Question

Q1. If the price of a complement increases, all else equal, ----------------------------

Q2. Which of the following would lead to an INCREASE in the demand for golf balls?

A) An decrease in the price of golf balls.

B) An increase in the price of golf clubs.

C) A decrease in the cost of producing golf balls.

D) An increase in average household income when golf balls are a normal good.

E) none of the above

Q3. If input prices increase, all else equal, --------------------------------

Q4. Which of the following would decrease the supply of wheat?

A) A decrease in the price of pesticides. B) An increase in the demand for wheat. C) A rise in the price of wheat. D) An increase in the price of corn. E) none of the above

Q5. When Sonoma Vineyards increases the price of its Chardonnay from $15 per bottle to $20 per bottle, the result is a decrease in…

A) the quantity of this wine demanded B) the quantity of this wine supplied.

C) the demand for this wine. D) the supply of this wine.

Q6. Which of the following will cause a change in quantity supplied?

A) Technological change. B) A change in input prices. C) A change in the market price of the good.

D) A change in the number of firms in the market. E) all of the above.

Q7. In which of the following cases will the effect on equilibrium output be indeterminate (i.e., depend on the magnitudes of the shifts in supply and demand)?

A) Demand decreases and supply decreases. B) Demand remains constant and supply increases.

C) Demand decreases and supply increases. D) Demand increases and supply increases. E) none of the above.

Use the following demand and supply functions to answer the next three questions.

Demand: QD= 600 - 30P Supply: QS = -300 + 120P

Q8. Equilibrium price and output are

A) P = $2 and Q = 540. B) P = $10 and Q = 300. C) P = $6 and Q = 420.

D) P = $3.33 and Q = 500. E) none of the above

Q9. If the price is currently $8, there is a --------------------------

A) surplus of 360 units. B) shortage of 360 units. C) surplus of 300 units.

D) shortage of 660 units. E) none of the above

Q10. If the price is currently $4, there is a

A) shortage of 300 units. B) shortage of 480 units. C) surplus of 180 units.

D) shortage of 180 units. E) none of the above

Q.11 The Free Indeed Company manufactures ladies’ shoes that are sold through discount houses. The shoes are sold for $20 each pair; the fixed costs are $110,000 for up to 30,000 pairs of shoes; variable costs are $13 per pair of shoes. What is the firm’s breakeven point in units sold?

a) 30,000 pairs of shoes b) 15,714 pairs of shoes c) 8,462 pairs of shoes d) 5,500 pairs of shoes

Q12. If the demand curve for British pounds shifts to the right, ---------------

a) the dollar price of British pounds will increase

b) the dollar price of British pounds will decrease

c) the exchange rate between dollars and pounds will be out of equilibrium

d) the pound will fall in value against the dollar

Q13. Judgments about "what ought to be" in economic matters. Can't be proven false, based on judgments

a. Macroeconomics b. Positive economics c. Normative economics d. Microeconomics

Q14. Which of the following statements is normative in nature?

A) That economics mid-term was tough!

B) Professor of economics put too many multiple-choice questions.

C) Neither of these statements is normative in nature

D) Both A & B of these statements are normative in nature