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 auto-
workers negotiate higher wages? (1 Điểm)
a/ Price will fall, and the effect on quantity is ambiguous.
b/ Quantity will rise, and the effect on price is ambiguous.
c/ Price will rise, and the effect on quantity is ambiguous.
d/ Quantity will fall, and the effect on price is ambiguous.

A competitive market is a market in which (1 Điểm)

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 market price.

A minimum wage that is set above a market's equilibrium wage will result in (1 Điểm)
a/ an excess demand for labor, that is, unemployment.
b/ an excess supply of labor, that is, unemployment.
c/ an excess demand for labor, that is, a shortage of workers.
d/ an excess supply of labor, that is, a shortage of workers.

Pizza is a normal good if the demand (1 Điểm)

a/ for pizza rises when income rises.
b/ for pizza rises when the price of pizza falls.
c/ curve for pizza shifts to the right when the price of burritos rises, assuming pizza and burritos
are substitutes.
d/Curve for pizza slopes upward.

Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the
federal government increases the minimum wage by $1.00 per hour, then it is likely that the
(1 Điểm)
a/ supply of bicycles will shift to the left.
b/firm must increase output to maintain profit levels.
c/demand for bicycle assembly workers will increase.
d/supply of bicycles will shift to the right.

Suppose the number of buyers in a market increases and a technological advancement

occurs also. What would we expect to happen in the market? (1 Điểm)
a/ Equilibrium quantity would decrease, but the impact on equilibrium price would be
ambiguous.
b/ Equilibrium price would increase, but the impact on equilibrium quantity would be
ambiguous.
c/ Equilibrium price would decrease, but the impact on equilibrium quantity would be
ambiguous.
d/ Equilibrium quantity would increase, but the impact on equilibrium price would be
ambiguous.
Which of the following events would cause both the equilibrium price and equilibrium quantity
of number two grade potatoes to increase if number two grade potatoes are an inferior good? (1
Điểm)
a/ An increase in consumer income
b/ A decrease in consumer income
c/ Greater government restrictions on agricultural chemicals
d/ Fewer government restrictions on agricultural chemicals

Which of the following events would unambiguously cause a decrease in the equilibrium price of
cotton shirts? (1 Điểm)
a/ A decrease in the price of wool shirts and a decrease in the price of raw cotton
b/ An increase in the price of wool shirts and an increase in the price of raw cotton
c/ An increase in the price of wool shirts and a decrease in the price of raw cotton
d/ A decrease in the price of wool shirts and an increase in the price of raw cotton

What would happen to the equilibrium price and quantity of smartphones if consumers' incomes
rise and smartphones are a normal good? (1 Điểm)
a/ The equilibrium price would increase, and the equilibrium quantity would decrease.
b/ Both the equilibrium price and quantity would increase.
c/ Both the equilibrium price and quantity would decrease.
d/ The equilibrium price would decrease, and the equilibrium quantity would increase.

The line that relates the price of a good and the quantity demanded of that good is called the
demand (1 Điểm)
a. schedule, and it usually slopes upward.
b. schedule, and it usually slopes downward.
c. curve, and it usually slopes downward.
d. curve, and it usually slopes upward.

A group of buyers and sellers of a particular good or service is called a(n) (1 Điểm)
a. economy.
b. competition.
c. market.
d. coalition.

Which of the following changes would not shift the demand curve for a good or service? (1
Điểm)
a. A change in the price of the good or service.
b. A change in expectations about the future price of the good or service.
c. A change in the price of a related good or service.
d. A change in income.

The price elasticity of demand measures (1 Điểm)

a/ buyers' responsiveness to a change in the price of a good.
b/ the extent to which demand increases as additional buyers enter the market.
c/ how much more of a good consumers will demand when incomes rise.
d/ the movement along a supply curve when there is a change in demand.

Using the midpoint method, the price elasticity of demand for a good is computed to be
approximately 1.45. Which of the following events is consistent with a 20 percent decrease in the
quantity of the good demanded? (1 Điểm)
a. An increase of 29.0 percent in the price of the good
b. An increase of 13.79 percent in the price of the good
c. An increase in the price of the good from $29.00 to $20
d.An increase in the price of the good from $20 to $49.00

Suppose that gasoline prices increase dramatically this month. Kaliah commutes 100 miles to wo
rk each weekday.Over the next few months, Kaliah drives less on the weekends to try to save mo
ney.Within the year, she sells her home and purchases one only 10 miles from her place of emplo
yment. These examples illustrate the importance of (1 Điểm)

a. the time horizon in determining the price elasticity of demand.

b. the availability of close substitutes in determining the price elasticity of demand.
c. a necessity versus a luxury in determining the price elasticity of demand.
d. the definition of a market in determining the price elasticity of demand.

Which of the following is likely to have the most price inelastic demand? (1 Điểm)
a. White chocolate chip with macadamia nut cookies
b. Cookies
c. Mrs. Field's chocolate chip cookies
d. Milk chocolate chip cookies

If the price elasticity of demand for a good is 5, then a 10 percent increase in price results in a (1
Điểm)
a. 0.50 percent decrease in the quantity demanded.
b. 2.00 percent decrease in the quantity demanded.
c. 50.00 percent decrease in the quantity demanded.
d. 100.00 percent decrease in the quantity demanded.

When the price of good A is $50, the quantity demanded of good A is 500 units. When the price
of good A rises to $70, the quantity demanded of good A falls to 400 units. Using the midpoint
method, the price elasticity of demand for good A is (1 Điểm)
a. 1.50, and an increase in price will result in an increase in total revenue for good A.
b. 1.50, and an increase in price will result in a decrease in total revenue for good A.
c. 0.67, and an increase in price will result in an increase in total revenue for good A.
d. 0.67, and an increase in price will result in a decrease in total revenue for good A.

Your younger sister needs $50 to buy a new bike. She has opened a lemonade stand to make the
money she needs. Your mother is paying for all of the ingredients. She currently is charging 25
cents per cup, but she wants to adjust her price to earn the $50 faster. If you know that the
demand for lemonade is elastic, what is your advice to her? (1 Điểm)
A. Leave the price at 25 cents and be patient.
b. Raise the price to increase total revenue.
c. Lower the price to increase total revenue.
d. There isn't enough information given to answer this question.

Income elasticity of demand measures how (1 Điểm)

a. the quantity demanded changes as consumer income changes.
b. consumer purchasing power is affected by a change in the price of a good.
c. the price of a good is affected when there is a change in consumer income.
d.many units of a good a consumer can buy given a certain income level.

For which of the following goods is the income elasticity of demand likely lowest? (1 Điểm)
a. Water
b. Pineapples
c. Sapphire pendant necklaces
d. Yachts

Which of the following is a necessary characteristic of a monopoly? (1 Điểm)

a. The firm is the sole seller of its product
b. The firm's product has many close substitutes.
c. The firm generates a large economic profit.
d. The firm is located in a small geographic market.

If the distribution of water is a natural monopoly, then (1 Điểm)

a. a single firm cannot serve the market at the lowest possible average total cost.
b. allowing for competition among different firms in the water-distribution industry is efficient.
c. multiple firms would likely each have to pay large fixed costs to develop their own network of
pipes.
d. average cost increases as the quantity of water produced increases.

The profit-maximization problem for a monopolist differs from that of a competitive firm in
which of the following ways? (1 Điểm)
a. A competitive firm maximizes profit at the point where marginal revenue equals marginal cost;
a monopolist maximizes profit at the point where marginal revenue exceeds marginal cost.
b. For a profit-maximizing competitive firm, thinking at the margin is much more important than
it is for a profit-maximizing monopolist.
c. A competitive firm maximizes profit at the point where average revenue equals marginal cost;
a monopolist maximizes profit at the point where average revenue exceeds marginal cost.
d. For a competitive firm, marginal revenue at the profit-maximizing level of output is equal to
marginal revenue at all other levels of output; for a monopolist, marginal revenue at the profit-
maximizing level of output is smaller than it is for larger levels of output.
=> Price = Y: quantity = J

Graph A

A movement upward and to the left along a demand curve is called (1 Điểm)
a/ a decrease in quantity demand
b/ an increase in demand.
c/ an increase in quantity demand
d/ an decrease in demand.

A likely example of substitute goods for most people would be (1 Điểm)

a/ tennis balls and tennis rackets.
b/ peanut butter and jelly.
c/ televisions and subscriptions to cable television services.
d/ pencils and pens.

A price ceiling is (1 Điểm)

a/ All of the above are correct.
b/ a legal maximum on the price at which a good can be sold.
c/ often imposed when sellers of a good are successful in their attempts to convince the
government that the market outcome is unfair without a price ceiling.
d/ often imposed on markets in which “cutthroat competition” would prevail without a price
ceiling.

Which of the following is correct? (1 Điểm)

a/ Rent control and the minimum wage are both examples of price floors.
b/ Rent control and the minimum wage are both examples of price ceilings.
c/ Rent control is an example of a price floor, and the minimum wage is an example of a price
ceiling.
d/ Rent control is an example of a price ceiling, and the minimum wage is an example of a price
floor.

A firm produces 400 units of output at a total cost of $1,200. If total variable costs are $1,000, (1
Điểm)
a/ average fixed cost is 50 cents.
b/ average variable cost is $2.
c/ average total cost is $2.50.
d/ average total cost is 50 cents.
a/ in the short run and earning a positive economic profit

Suppose that for a particular firm the only variable input into the production process is labor and
that output equals zero when no workers are hired. In addition, suppose that the average total
cost when 5 units of output are produced is $80, and the marginal cost of the sixth unit of output
is $160. What is the average total cost when six units are produced? (1 Điểm)
a/ $80.00
b/ $83.33
c/ $88.33
d/ $93.33
ATC=QTC

where:

 Total Cost (TC) at 5 units = ATC×Q=80×5=400ATC×Q=80×5=400

 Marginal Cost (MC) of the 6th unit = $160 (This means the total cost increases by $160
when producing the 6th unit)
 Total Cost (TC) at 6 units = $400 + $160 = $560
 New ATC = TCQ=5606=93.33QTC=6560=93.33

Correct Answer:

✔ $93.33$
b/ $980

The two types of imperfectly competitive markets are (1 Điểm)

a/ monopoly and monopolistic competition.
b/ monopoly and oligopoly.
c/ monopolistic competition and oligopoly.
d/ monopolistic competition and cartels.

Suppose a firm in a competitive market produces and sells 150 units of output and earns $1,800
in total revenue from the sales. If the firm increases its output to 200 units, the average revenue
of the 200th unit will be (1 Điểm)
a/ less than $12.
b/ more than $12.
c/ $12.
d/ zero.

Which of the following is a necessary characteristic of a monopoly? (1 Điểm)

a/ The firm is the sole seller of its product.
b/ The firm's product has many close substitutes.
c/ The firm generates a large economic profit.
d/ The firm is located in a small geographic market.

In the short run, a firm operating in a monopolistically competitive market (1 Điểm)

a/ produces an output level where marginal revenue equals average total cost.
b/ produces an output where marginal revenue equals marginal cost, and the price is determined
by demand.
c/ must earn zero economic profits.
d/ maximizes revenues as well as profits.
a/ P5 x Q3

For a monopolistically competitive firm, (1 Điểm)

a/ marginal revenue and price are the same.
b/ at the profit-maximizing quantity of output, marginal revenue equals marginal cost.
c/ at the profit-maximizing quantity of output, price equals marginal cost.
d/ at the profit-maximizing quantity of output, price equals the minimum of average total cost.
c/ $14

Which of the following conditions is characteristic of a monopolistically competitive firm in

both the short run and the long run? (1 Điểm)
a/ P > MC
b/ MC = ATC
c/ P < MR
d/ P = ATC

A monopolist can sell 300 units of output for $50 per unit. Alternatively, it can sell 301 units of
output for $49.60 per unit. The marginal revenue of the 301st unit of output is (1 Điểm)
a/ -$99.60.
b/ -$70.40.
c/ -$0.40.
d. $70.40.

 Total revenue (TR) before selling 301st unit:

TR300=300×50=15,000TR300=300×50=15,000

 Total revenue (TR) after selling 301st unit:

TR301=301×49.60=14,929.60TR301=301×49.60=14,929.60

 Marginal Revenue (MR) = Change in TR:

MR=TR301−TR300=14,929.60−15,000=−70.40MR=TR301−TR300
=14,929.60−15,000=−70.40
Since total revenue decreases, the MR is negative, meaning the 301st unit reduces revenue
by $70.40.

A monopoly firm maximizes its profit by producing Q = 500 units of output. At that level of
output, its marginal revenue is $40, its average revenue is $80, and its average total cost is
$44. At Q = 500, the firm's profit is (1 Điểm)
a/ $18,000.
b/ $20,000.
c/ $22,000.
d/ $40,000.

 Total revenue (TR):

TR=P×Q=80×500=40,000TR=P×Q=80×500=40,000

 Total cost (TC):

TC=ATC×Q=44×500=22,000TC=ATC×Q=44×500=22,000

 Profit (TR - TC):

40,000−22,000=18,00040,000−22,000=18,000

Thus, the firm's profit is $18,000

a/ above $13

Which of the following statements is correct? (1 Điểm)

a/ For all firms, marginal revenue equals the price of the good.

b/ Only for competitive firms does average revenue equal the price
of the good. c/ Marginal revenue can be calculated as total revenue
divided by the quantity sold.

d/ Only for competitive firms does average revenue equal marginal

revenue.

The information below applies to a competitive firm that sells its

output for $45 per unit.

• When the firm produces and sells 120 units of output, its average
total cost is $23.5.

• When the firm produces and sells 121 units of output, its average
total cost is $23.65.

When the firm produces 120 units of output, its profit is (1 Điểm)

a/ $5,400.00.

b/ $2,580.00.

c/ $2,820.00.

d/ $7,675.00.

The profit-maximization problem for a monopolist differs from that of

a competitive firm in which of the following ways? (1 Điểm)

a/ A competitive firm maximizes profit at the point where marginal

revenue equals marginal cost; a monopolist maximizes profit at the
point where marginal revenue exceeds marginal cost.

b/ A competitive firm maximizes profit at the point where average

revenue equals marginal cost; a monopolist maximizes profit at the
point where average revenue exceeds marginal cost.
c/ For a competitive firm, marginal revenue at the profit-maximizing
level of output is equal to marginal revenue at all other levels of
output; for a monopolist, marginal revenue at the profit-maximizing
level of output is smaller than it is for larger levels of output.

d/ For a profit-maximizing competitive firm, thinking at the margin

is much more important than it is for a profit-maximizing
monopolist.

If the distribution of water is a natural monopoly, then (1 Điểm)

a/ a single firm cannot serve the market at the lowest possible

average total cost.

b/ allowing for competition among different firms in the water-

distribution industry is efficient.

c/ multiple firms would likely each have to pay large fixed costs to
develop their own network of pipes.

d/ average cost increases as the quantity of water produced

increases.

The information below applies to a competitive firm that sells its

output for $45 per unit.

• When the firm produces and sells 120 units of output, its average
total cost is $23.5.

• When the firm produces and sells 121 units of output, its average
total cost is $23.65.

When the firm increases its output from 120 units to 121 units, its
profit (1 Điểm)

a/ decreases by $3.35.

b/ decreases by $45.00.
c/ increases by $45.00.

d/ increases by $3.35.

d/ $80

140) When a survey uses the responses strongly disagree, disagree,

neutral, agree, strongly agree, this is an example of:
A) nominal data.
B) ordinal data.
C) interval data.
D) ratio data.

141) General Electric Corporation tracks employee turnover

annually. It currently has a data set that contains turnover for the
past 20 years. What type of data does it have?
A) Time-series data
B) Cross-sectional data
C) Nominal data
D) Ordinal data

142) The human resources department at a major high tech

company recently conducted an employee satisfaction survey of 100
of its 3,000 employees. Data were collected on such variables as
age, gender, marital status, current salary, level of overall
satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Which of the following best describes the
overall data set that was generated from the study?
A) Cross-sectional data
B) Time-series data
C) Nominal data
D) Quantitative data

143) The human resources department at a major high tech

company recently conducted an employee satisfaction survey of 100
of its 3,000 employees. Data were collected on such variables as
age, gender, marital status, current salary, level of overall
satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Considering the age variable where
employees were asked to list their age at their last birthday, which
of the following best describes the level of data measurement for
that variable?
A) Interval level
B) Nominal level
C) Ratio level
D) Cross-sectional data

144) The high temperature is recorded each day for a period of 1

year. This is an example of:
A) nominal data.
B) ordinal data.
C) time-series data.
D) cross-sectional data.

145) The human resources department at a major high tech

company recently conducted an employee satisfaction survey of 100
of its 3000 employees. Data were collected on such variables as
age, gender, marital status, current salary, level of overall
satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Which of the variables listed are considered
to be ratio level data?
A) Age and years with the company
B) Gender and marital status
C) Job title
D) None of the variables is ratio level.

146) The human resources department at a major high tech

company recently conducted an employee satisfaction survey of 100
of its 3,000 employees. Data were collected on such variables as
age, gender, marital status, current salary, level of overall
satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Which of the variables would be classified as
nominal level data?
A) Age and years with the company
B) Overall satisfaction
C) Gender, marital status, and job title
D) Age and gender

147) The human resources department at a major high tech

company recently conducted an employee satisfaction survey of 100
of its 3,000 employees. Data were collected on such variables as
age, gender, marital status, current salary, level of overall
satisfaction on a scale from 1 to 5, number of years with the
company, and job title. Which of the variables would be considered
to be qualitative data?
A) Gender, marital status, job satisfaction, and job title
B) Age
C) Years with the company
D) All variables listed are qualitative.

148) Weekly stock closing prices for IBM would be classified as

which of the following?
A) Cross-sectional data
B) Time-series data
C) Nominal data
D) Ordinal data

149) A college data base includes the number of people who are
enrolled in each class the college offers. This is an example of:
A) nominal data.
B) ordinal data.
C) interval data.
D) ratio data.

150) When data are organized into levels, the highest data level is:
A) interval level data.
B) nominal level data.
C) ordinal level data.
D) ratio level data.

151) Data collected at a fixed point in time are:

A) time-series data.
B) approximate time-series data.
C) cross-sectional data.
D) panel data.