- •None of the above.
- •Transitivity.
- •Means that between any two market baskets of goods, the consumer can determine that either one is preferred to the other or that she is indifferent between them.
- •There is a shortage equal to 30.
- •None of the above.
- •I is true, and II is false.
- •Substitution
- •Work against each other.
- •More, more
- •Less, more
- •Completeness.
- •Will be straight lines with a slope of -1/2.
- •Will be straight lines with a slope of -1.
- •The marginal utility of apples decreases.
- •Income is constant.
- •None of the above.
- •It has a positive slope.
- •Called the marginal rate of substitution.
- •All of the above.
- •None of the above
- •None of the above
SULEYMAN DEMIREL UNIVERSITY
MICROECONOMICS
MIDDTERM I
VERSION BB
Group_______Name and Last name: _________________________________________
Date: ___/___/ 2009 Score:
Duration: 90 mins
Each question is 2.3 points. Copy the answers to the table below. 1. A supply curve reveals
the quantity of output consumers are willing to purchase at each possible market price.
the difference between quantity demanded and quantity supplied at each price.
the maximum level of output an industry can produce, regardless of price.
the quantity of output that producers are willing to produce and sell at each possible market price
2. When an industry's raw material costs increase, other things remaining the same,
the supply curve shifts to the left.
the supply curve shifts to the right.
output increases regardless of the market price and the supply curve shifts upward.
output decreases and the market price also decreases.
3. 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.
none of the above.
4. Which of these measures the responsiveness of the quantity of one good demanded to an increase in the price of another good?
price elasticity.
income elasticity.
cross‑price elasticity.
cross‑substitution elasticity.
5. Microeconomics is the branch of economics that deals with which of the following topics?
The behavior of individual consumers
Unemployment and interest rates
The behavior of individual firms and investors
(b) and (c)
(a) and (c)
6. The price of good A goes up. As a result the demand for good B shifts to the left. From this we can infer that:
good A is used to produce good B.
good B is used to produce good A.
goods A and B are substitutes.
goods A and B are complements.
None of the above.
7. The cross‑price elasticity between a pair of complementary goods will be
positive.
negative.
zero.
positive or zero depending upon the strength of the relationship.
8. Along any downward sloping straight-line demand curve:
both the price elasticity and slope vary.
the price elasticity varies, but the slope is constant.
the slope varies, but the price elasticity is constant.
both the price elasticity and slope are constant.
9. Consider the demand curve of the form Q = a - bP. If a is a positive real number, and b = 0, then demand is
completely inelastic.
inelastic, but not completely.
unit elastic.
elastic, but not infinitely.
10. Which of the following is a positive statement?
The President of RK ought to be elected by a direct vote of the Kazakhstani people rather than the Parliament.
A fundamental assumption of the economic theory of consumer behavior is that consumers always prefer having more of any good to having less of it.
Because many adults cannot afford to go to college, tax credits for tuition should be introduced.
All of the above.
All of the above
11. The price of a taco was $0.29 in 1970 and $0.99 in 1993. The CPI was 38.8 in 1970 and 144.0 in 1993. The 1993 price of a taco in 1970 dollars is:
$0.08.
$0.27.
$0.34.
$3.67.
12. A consumer prefers market basket A to market basket B, and prefers market basket B to market basket C. Therefore, A is preferred to C. The assumption that leads to this conclusion is:
Transitivity.
completeness.
all goods are good.
diminishing MRS.
assumption of rationality.
13. The assumption that preferences are complete:
means that a consumer will spend her entire income.
is unnecessary, as long as transitivity is assumed.
recognizes that there may be pairs of market baskets that cannot be compared.
Means that between any two market baskets of goods, the consumer can determine that either one is preferred to the other or that she is indifferent between them.
The demand for books is: Qd = 120 – P
The supply of books is: Qs = 5P
14. What is the equilibrium price of books?
5
10
15
20
none of the above
15. What is the equilibrium quantity of books sold?
25
50
75
100
none of the above
16. If P=$15, which of the following is true?
There is a surplus equal to 30.
There is a shortage equal to 30.
There is a surplus, but it is impossible to determine how large.
There is a shortage, but it is impossible to determine how large.
17. If P=$25, which of the following is true?
There is a surplus equal to 30.
There is a shortage equal to 30.
There is a shortage, but it is impossible to determine how large.
There is a surplus, but it is impossible to determine how large.
18. Consider a supply curve of the form: Q = c + dP. If d equals zero then supply is:
completely inelastic.
inelastic, but not completely inelastic.
elastic, but not infinitely elastic.
infinitely elastic
19. Which of the following is NOT an assumption regarding people's preferences in the theory of consumer behavior?