing its revenue to hire more faculty. TSU is assuming that the demand for education at TSU is d. relatively inelastic. 2. “Black Markets” or illegal market activities are commonly associated with c. price ceilings and the resulting product shortages 3. Suppose economists estimate that a 10 percent increase in the price of tobacco would reduce the quantity demanded by 5 percent. This means that the elasticity of demand for cigarettes is: _____ b. 0.5 4. Suppose the oil companies plan a 10 percent increase in the price of gasoline. If the elasticity of demand for gasoline is 0.2, the quantity demanded of gasoline would: a. fall 2 percent. 5. A response to a price change would be described as a: _____ b. movement along an existing demand curve. 6. A perfectly inelastic supply curve represents: d. a fixed supply of a good. 7. The law of demand implies that when people are asked to conserve water during a drought, d. they will be more likely to cooperate if the rates charged for water rise. 8. If prices are expected to rise in the future, today's market: c. is affected by an increase in demand and a higher equilibrium price. 9. The generalization that sellers are willing and able to produce and sell more of a good if the price rises is known by economists: _____ b. as the law of supply. 10. For which pairs of goods is the cross-price elasticity of demand most likely to be negative? a. razors and blades 11. The income elasticity of demand is likely to be lowest for which of the following goods? c. milk 12. The demand for emergency medical care (within a range of prices the person can afford) is probably: _____ b. perfectly inelastic. 13. A good will tend to be more elastic if: _____ b. it has close substitutes. 14. Utiltiy refers to the a. satisfaction which a consumer derives from a good or service.
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examiia - Principles of Microeconomics Exam II Version A...

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