Homework1 - Principles of Microeconomics: Homework 1 Due...

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Principles of Microeconomics: Homework 1 Due Date; Friday 01 February 2008, by the end of the Class. Select the option that provides the single best answer and mark the letter that corresponds to your answer on the answer sheet provided separately. 1. Local farmers reduce the price of their tomatoes at the farmers’ market. The price of corn is 30¢ per ear. A passing economist theorizes that, ceteris paribus , buyers will purchase more tomatoes than before. Which of the following is TRUE? The economist is (a) implying that the price of tomatoes will fall even further. (b) assuming that the price of corn will remain at 30¢ per ear. (c) assuming that tomatoes are of a better quality than before. (d) implying that corn is of a poorer quality than before. 2. Which of the following is not given in the textbook as a criterion for judging the results of economic policy? (a) Economic stability (b) Employment (c) Efficiency (d) Equity 3. Economic growth may occur if (a) more machines become available. (b) more workers become available. (c) workers become more efficient. (d) All of the above 4. Economics is the study of how (a) scarce resources are used to satisfy unlimited wants. (b) we choose to use unlimited resources. (c) limitless resources are used to satisfy scarce wants. (d) society has no choices. 5. The opportunity cost of Choice X can be defined as (a) the cheapest alternative to Choice X . (b) the most highly valued alternative to Choice X . (c) the price paid to obtain X . (d) the most highly priced alternative to Choice X . 6. In economics, efficiency means that (a) income is distributed equally among all citizens. (b) there is a low level of inflation and full unemployment of economic resources. (c) total productivity is increasing at a constant and equal rate within each sector of the economy. (d) the economy is producing those goods and services that citizens desire and is doing so at the least possible cost.
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7. Which of the following statements is true? (a) Microeconomics studies consumer behavior, whereas macroeconomics studies producer behavior. (b) Microeconomics studies producer behavior, whereas macroeconomics studies consumer behavior. (c) Microeconomics studies behavior of individual households and firms, whereas macroeconomics studies national aggregates. (d) Microeconomics studies inflation and opportunity costs, whereas macro- economics studies unemployment and sunk costs. 8. Which of the following statements is true? (a) There is a positive relationship between the price of a product and the quantity demanded. (b) There is a positive relationship between the number of umbrellas bought and the amount of rainfall. (c) There is a negative relationship between height and weight. (d)
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This homework help was uploaded on 03/30/2008 for the course ECON 2005 taught by Professor Zirkle during the Spring '07 term at Virginia Tech.

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Homework1 - Principles of Microeconomics: Homework 1 Due...

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