exam1b - Introduction to Microeconomics Fall 2008 Exam 1...

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Introduction to Microeconomics Fall 2008 Exam 1 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. Figure 2-3 ____ 1. Refer to Figure 2-3 . Inefficient production is represented by which point or points? a. D b. D, E c. A, C d. A, B ____ 2. The invisible hand works to promote general well-being in the economy primarily through a. government intervention. b. the political process. c. people’s pursuit of self-interest. d. altruism. Figure 6-8
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____ 3. Refer to Figure 6-8 . The burden of the tax on sellers is a. $1.00 per unit. b. $1.50 per unit. c. $2.00 per unit. d. $3.00 per unit. ____ 4. What would happen to the equilibrium price and quantity of coffee if the wages of coffee-bean pickers fell and the price of tea fell? a. Price will fall and the effect on quantity is ambiguous. b. Price will rise and the effect on quantity is ambiguous. c. Quantity will fall and the effect on price is ambiguous. d. Quantity will rise and the effect on price is ambiguous. ____ 5. Russell spends an hour studying instead of playing tennis. The opportunity cost to him of studying is a. the improvement in his grades from studying for the hour. b. the improvement in his grades from studying minus the enjoyment of playing tennis. c. the enjoyment and exercise he would have received had he played tennis. d. zero. Since Russell chose to study rather than to play tennis, the value of studying must have been greater than the value of playing tennis. Figure 5-7 ____ 6. Refer to Figure 5-7 . If rectangle D is larger than rectangle A, then a. demand is elastic between prices P 1 and P 2 . b. a decrease in price from P 2 to P 1 will cause an increase in total revenue. c. the magnitude of the percent change in price between P 1 and P 2 is smaller than the magnitude of the corresponding percent change in quantity demanded. d. All of the above are correct. ____ 7. The country of Econoland produces two goods, textbooks and widgets. Last year it produced 200 textbooks and 500 widgets. This year it produced 250 textbooks and 600 widgets. Given no other information, which of the following events could not explain this change? a. Econoland experienced a reduction in unemployment. b. Econoland experienced an improvement in widget-making technology. c. Econoland acquired more resources. d. Any of these events could, in fact, explain the change. ____ 8. Which of the following is true? a. Efficiency refers to the size of the economic pie; equity refers to how the pie is divided.
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b. Government policies usually improve upon both equity and efficiency. c. As long as the economic pie continually gets larger, no one will have to go hungry. d. Efficiency and equity can both be achieved if the economic pie is cut into equal pieces. Figure 5-4
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This note was uploaded on 02/29/2012 for the course 320 322 taught by Professor Macro-williams,micro-yoshi during the Fall '10 term at Rutgers.

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exam1b - Introduction to Microeconomics Fall 2008 Exam 1...

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