MultCforReviewofEcon101

MultCforReviewofEcon101 - 1 UNIVERSITY OF WATERLOO...

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UNIVERSITY OF WATERLOO - Department of Economics - Prof. Cuenca ECONOMICS 201 (Microeconomic Theory) MULTIPLE-CHOICE QUESTIONS ( ANSWER KEY IS AT THE END ) 1. If the demand curve for product B shifts to the right as the price of product A declines, it can be concluded that a. A and B are substitutes b. A and B are complements c. A is an inferior good and B is a normal good d. A is a normal good and B is an inferior good e. both A and B are inferior goods 2. If a 1 percent change in price results in a 10 percent change in the quantity demanded, the price elasticity of demand is a. 10 b. 1 c. zero d. 0.1 e. 0.01 3. Along a linear demand curve, the price elasticity a. is constant b. increases as price falls c. is equal to 1 at the midpoint d. decreases as price rises 4. If two supply curves pass through the same point a. the flatter supply curve is the less elastic b. the flatter supply curve is the less elastic, provided that it passes through the origin c. the flatter supply curve is the more elastic d. their elasticity is the same e. it is impossible to compare their elasticities 5. A technological change that shifts the supply curve to the right will cause total revenue to a. rise if demand is price elastic b. fall if demand is price elastic c. rise if demand is price inelastic d. rise if the price elasticity of demand is 1 e. fall if the price elasticity of demand is 1 6. If a price ceiling is imposed and the quantity demanded exceeds the quantity supplied, which of the
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MultCforReviewofEcon101 - 1 UNIVERSITY OF WATERLOO...

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