Econ_198_Spr_05_Exam__1 - Introduction to Microeconomics...

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Introduction to Microeconomics Allen R. Sanderson Economics 19800 Spring 2005 FIRST HOUR EXAMINATION Name (Please Print): ______________________________________ [39 Points Possible] Part I. Multiple Choice. Circle letter corresponding to your answer. One point each; 18 points total. 1. When economists refer to inferior goods, they mean products for which: a. the demand curve slopes upward not downward. b. the supply curve is downward sloping not upward sloping. c. marginal utility is negative. d. the demand for them increases when income decreases. e. there is no consumer surplus. 2. When comparing the lifetime earnings of high school graduates with those of college graduates, one has to be careful methodologically to take into consideration: a. the fallacy of composition issue. b. the post hoc fallacy. c. distinctions between normative and positive economics. d. the difference between changes in supply and changes in the quantity supplied. e. the possible (or even likely) sample-selection bias problem. 3. The law of demand states that, ceteris paribus, the higher the price of a good or service, a. the more money consumers will spend on it. b. the more of it producers (or suppliers) will want to put on the market. c. the smaller will be the quantity of the good or service demanded. d. those most in need of it will no longer be able to afford to buy it. e. the more the demand curve will shift to the left. 4. We refer to the highest-valued forgone alternative as: a. scarcity. b. its opportunity cost. c. the “what” question. d. normative economics. e. the deadweight loss. 5. On a straight-line downward-sloping demand curve, the maximum price elasticity occurs: a. when the total expenditures by consumers is the highest. b. at its midpoint. c. where it intersects the supply curve. d. at (or very close to) its vertical intercept. e. where it intersects the quantity axis. 6. The price of a good will definitely fall but the new equilibrium quantity could increase, decrease or remain approximately the same when: a. both demand and supply increase. b.
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This test prep was uploaded on 04/07/2008 for the course ECON 198 taught by Professor Sanderson during the Spring '08 term at UChicago.

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Econ_198_Spr_05_Exam__1 - Introduction to Microeconomics...

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