Introduction to Microeconomics Spring 2010 Exam 1
Identify the choice that best completes the statement or answers the question.
If a 30 percent change in price causes a 15 percent change in quantity supplied, then the price elasticity of
0.5, and supply is inelastic.
0.5, and supply is elastic.
2, and supply is inelastic.
2, and supply is elastic.
A minimum wage that is set above a market's equilibrium wage will result in
an excess supply of labor, that is, a shortage of workers.
an excess demand for labor, that is, unemployment.
an excess demand for labor, that is, a shortage of workers.
an excess supply of labor, that is, unemployment.
Which markets are represented in the simple circular-flow diagram?
markets for goods and services and markets for financial assets
markets for goods and services and markets for imports and exports
markets for factors of production and markets for financial assets
markets for goods and services and markets for factors of production
Refer to Figure 2-6
This economy has the ability to produce at which point(s)?
A, B, D
A, B, C, F, G
C, F, G
Mike has spent $500 purchasing and repairing an old fishing boat, which he expects to sell for $800 once the
repairs are complete. Mike discovers that, in addition to the $500 he has already spent, he needs to make an
additional repair, which will cost another $400, in order to make the boat worth $800 to potential buyers. He
can sell the boat as it is now for $300. What should he do?
He should complete the repairs and sell the boat for $800.
It does not matter which action he takes; the outcome is the same either way.