Sample questions for the Microeconomics Midterm Exam
The exam will cover chapters 1, 2, 3, 4, 5 and 6
There will be 100 minutes allowed to complete the exam. You will have three types of questions: multiple choice, true or false and explain, and analysis problems.
True or False and Explain (Remember that there is one mark for True or False and 4 marks for your explanation)
1. Economics is only interested in fairness not efficiency.
2. If the marginal benefit of chocolate bars is less than the marginal cost of chocolate bars, more chocolate milk should be produced.
3. A production possibility frontier with a constant slope exhibits increasing marginal cost.
4. An increase in the supply of textbooks will lower the price of textbooks and increase demand for textbooks.
5. A tax on a good that is placed on suppliers will be paid by the suppliers.
6. Gains from trade do not occur when one party has absolute advantage.
7. A positive, cross-price elasticity means that two goods are complements in consumption.
8. Consumers treat peas and beans as substitutes therefore, if the price of beans increases the demanded of peas rises.
9. Producers treat peas and beans as substitutes therefore, if the price of beans increased the quantity demand of peas decreases.
10. Markets are the only way of distributing goods and service.
11. The supply curve is the relationship between the minimum selling price and the quantity firms are willing and able to make available to the market.
12. Along a downward sloping straight line demand curve, there are two regions of price elasticity and one point of unit elasticity.
1. The formula for a supply curve is P=18+3Qs and the formula for the demand curve is P=60-4Qd
a) Find the equilibrium price in this market
Find the equilibrium quantity in this market...
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