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# versiond1 - Introduction to Microeconomics Spring 2010 Exam...

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Introduction to Microeconomics Spring 2010 Exam 1 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Two goods are complements when a decrease in the price of one good a. increases the demand for the other good. b. increases the quantity demanded of the other good. c. decreases the quantity demanded of the other good. d. decreases the demand for the other good. ____ 2. A minimum wage that is set above a market's equilibrium wage will result in ____ 3. Suppose the government has imposed a price ceiling on televisions. Which of the following events could transform the price ceiling from one that is not binding into one that is binding? ____ 4. When we move upward and to the left along a linear, downward-sloping demand curve, price elasticity of demand ____ 5. In the work-leisure model, suppose consumption and leisure are both normal goods. The income effect of a wage increase results in the worker choosing to a. possibly work more or less than before. b. work more than before with a higher level of consumption. c. work less than before. d. work more than before. ____ 6. 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? ____

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versiond1 - Introduction to Microeconomics Spring 2010 Exam...

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