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(ECON110)Old Midterm MCQ.pdf
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1. Scarcity requires that people must


A. cooperate.
B. compete.
C. trade.
D. make choices.

2. The ultimate cost of any choice is


A. the dollars expended.
B. the highest-valued alternative forgone.
C. the after-tax cost.
D. what someone else would be willing to pay.

3. Assume that the quantity consumed of pizza is dependent on three factors: the price of a pizza, the income of pizza purchasers, and consumers taste for pizza. When graphing the relationship between the price of a pizza and the quantity of pizza consumed,


A. the price of a pizza and the income of pizza consumers are the only variables that are allowed to change.
B. the price of pizza and quantity consumed of pizza are the only variables that are allowed to change.
C. consumers taste for pizza and the income of pizza purchasers are the only variables that are allowed to change.
D. None of the above answers is correct.

4. If the marginal benefit of a good exceeds its marginal cost


A. weve achieved efficient resource use.
B. we should produce more.
C. we should produce less.
D. we cannot tell if more or less should be produced.

5. Chicken wings and chicken drumsticks are complements in production. What would happen if the demand curve for chicken drumsticks shifts to the right?


A. Demand curve for chicken wings will shift to the right.
B. Price of chicken wings will rise.
C. Price of chicken wings will fall.
D. Supply of chicken wings will stay unchanged.

6. Suppose that the income of buyers in a particular market for a normal good declines and there is also a reduction in the prices of productive resources. What would we expect to occur in this market?


A. The equilibrium price would increase, but the impact on the quantity sold will be ambiguous.
B. Both the equilibrium price and equilibrium quantity will increase.
C. The equilibrium price would decrease, but the impact on the quantity sold will be ambiguous.
D. Equilibrium quantity would increase, but the impact on equilibrium price will be ambiguous.

7. When we move down along a demand curve,


A. only the price is held constant.
B. income and the price of the good are held constant.
C. all determinants of quantity demanded are held constant
D. none of the above.

8. The diagram below provides information on Monicas consumption of chewing gum (Cchewing gum) and candies (Ccandies) as her income stays unchanged and prices of both candies and chewing gums become half as before. From this diagram we can conclude:








A. Pchewing gum/ Pcandies = 2/3 and candies are inferior goods.
B. Pchewing gum/ Pcandies = 3/2 and candies are inferior goods.
C. Pchewing gum/ Pcandies = 3/2 and chewing gums are inferior goods.
D. None of the above because the income did not change.
9. Over the price range in which demand is price-elastic, a decrease in price will cause


A. an increase in total