Econ200N - First Exam Questions

Econ200N - First Exam Questions - University of Washington...

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University of Washington - Department of Economics Econ200N - Introduction to Microeconomics (Winter 2010) First Exam Questions - with Answer Key (January 25, Monday, 7-8:30pm) Part 1: True or False Questions: Ch1: 1. Efficiency means everyone in the economy should receive an equal share of the goods and services produced. F (difference between efficiency and equity) 2. The fact that people are willing to pay much more for a diamond, which is not needed for survival, than they are willing to pay for a cup of water, which is needed for survival, is an example of irrational behavior. F (marginal cost and benefits) Ch2: 3. The effects of foreign borrowing by the federal government would be studied by a microeconomist rather than a macroeconomist. F 4. Positive statements are descriptive, whilst normative statements are prescriptive. T Ch4: 5. When Mario's income decreases, he buys more pasta. For Mario, pasta is a normal good. F 6. An increase in the price of a substitute will shift the demand curve for a good to the right. T Ch5: 7. Price elasticity of demand along a linear, downward-sloping demand curve increases as price falls. F 8. If the price elasticity of supply is 2 and the quantity supplied decreases by 6%, then the price must have decreased by 3%. T Ch6: 9. Minimum-wage laws dictate the lowest wage that firms may pay workers. T 10. A price ceiling set above the equilibrium price is not binding. T Part 2: Multiple Choice Questions: (Choose the best answer) Ch1: 11. The word that comes from the Greek word for ''one who manages a household'' is A) market B) consumer
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C) producer D) economy 12. When a society cannot produce all the goods and services people wish to have, it is said that the economy is experiencing A) scarcity B) surpluses C) inefficiencies D) inequalities 13. Which of the following statements best represents the principle represented by the adage, ''There is no such thing as a free lunch''? A) Melissa can attend the concert only if she takes her sister with her. B) Greg is hungry and homeless. C) Gan must repair the tire on his bike before he can ride it to class. D) Rachel must decide between going to Australia or South Africa for spring break. 14. When society requires that firms reduce pollution, there is A) a tradeoff because of reduced incomes to the firms' owners and workers B) a tradeoff only if some firms are forced to close. C) no tradeoff, since the cost of reducing pollution falls only on the firms affected by the requirements. D) no tradeoff, since everyone benefits from reduced pollution. 15. Central planning refers to A) markets guiding economic activity. Today many countries that had this system have abandoned it. B) markets guiding economic activity. Today many countries that did not have this system have implemented it. C) government guiding economic activity. Today many countries that had this system have
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Econ200N - First Exam Questions - University of Washington...

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