Some advice for using this practice test to study for the mid-term

1. The test is organized like the text. The following index lines up the questions with the
corresponding chapters:
a. Chapter 1 Questions 1 to 10
b. Chapter 2 Questions 11 to 1
c. Chapter ! "e did not do this chapter
d. Chapter # Questions 1$ to !% &'arkets( )e*and( +uppl,-
e. Chapter # Questions !. to &/quilibriu* 0rices and Quantities-
f. Chapter Questions $ to .!
g. Chapter $ Questions .# to 1# &2ust the first half of chapter $ 11! to 12#-
"ithin the chapter questions( the, are ordered b, location in the chapter. 3or exa*ple( if ,ou get
question .! wrong( then ,ou know that the rele4ant *aterial in chapter will be at the end of the
chapter. 5f ,ou *iss question $0( ,ou know the *aterial is in chapter and that it is probabl, near
the beginning of the chapter.
There will be about #0 questions on the *id6ter* &so*e fro* here( so*e fro* ,our quizzes( and
so*e that ha4e not been seen before.-
Tr, taking this re4iew as a ti*ed test to get a feel for pacing. 5 would nor*all, allow about 2 hours
for this test.
Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
____ 1. When a society cannot produce all the goods and services people wish to have, it is said that the economy is
experiencing
a. scarcity.
b. shortages.
c. inefficiencies.
d. inequities.
____ 2. Economics is the study of
a. production methods.
b. how society manages its scarce resources.
c. how households decide who performs which tass.
d. the interaction of business and government.
____ !. " typical society strives to get the most it can from its scarce resources. "t the same time, the society attempts
to distribute the benefits of those resources to the members of the society in a fair manner. #n other words, the
society faces a tradeoff between
a. guns and butter.
b. efficiency and equity.
c. inflation and unemployment.
d. wor and leisure.
____ $. Efficiency means that
a. society is conserving resources in order to save them for the future.
b. society%s goods and services are distributed equally among society%s members.
c. society%s goods and services are distributed fairly, though not necessarily equally, among
society%s members.
d. society is getting the maximum benefits from its scarce resources.
____ &. Economists use the word equity to describe a situation in which
a. each member of society has the same income.
b. each member of society has access to abundant quantities of goods and services,
regardless of his or her income.
c. society is getting the maximum benefits from its scarce resources.
d. the benefits of society%s resources are distributed fairly among society%s members.
____ '. (or most students, the largest single cost of a college education is
a. the wages given up to attend school.
b. tuition, fees, and boos.
c. room and board.
d. transportation, paring, and entertainment.
____ ). (or a college student who wishes to calculate the true costs of going to college, the costs of room and board
a. should be counted in full, regardless of the costs of eating and sleeping elsewhere.
b. should be counted only to the extent that they are more expensive at college than
elsewhere.
c. usually exceed the opportunity cost of going to college.
d. plus the cost of tuition, equals the opportunity cost of going to college.
____ *. +he opportunity cost of an item is
a. the number of hours needed to earn money to buy the item.
b. what you give up to get that item.
c. usually less than the dollar value of the item.
d. the dollar value of the item.
____ ,. +o say that -people respond to incentives- is to say that
a. changes in costs .but not changes in benefits/ influence people%s decisions and their
behavior.
b. changes in benefits .but not changes in costs/ influence people%s decisions and their
behavior.
c. changes in benefits or changes in costs influence people%s decisions and their behavior.
d. tradeoffs can be eliminated by rational people who thin at the margin.
____ 10. 1tan buys a 1,'' 2ustang for 32,000, planning to restore and sell the car. 4e goes on to spend 3*,000
restoring the car. "t this point he can sell the car for 3,,000. "s an alternative, he can spend an additional
3!,000 replacing the engine. With a new engine the car would sell for 312,000. 1tan should
a. complete the repairs and sell the car for 312,000.
b. sell the car now for 3,, 000.
c. never try such an expensive pro5ect again.
d. be indifferent between .i/ selling the car now and .ii/ replacing the engine and then selling
it.
____ 11. 6y scientific method we mean
a. the use of modern electronic testing equipment to understand the world.
b. the dispassionate development and testing of theories about how the world wors.
c. the use of controlled laboratory experiments to understand the way the world wors.
d. finding evidence to support preconceived theories about how the world wors.
____ 12. +he use of theory and observation is more difficult in economics than in sciences such as physics due to the
difficulty in
a. performing an experiment in an economic system.
b. applying mathematical methods to economic analysis.
c. analy7ing available data.
d. formulating theories about economic events.
____ 1!. #n conducting their research, economists face an obstacle that not all scientists face8 specifically, in
economics, it is difficult to
a. mae use of theory and observation.
b. rely upon the scientific method.
c. conduct laboratory experiments.
d. find articles or boos that were written before 1,00.
____ 1$. #n building economic models, economists often omit
a. assumptions.
b. theories.
c. details.
d. equations.
____ 1&. (actors of production are
a. used to produce goods and services.
b. also called output.
c. abundant in most economies.
d. assumed to be owned by firms in the circular9flow diagram.
____ 1'. (or each good produced in a maret economy, the interaction of demand and supply determines
a. the price of the good, but not the quantity.
b. the quantity of the good, but not the price.
c. both the price of the good and the quantity of the good.
d. neither price nor quantity, because prices and quantities are determined by the sellers of
the goods alone.
____ 1). " competitive market is a maret in which
a. an auctioneer helps set prices and arrange sales.
b. there are only a few sellers.
c. the forces of supply and demand do not apply.
d. no individual buyer or seller has any significant impact on the maret price.
____ 1*. "n example of a perfectly competitive maret would be the
a. cable +: maret.
b. soybean maret.
c. new car maret.
d. blue 5ean maret.
____ 1,. ;espite the fact that not all marets are perfectly competitive, the study of perfect competition is worthwhile,
in part because
a. buyers and sellers are price taers in all marets, not 5ust in perfectly competitive marets.
b. buyers find it difficult to buy all they want to buy, and sellers find it difficult to sell all
they want to sell, in all marets, not 5ust in perfectly competitive marets.
c. some degree of competition is present in most marets, not 5ust in perfectly competitive
marets.
d. perfectly competitive marets are the most difficult marets to analy7e, and this maes the
study of other types of marets easy in comparison.
____ 20. Which of the following is not a determinant of demand<
a. the price of a resource that is used to produce the good
b. the price of a complementary good
c. the price of the good next month
d. the price of a substitute good
____ 21. What will happen in the rice maret if buyers are expecting higher rice prices in the near future<
a. +he demand for rice will increase.
b. +he demand for rice will decrease.
c. +he demand for rice will be unaffected.
d. +he supply of rice will increase.
____ 22. " demand schedule is a table showing the relationship between
a. quantity demanded and quantity supplied, and those quantities are usually positively
related.
b. quantity demanded and quantity supplied, and those quantities are usually negatively
related.
c. price and quantity demanded, and those quantities are usually positively related.
d. price and quantity demanded, and those quantities are usually negatively related.
Figure 4-1
____ 2!. Refer to Figure 4-1. +he movement from point " to point 6 on the graph would be caused by
a. an increase in price.
b. a decrease in price.
c. a decrease in the price of a substitute good.
d. an increase in income.
____ 2$. Refer to Figure 4-1. +he movement from point " to point 6 on the graph shows
a. a decrease in demand.
b. an increase in demand.
c. a decrease in quantity demanded.
d. an increase in quantity demanded.
____ 2&. When the number of buyers in a maret increases,
a. the maret demand curve shifts to the right.
b. the demand curves of the individual demanders in the maret are unaffected.
c. the maret demand for the good in question increases.
d. "l of the above are correct.
____ 2'. Which of the following events could shift the demand curve for gasoline to the left<
a. #ncome of gasoline buyers rises, and gasoline is a normal good.
b. #ncome of gasoline buyers falls, and gasoline is an inferior good.
c. =ublic service announcements are run on television, encouraging people to wal or ride
bicycles instead of driving cars.
d. +he price of gasoline rises.
____ 2). "n increase in the number of college scholarships issued by private foundations would
a. increase the supply of education.
b. decrease the supply of education.
c. increase the demand for education.
d. decrease the demand for education.
____ 2*. When quantity demanded decreases at every possible price, we now that the demand curve has
a. shifted to the left.
b. shifted to the right.
c. not shifted8 rather, we have moved down the demand curve to a new point on the same
curve.
d. not shifted8 rather, the demand curve has become flatter.
Figure 4-3
____ 2,. Refer to Figure 4-3. +he graph shows the demand for cigarettes. +he arrows are consistent with which of the
following events<
a. +he price of mari5uana, a complement to cigarettes, increased.
b. 2andatory health warnings were placed on cigarette pacages.
c. 1everal foreign countries banned >.1. cigarettes in their countries.
d. " tax was placed on cigarettes.
____ !0. Refer to Figure 4-3. +he graph shows the demand for cigarettes. +he arrows are consistent with which of the
following events<
a. +obacco and mari5uana are complements and the price of mari5uana decreased.
b. +obacco is a ?gateway drug@ and the price of mari5uana increased.
c. +he price of cigarettes increased.
d. +he arrows are consistent with all of these events.
____ !1. Which of the following events would cause a movement upward and to the right along the supply curve for
tomatoes<
a. +he number of sellers of tomatoes increases.
b. +here is an advance in technology that reduces the cost of producing tomatoes.
c. +he price of fertili7er decreases, and fertili7er is an input in the production of tomatoes.
d. +he price of tomatoes rises.
____ !2. Which of the following events could cause an increase in the supply of ceiling fans<
a. +he number of sellers of ceiling fans increases.
b. +here is an increase in the price of air conditioners, and consumers regard air conditioners
and ceiling fans as substitutes.
c. +here is an increase in the price of the motor that powers ceiling fans.
d. "ll of the above are correct.
____ !!. (or a seller, which of the following quantities are not positively related<
a. the price of the good and the seller%s profit
b. the price of the good and quantity supplied
c. the seller%s profit and production costs
d. the seller%s profit and quantity supplied
____ !$. +he positive relationship between price and quantity supplied is called
a. profit.
b. a change in supply.
c. a shift of the supply curve.
d. the law of supply.
____ !&. Aead is an important input in the production of crystal. #f the price of lead decreases, other things equal, we
would expect the supply of
a. crystal to be unaffected.
b. crystal to decrease.
c. crystal to increase.
d. lead to increase.
____ !'. #f car manufacturers begin utili7ing new labor9saving technology on their assembly lines, we would not
expect
a. a smaller quantity of labor to be used.
b. the supply of cars to increase.
c. costs to the firm to fall.
d. individual car manufacturers to move up and to the right along their individual supply
curves.
____ !). #f suppliers expect the price of their product to fall in the future they will
a. decrease supply now.
b. increase supply now.
c. decrease supply in the future but not now.
d. increase supply in the future but not now.
Figure 4-7
____ !*. Refer to Figure 4-7. Equilibrium price and quantity are, respectively,
a. 3!& and 200.
b. 3!& and '00.
c. 32& and $00.
d. 31& and 200.
____ !,. Refer to Figure 4-7. "t a price of 3!&,
a. there would be a shortage of $00 units.
b. there would be a surplus of 200 units.
c. there would be a surplus of $00 units.
d. there would be an excess supply of 200 units.
____ $0. " surplus exists in a maret if
a. there is an excess demand for the good.
b. the situation is such that the law of supply and demand would predict an increase in the
price of the good from its current level.
c. the current price is above its equilibrium price.
d. Bone of the above is correct.
Figure 4-10
____ $1. Refer to Figure 4-10. Which of the four graphs represents the maret for peanut butter after a ma5or
hurricane hits the peanut9growing south<
a. "
b. 6
c. C
d. ;
____ $2. Refer to Figure 4-10. Which of the four graphs represents the maret for winter coats as we progress from
winter to spring<
a. "
b. 6
c. C
d. ;
____ $!. Refer to Figure 4-10. Which of the four graphs represents the maret for pi77a delivery in a college town as
we go from summer to the beginning of the fall semester<
a. "
b. 6
c. C
d. ;
____ $$. Refer to Figure 4-10. Which of the four graphs represents the maret for cars as a result of the adoption of
new technology on assembly lines<
a. "
b. 6
c. C
d. ;
____ $&. Refer to Figure 4-10. Draph " shows which of the following<
a. an increase in demand and an increase in quantity supplied
b. an increase in demand and an increase in supply
c. an increase in quantity demanded and an increase in quantity supplied
d. an increase in supply and an increase in quantity demanded
____ $'. Refer to Figure 4-10. Draph C shows which of the following<
a. an increase in demand and an increase in quantity supplied
b. an increase in demand and an increase in supply
c. an increase in quantity demanded and an increase in quantity supplied
d. an increase in supply and an increase in quantity demanded
____ $). Refer to Figure 4-10. Which of the four graphs illustrates an increase in quantity supplied<
a. ".
b. 6.
c. C.
d. ;.
____ $*. Refer to Figure 4-10. Which of the four graphs illustrates a decrease in quantity demanded<
a. ".
b. 6.
c. C.
d. ;.
____ $,. Refer to Figure 4-10. 1uppose the events depicted in graphs " and C were illustrated together on a single
graph. " definitive result of the two events would be
a. an increase in the equilibrium quantity.
b. an increase in the equilibrium price.
c. an instance in which the law of demand fails to hold.
d. "ll of the above are correct.
____ &0. Which of the following events would result in an increase in equilibrium price and an ambiguous change in
equilibrium quantity<
a. an increase in supply and an increase in demand
b. an increase in supply and a decrease in demand
c. a decrease in supply and an increase in demand
d. a decrease in supply and a decrease in demand
____ &1. Bew oa tables are normal goods. What would happen to the equilibrium price and quantity in the maret for
oa tables if the price of maple tables rises, the price of oa wood rises, more buyers enter the maret for oa
tables and the price of wood saws increased<
a. =rice will fall and the effect on quantity is ambiguous.
b. =rice will rise and the effect on quantity is ambiguous.
c. Euantity will fall and the effect on price is ambiguous.
d. Euantity will rise and the effect on price is ambiguous.
____ &2. What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises, the price of
steel rises, public transportation becomes cheaper and more comfortable, and auto9worers negotiate higher
wages<
a. =rice will fall and the effect on quantity is ambiguous.
b. =rice will rise and the effect on quantity is ambiguous.
c. Euantity will fall and the effect on price is ambiguous.
d. Euantity will rise and the effect on price is ambiguous.
____ &!. 1uppose the incomes of buyers in a maret for a particular normal good decrease and there is also a reduction
in input prices. What would we expect to occur in this maret<
a. +he equilibrium price would increase, but the impact on the amount sold in the maret
would be ambiguous.
b. +he equilibrium price would decrease, but the impact on the amount sold in the maret
would be ambiguous.
c. 6oth equilibrium price and equilibrium quantity would increase.
d. Equilibrium quantity would increase, but the impact on equilibrium price would be
ambiguous.
____ &$. +he signals that guide the allocation of resources in a maret economy are
a. surpluses and shortages.
b. quantities.
c. property rights.
d. prices.
____ &&. #n a free maret system, what coordinates the actions of millions of people with their varying abilities and
desires<
a. producers
b. prices
c. consumers
d. the government
____ &'. #n general, elasticity is a measure of
a. the extent to which advances in technology are adopted by producers.
b. the extent to which a maret is competitive.
c. how fast the price of a good responds to a shift of the supply curve or demand curve.
d. how much buyers and sellers respond to changes in maret conditions.
____ &). ;emand is said to be inelastic if
a. buyers respond substantially to changes in the price of the good.
b. demand shifts only slightly when the price of the good changes.
c. the quantity demanded changes only slightly when the price of the good changes.
d. the price of the good responds only slightly to changes in demand.
____ &*. #f demand is inelastic, then
a. buyers do not respond much to a change in price.
b. buyers respond substantially to a change in price, but the response is very slow.
c. buyers do not alter their quantities demanded much in response to advertising, fads, or
general changes in tastes.
d. the demand curve is very flat.
____ &,. #f a person only occasionally buys a cup of coffee, his demand for coffee is probably
a. represented by a vertical or nearly9vertical demand curve.
b. not easily represented by a demand schedule or demand curve.
c. inelastic.
d. elastic.
____ '0. When the price of bubble gum is 30.&0, the quantity demanded is $00 pacs per day. When the price falls to
30.$0, the quantity demanded increases to '00. Diven this information and using the midpoint method, we
now that the demand for bubble gum is
a. inelastic.
b. elastic.
c. unit elastic.
d. perfectly inelastic.
____ '1. #f the price elasticity of demand for a good is 0.,$, then which of the following events is consistent with a $
percent decrease in the quantity of the good demanded<
a. a 0.2!& percent increase in the price of the good
b. a 2.!&0 percent increase in the price of the good
c. a !.)'0 percent increase in the price of the good
d. a $.2&& percent increase in the price of the good
____ '2. When the price of a good is 3&, the quantity demanded is 100 units per month8 when the price is 3), the
quantity demanded is *0 units per month. >sing the midpoint method, the price elasticity of demand is about
a. 0.22.
b. 0.').
c. 1.!!.
d. 1.&0.
____ '!. ;emand is said to have unit elasticity if elasticity is
a. less than 1.
b. greater than 1.
c. equal to 1.
d. equal to 0.
Figure 5-1
____ '$. Refer to Figure 5-1. "ssume the section of the demand curve labeled " corresponds to prices between 3' and
312. +hen, when the price increases from 3* to 310,
a. the percent decrease in the quantity demanded exceeds the percent increase in the price.
b. the percent increase in the price exceeds the percent decrease in the quantity demanded.
c. sellersF total revenue increases as a result.
d. it is possible that the quantity demanded fell from &&0 to &00 as a result.
Figure 5-2
____ '&. Refer to Figure 5-2. #f the price decreased from 31* to 3',
a. total revenue would increase by 31,200 and demand is elastic between points " and C.
b. total revenue would increase by 3*00 and demand is elastic between points " and C.
c. total revenue would decrease by 31,200 and demand is inelastic between points " and C.
d. total revenue would decrease by 3*00 and demand is inelastic between points " and C.
____ ''. ;emand is said to be inelastic if the
a. quantity demanded changes proportionately more than price.
b. price changes proportionately more than income.
c. quantity demanded changes proportionately less than price.
d. quantity demanded changes proportionately the same as price.
____ '). Gn a downward9sloping linear demand curve, total revenue reaches its maximum value at the
a. midpoint of the demand curve.
b. lower end of the demand curve.
c. upper end of the demand curve.
d. #t is impossible to tell without nowing prices and quantities demanded.
Figure 5-5
____ '*. Refer to Figure 5-5. When the price is 3!0, total revenue is
a. 3!,000.
b. 3&,000.
c. 3),000.
d. 3,,000.
____ ',. Refer to Figure 5-5. "n increase in price from 320 to 3!0 would
a. increase total revenue by 32,000.
b. decrease total revenue by 32,000.
c. increase total revenue by 31,000.
d. decrease total revenue by 31,000.
____ )0. Refer to Figure 5-5. "n increase in price from 3!0 to 3!& would
a. increase total revenue by 32&0
b. decrease total revenue by 32&0.
c. increase total revenue by 3&00.
d. decrease total revenue by 3&00.
____ )1. #f the demand curve is linear and downward sloping, which of the following statements is not correct<
a. ;emand is more elastic on the lower part of the demand curve than on the upper part.
b. ;ifferent pairs of points on the demand curve can result in different values of the price
elasticity of demand.
c. ;ifferent pairs of points on the demand curve cannot result in different values of the slope
of the demand curve.
d. 1tarting from a point on the upper part of the demand curve, an increase in price leads to a
decrease in total revenue.
____ )2. 6arb%s 6aery earned 3200 in total revenue last month when it sold 100 loaves of bread. +his month it earned
3!00 in total revenue when it sold '0 loaves of bread. +he price elasticity of demand for 6arb%s bread is
a. 0.2).
b. 0.&*.
c. 1.2&.
d. 1.)1.
____ )!. Aast year, 1heila bought ' pairs of shoes when her income was 3$0,000. +his year, her income is 3&2,000 and
she purchased ) pairs of shoes. 4olding other factors constant and using the midpoint method, it follows that
1heilaFs income elasticity of demand is about
a. 0.&, and 1heila regards shoes as an inferior good.
b. 0.&, and 1heila regards shoes as a normal good.
c. 1.) and 1heila regards shoes as an inferior good.
d. 1.) and 1heila regards shoes as a normal good.
____ )$. Hour younger sister needs 3&0 to buy a new bie. 1he has opened a lemonade stand to mae the money she
needs. 1he currently is charging 2& cents per cup, but she wants to ad5ust her price to earn the 3&0 faster. #f
you now that the demand for lemonade is elastic, what is your advice to her<
a. Aeave the price at 2& cents and be patient.
b. Iaise the price to increase total revenue.
c. Aower the price to increase total revenue.
d. +here isn%t enough information given to answer this question.
____ )&. #f an increase in income results in a decrease in the quantity demanded of a good, then for that good,
a. the cross9price elasticity of demand is negative.
b. the price elasticity of demand is negative.
c. the income elasticity of demand is negative.
d. an increase in the maret supply will increase the equilibrium price of the good.
____ )'. (or which of the following types of goods would the income elasticity of demand be positive and relatively
large<
a. all inferior goods
b. all normal goods
c. goods for which there are many good complements
d. luxuries
____ )). Cross9price elasticity of demand measures how
a. the price of one good changes in response to a change in the price of another good.
b. the quantity demanded of one good changes in response to a change in the quantity
demanded of another good.
c. the quantity demanded of one good changes in response to a change in the price of another
good.
d. strongly normal or inferior a good is.
____ )*. +he cross9price elasticity of demand can tell us whether goods are
a. normal or inferior.
b. elastic or inelastic.
c. luxuries or necessities.
d. complements or substitutes.
____ ),. (ood and clothing tend to have
a. small income elasticities because consumers, regardless of their incomes, choose to buy
relatively constant quantities of these goods.
b. small income elasticities because consumers buy proportionately more of both goods at
higher income levels than they buy at low income levels.
c. large income elasticities because they are necessities.
d. large income elasticities because they are relatively inexpensive.
____ *0. #f the quantity supplied responds only slightly to changes in price, then
a. supply is said to be elastic.
b. supply is said to be inelastic.
c. an increase in price will not shift the supply curve very much.
d. even a large decrease in demand will change the equilibrium price only slightly.
____ *1. Which of the following statements is not valid when supply is perfectly elastic<
a. +he elasticity of supply approaches infinity.
b. +he supply curve is hori7ontal.
c. :ery small changes in price lead to large changes in quantity supplied.
d. +he time period under consideration is more liely a short period rather than a long period.
____ *2. " decrease in supply will cause the largest increase in price when
a. both supply and demand are inelastic.
b. both supply and demand are elastic.
c. demand is elastic and supply is inelastic.
d. demand is inelastic and supply is elastic.
____ *!. " decrease in supply will cause the smallest increase in price when
a. both supply and demand are inelastic.
b. demand is elastic and supply is inelastic.
c. both supply and demand are elastic.
d. demand is inelastic and supply is elastic.
____ *$. +he presence of price controls in a maret usually is an indication that
a. an insufficient quantity of a good or service was being produced in that maret to meet the
publicFs need.
b. the usual forces of supply and demand were not able to establish an equilibrium price in
that maret.
c. policymaers believed that the price that prevailed in that maret in the absence of price
controls was unfair to buyers or sellers.
d. policymaers correctly believed that, in that maret, price controls would generate no
inequities of their own.
____ *&. " legal maximum price at which a good can be sold is a price
a. floor.
b. stabili7ation.
c. support.
d. ceiling.
____ *'. " price ceiling is binding when it is set
a. above the equilibrium price, causing a shortage.
b. above the equilibrium price, causing a surplus.
c. below the equilibrium price, causing a shortage.
d. below the equilibrium price, causing a surplus.
____ *). "n example of a price floor is
a. the regulation of gasoline prices in the >.1. in the 1,)0s.
b. rent control.
c. the minimum wage.
d. any restriction on price that leads to a shortage.
Figure 6-3
____ **. Refer to Figure 6-3. #n panel .b/, with the price floor in effect, there will be
a. a shortage of wheat.
b. equilibrium in the maret.
c. a surplus of wheat.
d. an excess demand for wheat.
Figure 6-4
____ *,. Refer to Figure 6-4. 1uppose a price ceiling of 3$.&0 is imposed. "s a result,
a. there is a shortage of 1& units of the good.
b. the demand curve will shift to the left so as to now pass through the point .E J !&, = J
3$.&0/.
c. the situation is very much lie the one created by a binding minimum wage.
d. the quantity of the good that is bought and sold is the same as it would have been had a
price floor of 3).&0 been imposed.
Figure 6-6
____ ,0. Refer to Figure 6-6. When the price ceiling applies in this maret and the supply curve for gasoline shifts
from 11 to 12,
a. the price will increase to =!.
b. a surplus will occur at the new maret price of =2.
c. the maret price will stay at =1 due to the price ceiling.
d. a shortage will occur at the price ceiling of =2.
____ ,1. >nder rent control, tenants can expect
a. lower rent and higher quality housing.
b. lower rent and lower quality housing.
c. higher rent and a shortage of rental housing.
d. higher rent and a surplus of rental housing.
____ ,2. Which of the following is a correct statement about the labor maret<
a. Worers determine the supply of labor, and firms determine the demand for labor.
b. Worers determine the demand for labor, and firms determine the supply of labor.
c. Worers determine the supply of labor, and government determines the demand for labor.
d. +he forces of supply and demand, while present in the labor maret, have nothing to
balance in that maret.
____ ,!. "t a minimum wage that exceeds the equilibrium wage,
a. the quantity demanded of labor will exceed the quantity supplied.
b. the quantity supplied of labor will exceed the quantity demanded.
c. the minimum wage will not be binding.
d. the maret for silled worers is affected, but the maret for unsilled worers remains
unaffected.
____ ,$. Which of the following is the most correct statement about price controls<
a. =rice controls always help those they are designed to help.
b. =rice controls never help those they are designed to help.
c. =rice controls often hurt those they are designed to help.
d. =rice controls always hurt those they are designed to help.
Review Mid-term
A!wer "ectio
M#$%&'$( C)*&C(
1. "B1K " ;#(K 2 IE(K 190 +G=K 1carcity
21CK #nterpretive
2. "B1K 6 ;#(K 1 IE(K 190 +G=K Economies, 1carcity
21CK ;efinitional
!. "B1K 6 ;#(K 1 IE(K 191 +G=K Efficiency, Equity
21CK #nterpretive
$. "B1K ; ;#(K 1 IE(K 191 +G=K Efficiency
21CK ;efinitional
&. "B1K ; ;#(K 2 IE(K 191 +G=K Equity
21CK #nterpretive
'. "B1K " ;#(K 2 IE(K 191 +G=K Gpportunity cost
21CK #nterpretive
). "B1K 6 ;#(K 2 IE(K 191 +G=K Gpportunity cost
21CK "pplicative
*. "B1K 6 ;#(K 1 IE(K 191 +G=K Gpportunity cost
21CK ;efinitional
,. "B1K C ;#(K 1 IE(K 191 +G=K #ncentives
21CK ;efinitional
10. "B1K ; ;#(K ! IE(K 191 +G=K 2arginal cost
21CK "nalytical
11. "B1K 6 ;#(K 2 IE(K 291 +G=K 1cientific method
21CK ;efinitional
12. "B1K " ;#(K 2 IE(K 291 +G=K 1cientific method
21CK #nterpretive
1!. "B1K C ;#(K 1 IE(K 291 +G=K 1cientific method
21CK ;efinitional
1$. "B1K C ;#(K 1 IE(K 291 +G=K Economic models
21CK #nterpretive
1&. "B1K " ;#(K 2 IE(K 291 +G=K (actors of production
21CK #nterpretive
1'. "B1K C ;#(K 2 IE(K $91 +G=K 2aret economy
21CK #nterpretive
1). "B1K ; ;#(K 1 IE(K $91 +G=K Competitive marets
21CK ;efinitional
1*. "B1K 6 ;#(K 2 IE(K $91 +G=K =erfect competition
21CK #nterpretive
1,. "B1K C ;#(K 2 IE(K $91 +G=K =erfect competition
21CK #nterpretive
20. "B1K " ;#(K 2 IE(K $92 +G=K ;emand
21CK #nterpretive
21. "B1K " ;#(K 2 IE(K $92 +G=K Expectations
21CK #nterpretive
22. "B1K ; ;#(K 2 IE(K $92
+G=K ;emand schedule, Begative relationshipss 21CK #nterpretive
2!. "B1K 6 ;#(K 1 IE(K $92 +G=K ;emand curve
21CK #nterpretive
2$. "B1K ; ;#(K 1 IE(K $92 +G=K ;emand curve
21CK #nterpretive
2&. "B1K ; ;#(K 2 IE(K $92 +G=K #ndividual demand, 2aret demand
21CK #nterpretive
2'. "B1K C ;#(K 2 IE(K $92 +G=K 1hifts of curves
21CK #nterpretive
2). "B1K C ;#(K 2 IE(K $92 +G=K ;emand
21CK "pplicative
2*. "B1K " ;#(K 2 IE(K $92 +G=K ;emand
21CK #nterpretive
2,. "B1K ; ;#(K ! IE(K $92 +G=K ;emand curve
21CK "pplicative
!0. "B1K C ;#(K ! IE(K $92 +G=K ;emand curve
21CK "pplicative
!1. "B1K ; ;#(K 1 IE(K $9! +G=K 1upply curve
21CK #nterpretive
!2. "B1K " ;#(K 2 IE(K $9! +G=K 1hifts of curves
21CK #nterpretive
!!. "B1K C ;#(K 2 IE(K $9! +G=K 1upply, =ositive relationships
21CK "pplicative
!$. "B1K ; ;#(K 1 IE(K $9! +G=K Aaw of supply
21CK ;efinitional
!&. "B1K C ;#(K 2 IE(K $9! +G=K 1upply, #nputs
21CK "pplicative
!'. "B1K ; ;#(K 2 IE(K $9! +G=K #ndividual supply, +echnology
21CK "pplicative
!). "B1K 6 ;#(K 2 IE(K $9! +G=K 1upply, Expectations
21CK #nterpretive
!*. "B1K C ;#(K 1 IE(K $9$ +G=K Equilibrium
21CK #nterpretive
!,. "B1K C ;#(K 2 IE(K $9$ +G=K 1urpluses
21CK #nterpretive
$0. "B1K C ;#(K 2 IE(K $9$ +G=K 1urpluses
21CK #nterpretive
$1. "B1K ; ;#(K 2 IE(K $9$ +G=K Equilibrium, 1hifts of curves
21CK "pplicative
$2. "B1K 6 ;#(K 2 IE(K $9$ +G=K Equilibrium, 1hifts of curves
21CK "pplicative
$!. "B1K " ;#(K 2 IE(K $9$ +G=K Equilibrium, 1hifts of curves
21CK "pplicative
$$. "B1K C ;#(K 2 IE(K $9$ +G=K Equilibrium, 1hifts of curves
21CK "pplicative
$&. "B1K " ;#(K 2 IE(K $9$ +G=K ;emand, Euantity supplied
21CK "pplicative
$'. "B1K ; ;#(K 2 IE(K $9$ +G=K 1upply, Euantity demanded
21CK "pplicative
$). "B1K " ;#(K 2 IE(K $9$ +G=K Euantity supplied
21CK "pplicative
$*. "B1K ; ;#(K 2 IE(K $9$ +G=K Euantity demanded
21CK "pplicative
$,. "B1K " ;#(K 2 IE(K $9$ +G=K Equilibrium, ;emand, 1upply
21CK "pplicative
&0. "B1K C ;#(K 2 IE(K $9$ +G=K Equilibrium, ;emand, 1upply
21CK "pplicative
&1. "B1K 6 ;#(K ! IE(K $9$ +G=K Equilibrium, ;emand, 1upply
21CK "nalytical
&2. "B1K C ;#(K ! IE(K $9$ +G=K Equilibrium, ;emand, 1upply
21CK "nalytical
&!. "B1K 6 ;#(K 2 IE(K $9$ +G=K Equilibrium, ;emand, 1upply
21CK "pplicative
&$. "B1K ; ;#(K 1 IE(K $9& +G=K Iesource allocation, =rices
21CK #nterpretive
&&. "B1K 6 ;#(K 1 IE(K $9& +G=K Iesource allocation, =rices
21CK #nterpretive
&'. "B1K ; ;#(K 1 IE(K &90 +G=K Elasticity
21CK ;efinitional
&). "B1K C ;#(K 2 IE(K &91 +G=K #nelastic demand
21CK ;efinitional
&*. "B1K " ;#(K 2 IE(K &91 +G=K #nelastic demand
21CK ;efinitional
&,. "B1K ; ;#(K 2 IE(K &92 +G=K =rice elasticity of demand
21CK #nterpretive
'0. "B1K 6 ;#(K 2 IE(K &91
+G=K =rice elasticity of demand, 2idpoint method 21CK "pplicative
'1. "B1K ; ;#(K 2 IE(K &91 +G=K =rice elasticity of demand
21CK "pplicative
'2. "B1K 6 ;#(K 1 IE(K &91 +G=K =rice elasticity of demand
21CK "pplicative
'!. "B1K C ;#(K 1 IE(K &91 +G=K =rice elasticity of demand
21CK ;efinitional
'$. "B1K " ;#(K ! IE(K &91 +G=K Elastic demand
21CK "pplicative
'&. "B1K " ;#(K 2 IE(K &91
+G=K =rice elasticity of demand, +otal revenue 21CK "pplicative
''. "B1K C ;#(K 2 IE(K &91 +G=K #nelastic demand
21CK ;efinitional
'). "B1K " ;#(K ! IE(K &91 +G=K +otal revenue, ;emand curve
21CK "nalytical
'*. "B1K ; ;#(K 1 IE(K &91 +G=K +otal revenue
21CK #nterpretive
',. "B1K C ;#(K 2 IE(K &91 +G=K +otal revenue
21CK "pplicative
)0. "B1K 6 ;#(K 2 IE(K &91 +G=K +otal revenue
21CK "pplicative
)1. "B1K " ;#(K ! IE(K &91
+G=K =rice elasticity of demand, +otal revenue 21CK "nalytical
)2. "B1K 6 ;#(K ! IE(K &91
+G=K =rice elasticity of demand, +otal revenue 21CK "pplicative
)!. "B1K 6 ;#(K 2 IE(K &91
+G=K #ncome elasticity of demand, Bormal goods 21CK "pplicative
)$. "B1K C ;#(K 2 IE(K &91 +G=K Elastic demand, +otal revenue
21CK "pplicative
)&. "B1K C ;#(K 2 IE(K &91 +G=K #ncome elasticity of demand
21CK #nterpretive
)'. "B1K ; ;#(K 2 IE(K &91 +G=K #ncome elasticity of demand
21CK #nterpretive
)). "B1K C ;#(K 2 IE(K &91 +G=K Cross9price elasticity of demand
21CK ;efinitional
)*. "B1K ; ;#(K 2 IE(K &91 +G=K Cross9price elasticity of demand
21CK #nterpretive
),. "B1K " ;#(K 2 IE(K &91 +G=K #ncome elasticity of demand
21CK "pplicative
*0. "B1K 6 ;#(K 2 IE(K &92 +G=K =rice elasticity of supply
21CK #nterpretive
*1. "B1K ; ;#(K ! IE(K &92 +G=K =erfectly elastic supply
21CK "pplicative
*2. "B1K " ;#(K ! IE(K &9!
+G=K =rice elasticity of demand, =rice elasticity of supply 21CK "nalytical
*!. "B1K C ;#(K ! IE(K &9!
+G=K =rice elasticity of demand, =rice elasticity of supply 21CK "nalytical
*$. "B1K C ;#(K 2 IE(K '90 +G=K =rice ceilings, =rice floors
21CK #nterpretive
*&. "B1K ; ;#(K 1 IE(K '91 +G=K =rice ceilings
21CK ;efinitional
*'. "B1K C ;#(K 2 IE(K '91 +G=K =rice ceilings, 1hortages
21CK #nterpretive
*). "B1K C ;#(K 1 IE(K '91 +G=K =rice ceilings, =rice floors
21CK ;efinitional
**. "B1K C ;#(K 2 IE(K '91 +G=K =rice floors, 1urpluses
21CK "pplicative
*,. "B1K ; ;#(K ! IE(K '91 +G=K =rice ceilings
21CK "nalytical
,0. "B1K ; ;#(K 2 IE(K '91 +G=K =rice ceilings, 1hortages
21CK "pplicative
,1. "B1K 6 ;#(K 2 IE(K '91 +G=K Ient control
21CK #nterpretive
,2. "B1K " ;#(K 1 IE(K '91 +G=K Aabor demand, Aabor supply
21CK #nterpretive
,!. "B1K 6 ;#(K 2 IE(K '91 +G=K 2inimum wage, 1urpluses
21CK #nterpretive
,$. "B1K C ;#(K 2 IE(K '91 +G=K =rice ceilings, =rice floors
21CK #nterpretive