exam1c - 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. ____ 1. If an economy is producing efficiently, then a. there is no way to produce more of one good without producing less of another good. b. it is possible to produce more of both goods without increasing the quantities of inputs that are being used. c. it is possible to produce more of one good without producing less of the other. d. it is not possible to produce more of any good at any cost. ____ 2. Each of the following is a determinant of demand except a. tastes. b. technology. c. expectations. d. the prices of related goods. ____ 3. Suppose Spencer and Kate are the only two demanders of lemonade. Each month, Spencer buys six glasses of lemonade when the price is $1.00 per glass, and he buys four glasses when the price is $1.50 per glass. Each month, Kate buys four glasses of lemonade when the price is $1.00 per glass, and she buys two glasses when the price is $1.50 per glass. Which of the following points is on the market demand curve? a. (quantity demanded = 4, price = $2.50) b. (quantity demanded = 16, price = $2.50) c. (quantity demanded = 3, price = $1.50) d. (quantity demanded = 10, price = $1.00) Figure 4-7 ____ 4. Refer to Figure 4-7 . At a price of $35, a. there would be a shortage of 400 units. b. there would be a surplus of 200 units. c. there would be a surplus of 400 units. d. there would be an excess supply of 200 units.
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Scenario 21-1 Suppose the price of pizza is $10, the price of cola is $1, and the consumer’s income is $50. In addition, suppose the consumer’s budget constraint measures pizza on the horizontal axis and cola on the vertical axis. ____ 5. Refer to Scenario 21-1. If the price of cola doubles to $2, then the a. budget constraint intersects the vertical axis at 25 colas. b. slope of the budget constraint rises to -2. c. budget constraint intersects the vertical axis at 100 colas. d. budget constraint shifts inward in a parallel fashion. ____ 6. Senator Smart, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Smart should argue that trade can be beneficial a. only if it allows us to obtain things that we couldn't make for ourselves. b. because it allows specialization, which increases total output. c. to us if we can gain and the others involved in the trade lose. d. in only a limited number of circumstances because others are typically self-interested. Table 3-3 Labor Hours Needed to Make One: Amount Produced in 24 Hours: Basket Birdhouse Baskets Birdhouses Montana 6 2 4 12 Missouri 3 1.5 8 16 ____ 7. Refer to Table 3-3 . Montana has a comparative advantage in a. baskets and Missouri has a comparative advantage in birdhouses. b.
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exam1c - Introduction to Microeconomics Fall 2008 Exam 1...

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