micro quizz6 - SECTION ONE MULTIPLE CHOICE QUESTIONS (40...

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SECTION ONE – MULTIPLE CHOICE QUESTIONS (40 marks) 1. The opportunity cost of going to Master of Development Economics (MDE) programme is a. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses. b. the value of the best opportunity a student gives up to attend MDE programme. c. zero for students who are fortunate enough to have all of their MDE expenses paid by someone else. d. zero, since a MDE education will allow a student to earn a larger income after graduation. 2. When a firm cannot exclude non-payers from using an advice service, the firm a. has a free rider problem. b. has incentives to provide the efficient amount of information. c. is a perfect price discriminator. d. is providing a public good. 3. A likely effect of government policies that redistribute income and wealth from the wealthy to the poor is that those policies a. enhance equity. b. reduce efficiency. c. reduce the reward for working hard. d. All of the above are correct. 4. A friend of yours asks you why market prices are better than government-determined prices. Because you understand economic principles, you say that market- determined prices are better because they generally reflect a. the value of a good to society, but not the cost of making it. b. the cost of making a good to society, but not its value. c. both the value of a good to society and the cost of making it. d. neither the value of a good to society nor the cost of making it.
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Figure 1 5. Refer to Figure 1 . Which arrow represents the flow of goods and services? a.A b.B c.C d.D 6. Refer to Figure 1 . Which arrow represents the flow of spending by households? a.A b.B c.C d.D 7. Identify each of the following topics as being part of microeconomics or macroeconomics: a.the impact of a change in consumer income on the purchase of luxury automobiles b.the effect of a change in the price of Coke on the purchase of Pepsi c.the impact of a war in the Middle East on the rate of inflation in the US d.factors influencing the rate of economic growth e.factors influencing the demand for tractors f. the impact of tax policy on national saving g.the effect of pollution taxes on the U.S. copper industry h.the degree of competition in the cable television industry i. the effect of a balanced-budget amendment on economic stability j. the impact of deregulation on the savings and loan industry a. b, c, g, h, and i are microeconomic topics. e, d, f, and j are macroeconomic topics. b. b, e, g, h, and j are microeconomic topics. c, d, f, and i are macroeconomic topics. c. b, e, d, h, and j are microeconomic topics. c, g, f, and i are macroeconomic topics. d. b, e, g, f, and j are microeconomic topics. c, d, f, and h are macroeconomic topics.
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Figure 2 8. Refer to Figure 2 . Which of the four graphs represents the market for winter coats as we progress from winter to spring? a.A
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micro quizz6 - SECTION ONE MULTIPLE CHOICE QUESTIONS (40...

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