Part I. Multiple Choice (30 questions, 60 points in total)
Choose only ONE best answer.
1 E 2 D 3 E 4 B 5 B
6 B 7 D 8 C 9 C 10 A
11 D 12 A 13 C 14 D 15 D
16 D 17 C 18 B 19 A 20 C
21 D 22 B 23 A 24 D 25 C
26 A 27 B 28 D 29 D 30 C
An increase in the quantity demanded could be caused by:
an increase in the price of substitute goods
a decrease in the price of complementary goods
an increase in consumer income levels
all of the above
none of the above
The above figure illustrates the labor market for local fast food restaurants. What would be the effects of a minimum wage imposed at $4 per hour?
a shortage of 200 hours
a shortage of 100 hours
a surplus of 200 hours
nothing because the minimum wage has no effect on the equilibrium price and quantity.
In the electric power industry, residential customers have relatively __________ demands for electricity compared with large industrial users and generally are charged __________ rates.
The fact that the fourth plate from the “All You Can Eat Country Buffet” generated more satisfaction than the fifth plate is an example of
increasing marginal utility.
diminishing marginal utility.
diminishing total utility.
the “paradox of value.”
none of the above
When the wage rate increases from $5.00 to $7.50 per hour, Bob works more hours because
his income effect outweighs his substitution effect.
his substitution effect outweighs his income effect.
his income and substitution effects offset each other exactly and his demand for labor increases.
his income and substitution effects offset each other exactly and his supply of labor increases.
For a short-run cost function which of the following statements is (are) not true?
The average fixed cost function is monotonically decreasing.
The marginal... [continues]
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