exam1a - Introduction to Microeconomics Fall 2008 Exam 1...

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Introduction to Microeconomics Fall 2008 Exam 1 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. Figure 2-5 ____ 1. Refer to Figure 2-5. Which of the following events would explain the shift of the production possibilities frontier from A to B? a. The economy experienced a technological advance in the production of batteries. b. The economy’s citizens developed an enhanced taste for batteries. c. More capital became available in the economy. d. More labor became available in the economy. ____ 2. Which of the following is true? a. Efficiency refers to the size of the economic pie; equity refers to how the pie is divided. b. Government policies usually improve upon both equity and efficiency. c. As long as the economic pie continually gets larger, no one will have to go hungry. d. Efficiency and equity can both be achieved if the economic pie is cut into equal pieces. ____ 3. What will happen to the equilibrium price and quantity of traditional camera film if traditional cameras become more expensive, digital cameras become cheaper, the cost of the resources needed to manufacture traditional film falls and more firms decide to manufacture traditional film? a. Price will fall and the effect on quantity is ambiguous. b. Price will rise and the effect on quantity is ambiguous. c. Quantity will fall and the effect on price is ambiguous. d. The effect on both price and quantity is ambiguous. Figure 4-2
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____ 4. Refer to Figure 4-2 . The movement from D to D 1 could be caused by a. an increase in price. b. a decrease in the price of a complement. c. a technological advance. d. a decrease in the price of a substitute. ____ 5. A minimum wage that is set above a market's equilibrium wage will result in a. an excess demand for labor, that is, unemployment. b. an excess demand for labor, that is, a shortage of workers. c. an excess supply of labor, that is, unemployment. d. an excess supply of labor, that is, a shortage of workers. ____ 6. The midpoint method is used to compute elasticity because it a. automatically computes a positive number instead of a negative number. b. results in an elasticity that is the same as the slope of the demand curve. c. gives the same answer regardless of the direction of change. d. automatically rounds quantities to the nearest whole unit. ____ 7. If an economy is producing efficiently, then a. there is no way to produce more of one good without producing less of another good. b. it is possible to produce more of both goods without increasing the quantities of inputs that are being used. c. it is possible to produce more of one good without producing less of the other. d. it is not possible to produce more of any good at any cost. ____ 8.
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This note was uploaded on 03/23/2011 for the course 220 102 taught by Professor Perry during the Fall '09 term at Rutgers.

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exam1a - Introduction to Microeconomics Fall 2008 Exam 1...

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