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Unformatted text preview: MICROECONOMICS – SAMPLE TEST ONE NAME __________________________________ DATE ____________________ Fifty multiple choice questions. For each question, circle/ provide the best answer. 1. The basic purpose of the "other things equal" (ceteris paribus) assumption is to: A) allow one to reason about the relationship between price and quantity of X without the intrusion of a change in the price of a complementary good for X. B) allow one to reason about the relationship between price and quantify of X without the intrusion of a change in the price of a substitute good for X. C) A and B D) Neither A nor B 2. When it comes to matters of economic opinion, your professor prefers that you: A) agree with him B) agree with the textbook C) agree with your fellow students D) none of the above 3. If we say that two variables are not related (neither inversely nor directly), this means that: A) the two graph as an upsloping line. B) the two graph as a downsloping line C) the two graph as a straight line parallel to the horizontal, but not the vertical axis. D) the two graph as a straight line parallel to the horizontal axis. 4. Answer on the basis of the relationships shown in the above four figures. The amount of Y is directly related to the amount of X in: A) 3 only. B) both 2 and 4. C) 2 only. D) 1 only. 5. Which of the following is NOT real capital (as we define it in economics) ? A) a $1 million assembly line B) a MacDonalds restaurant building C) a $1 million certificate of deposit D) a grill to cook hamburgers for sale 6. On the idea that taxation to fund public education is plunder (and based on our discussion in class): A) Bastiat and your professor agree in principle, but your professor doesn’t live according to his own belief. B) Bastiat and your professor agree in principle, and your professor always lives by his own belief. C) Your professor doesn’t agree with Bastiat at all D) none of the above. 7. Opportunity cost is best defined as: A) the opportunity to pay the lowest price for any productive resource. B) the amount of labor that must be used to produce one unit of any product. C) the opportunity to pay the lowest price for any consumer product. D) the amount of one product that must be given up to produce one more unit of another product. 8. If the demand curve for product B shifts to the right as the price of product A increases, then: A) A and B are substitute goods. B) A is a normal good and B is an inferior good. C) A is an inferior good and B is a normal good. D) A and B are complementary goods. Page 1 9. An increase in consumer incomes (like when one wins the lotto) will: A) increase the demand for an inferior good. B) increase the supply of an inferior good....
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