MT1andKeyFormA

MT1andKeyFormA - Name: _ Class: _ Date: _ ID: A...

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Name: ________________________ Class: ___________________ Date: __________ ID: A 1 Spring2010MT1 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Substitutes are pairs of products with a. positive price elasticity of demand b. positive income elasticity of demand c. negative income elasticity of demand d. negative cross-price elasticity of demand e. positive cross-price elasticity of demand Exhibit 2-7 ____ 2. Current production at which labeled point in Exhibit 2-7 would lead to the largest outward shift in the production possibilities frontier in a later year? a. point b because this point represents greater total production than the other two points b. point a because this point represents a greater consumption level than point b c. point c because this point represents a greater consumption level than the other two points d. point c because this point represents greater production of capital than the other two points e. point b because this point represents greater production of capital than point c ____ 3. If the value of the price elasticity of demand is -0.2, this means that a a. 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded b. 100 percent decrease in price causes a 200 percent increase in quantity demanded c. 20 percent decrease in price causes a 1 percent increase in quantity demanded d. 5 percent decrease in price causes a 1 percent increase in quantity demanded e. 0.2 percent decrease in price causes a 1 percent increase in quantity demanded
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Name: ________________________ ID: A 2 ____ 4. On a production possibilities frontier, the opportunity cost of one more unit of a commodity per time period is measured by the a. amount of satisfaction it gives consumers b. monetary price of the commodity c. amount of tax paid to government for production, sale, and use of the commodity d. amount of the other commodity that must be sacrificed e. amount of unemployed resources that must be used ____ 5. Opportunity cost is defined a. as the value of all alternatives not chosen b. as the value of the best alternative not chosen c. as the difference between the benefits from a choice and the costs of that choice d. as the difference between the benefits from a choice and the benefits from the next best alternative e. only in terms of money spent ____ 6. As the use of Blu-rays (a substitute for DVDs) becomes more widespread, we would expect all of the following except one . Which is the exception? a. Firms will move their resources away from DVD production to Blu-ray production. b. The prices of DVDs will decrease. c. The demand curve for DVD players will shift leftward. d. The demand curve for DVDs will shift leftward. e. The supply curve of DVD players will shift rightward. ____ 7. If an economy is operating at a point inside the production possibilities frontier, then a. unlimited resources must satisfy scarce desires b. some of the nation's resources are unemployed c. society is paying too much for wages d. there is a scarcity of human resources relative to human wants therefore society must have some mechanism for making choices e.
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MT1andKeyFormA - Name: _ Class: _ Date: _ ID: A...

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