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Name: ________________________ Class: ___________________ Date: __________

ID: B

Microeconomics Mid-term
Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. Figure 6-3

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1. Refer to Figure 6-3. In panel (b), with the price floor in effect, there will be a. a shortage of wheat. b. equilibrium in the market. c. a surplus of wheat. d. an excess demand for wheat. 2. The positive relationship between price and quantity supplied is called a. profit. b. a change in supply. c. a shift of the supply curve. d. the law of supply. 3. When quantity demanded decreases at every possible price, we know that the demand curve has a. shifted to the left. b. shifted to the right. c. not shifted; rather, we have moved down the demand curve to a new point on the same curve. d. not shifted; rather, the demand curve has become flatter. 4. When the price of a good is $5, the quantity demanded is 100 units per month; when the price is $7, the quantity demanded is 80 units per month. Using the midpoint method, the price elasticity of demand is about a. 0.22. b. 0.67. c. 1.33. d. 1.50. 5. Which of these statements about economic models is correct? a. For economists, economic models provide insights about the world. b. Economic models are built with assumptions. c. Economic models are often composed of equations and diagrams. d. All of the above are correct.

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Name: ________________________ ____ 6. The signals that guide the allocation of resources in a market economy are a. surpluses and shortages. b. quantities. c. property rights. d. prices. 7. Economics is the study of a. production methods. b. how society manages its scarce resources. c. how households decide who performs which tasks. d. the interaction of business and government. Figure 4-10

ID: B

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8. Refer to Figure 4-10. Graph C shows which of the following? a. an increase in demand and an increase in quantity supplied b. an increase in demand and an increase in supply c. an increase in quantity demanded and an increase in quantity supplied d. an increase in supply and an increase in quantity demanded 9. Refer to Figure 4-10. Which of the four graphs illustrates a decrease in quantity demanded? a. A. b. B. c. C. d. D.

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Name: ________________________

ID: B

____ 10. Refer to Figure 4-10. Which of the four graphs illustrates an increase in quantity supplied? a. A. b. B. c. C. d. D. ____ 11. Suppose a producer is able to separate customers into two groups, one having an inelastic demand and the other having an elastic demand. If the producer's objective is to increase total revenue, she should a. increase the price charged to customers with the elastic demand and decrease the price charged to customers with the inelastic demand. b. decrease the price charged to customers with the elastic demand and increase the price charged to customers with the inelastic demand. c. charge the same price to both groups of customers. d. increase the price for both groups of customers. Figure 5-2

____ 12. Refer to Figure 5-2. If the price decreased from $18 to $6, a. total revenue would increase by $1,200 and demand is elastic between points A and C. b. total revenue would increase by $800 and demand is elastic between points A and C. c. total revenue would decrease by $1,200 and demand is inelastic between points A and C. d. total revenue would decrease by $800 and demand is inelastic between points A and C. ____ 13. Refer to Figure 5-2. The elasticity of demand between point B and point C, using the midpoint method, is a. 0.5. b. 0.75. c. 1.0. d. 1.3.

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Name: ________________________

ID: B

Figure 4-7

____ 14. Refer to Figure 4-7. At a price of $35, a. there would be a shortage of 400 units. b. there would be a surplus of 200 units. c. there would be a surplus of 400 units. d. there would be an excess supply of 200 units. ____ 15. Refer to...
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