1. Other things equal, what happens when the price of a good rises?
a. The quantity demanded of the good increases.
b. The supply increases.
c. The quantity supplied of the good rises.
d. The demand curve shifts to the left.
2. Short Ans
1. Assume that a college student spends all of her income on cola and candy bars. The price of a candy
bar is $0.50 and a can of cola costs $0.75. If she has $20 of income, what could she choose to
1.What is a legal maximum price at which a good can be sold?
a. a price floor
b. a price stabilization
c. a price support
d. a price ceiling
2.Refer to Figure 6-1. In which panel in the figure shown would there be a shortage for the prod
L. Di Matteo
Test No. 1
October 13 2014
This test consists of 40 multiple-choice questions. Please select the answer that best
answers each of the following questions and mark your answer on the accompanying
SCANTRON sheet. This test m
1. When can a countrys consumption possibilities frontier be outside its production possibilities frontier?
a. if additional resources become available
b. if there is an increase in the level of technology
c. if the country engages in tr
1. When studying how some event or policy affects a market, on what does elasticity provide
a. the direction and the efficiency of the effect on the market
b. the direction and the magnitude of the effect on the market
1. Suppose that Larry, Moe, and Curly are bidding in an auction for a mint-condition video of Charlie
Chaplin's first movie. Each has in mind a maximum amount that he will bid. What is this maximum
a. resistance price
1. A monopolistically competitive firm's choice of output level is virtually identical to the choice made
by what other type of firm?
a. a perfectly competitive firm
b. a duopolist
c. a monop
1. What is the role that the Competition Act plays in our market economy?
a. It was passed to encourage judicial leniency in the review of cooperative agreements.
b. It was concerned with se
1. Why are drug companies allowed to be monopolists in the drugs they discover?
a. in order to allow drug companies to charge a price that is equal to their marginal cost
b. in order to disc
1. Which of the following is a characteristic of a competitive market?
a. No single buyer or seller can influence the price of the product.
b. There are a small number of sellers.
c. The goo
1. What should be used to analyze economic well-being in an economy?
a. demand and supply
b. producer and consumer surplus
c. government spending and tax revenue
d. equilibrium price and quantity
2. When a tax is levied on a good, which
1. XYZ Corporation produced 300 units of output but sold only 275 of the units it produced. The average
cost of production for each unit of output produced was $100. Each of the 275 units sold was sold