Name: ________________________ Class: ___________________ Date: __________
ID: A
1
Sample questions and answers: Exam 1
True/False
Indicate whether the sentence or statement is true or false.
____
1. If the price and quantity exchanged of a good simultaneously rise, then the law of demand has been violated.
____
2. The most efficient typist is the one who can type the greatest number of words per minute.
____
3. Firms are so diverse in size and organization that it is not possible to make any general statements about their
behavior.
____
4. A change in a variable cost causes a parallel upward shift in the marginal cost curve.
____
5. For a competitive firm, marginal revenue is constant and equal to the market price.
____
6. If a tax and a price control have the same effect on the price paid by consumers, then the two policies will
create the same deadweight loss.
____
7. The value of a good is ultimately determined by the amount of labor needed to produce the good.
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8. The competition among firms to acquire the rights to legal barriers to entry helps to reduce the welfare costs
of monopoly.
Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
____
9. When the price of a barrel of crude oil rises, what will be the immediate effect on the market for home heating
fuel produced from crude oil?
a.
The demand for the fuel will fall.
b.
The quantity demanded of fuel will rise.
c.
The supply of fuel will fall.
d.
The quantity supplied of fuel will fall.
____ 10. If the supply of oil falls and all other relevant factors remain unchanged, then,
a.
the demand for oil will fall.
b.
the quantity demanded of oil will fall.
c.
the demand for oil will rise.
d.
the quantity demanded of oil will rise.
____ 11. According to the law of demand, if other relevant factors remain unchanged, then a rise in the price of a
commodity will cause
a.
a reduction in the equilibrium quantity.
b.
excess supply.
c.
suppliers to reduce their production in reaction to the