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ECO MID-TERM SAMPLE TEST QUESTIONS

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Question;Sample Multiple Choice;Questions;1. Which of the following is a positive;statement;The President;of the United States ought to be elected by a direct vote of the American;people rather than the Electoral College.Too few adults;can afford to go to college, so tax credits for tuition should be introduced.The economic theory of consumer behavior is founded;on the assumption that consumers prefer more of any good to less.All of the;above.2. Which of the following markets has the;most restrictive geographic boundary;The market for;retail gasoline.The market for housing.The market for;gold.The market for;beef.3. If the actual price were below the;equilibrium price in the market for bread;A surplus would;develop that cannot be eliminated over time.A surplus would;develop, which market forces eliminate over time.A shortage;would develop which market forces would tend to exacerbate.A shortage would develop, which market forces;eliminate over time.4. Tires and automobiles are complementary;goods. As a result, we would expect;the demand;curve for automobiles to shift right when the prices of tires increase.the prices of;automobiles to increase when the supply curve of tires shifts left.the demand curve for automobiles to shift left when;the prices of tires increase.some tires to;be given away with some automobiles.Use;the following diagram to answer the next 2 questions.5. At point A, demand is;perfectly;inelastic.inelastic, but;not completely inelastic.elastic, but;not infinitely elastic.infinitely elastic.6. At point C, demand is;completely;inelastic.inelastic, but;not completely inelastic.unit elastic.elastic, but;not infinitely elastic.7. The assumption of transitive;preferences implies indifference curves must;not cross one another.have a positive;slope.be L-shaped.be convex to;the origin.8. Indifference curves are convex to the;origin because of;transitivity of;consumer preferences.the assumption of a diminishing marginal rate of substitution.the assumption;that more is preferred to less.the assumption;of completeness.9. Alvin?s;preferences for good X and good Y are shown in the diagram below. Based on the;diagram, it can be inferred that;Alvin does not;consider good X as ?good?.Alvin will;never purchase any of good Y.Alvin regards good X and good Y as perfect;substitutes.Alvin regards;good X and good Y as perfect complements.10. A;consumer has $100 per day to spend on product A, which has a unit price of $7;and product B, which has a unit price of $15.;What is the slope of the budget line if good A is on the horizontal axis;and good B is on the vertical axis;-7/15.-7/100-15/7.7/15.11. An individual demand curve can be derived;from which of the following curves;price-consumptionprice-incomeincome-substitutionincome-consumption 12. The curve in the diagram above is called;the;price-consumption curve.the demand;curve.the;income-consumption curve.the Engel curve.13. Which of the following is true concerning;the substitution effect of a decrease in price;It will lead to;an increase in consumption only for a normal good.It always will lead to an increase in consumption.It will lead to;an increase in consumption only for an inferior good.It will lead to;an increase in consumption only for a Giffen good.14. A;consumer?s original utility maximizing market basket of goods is shown in the;diagram above as point A. Following a price change, the consumer?s utility;maximizing market basket changes is at point B. The substitution effect of the;price change in food on the quantity of food purchased is;the change from;F3 to F1.the change from F3 to F2.the change from;F2 to F1.the change from;F1 to F2.15. A;function that indicates the maximum output per unit of time that a firm can;produce, for every combination of inputs with a given technology, is called;an isoquant.a production;possibility curve.a production function.an isocost;function.16. The marginal product of an input is;total product;divided by the amount of the input used to produce this amount of output.the addition to;total output that adds nothing to profit.the addition to;total output due to the addition of one unit of all other inputs.the addition to total output due to the addition of;the last unit of an input, holding all other inputs constant.17. The;rate at which one input can be reduced per additional unit of the other input;while holding output constant, is measured by the;marginal rate;of substitution.marginal rate of technical substitution.slope of the;isocost curve.average product;of the input.

 

Paper#57296 | Written in 18-Jul-2015

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