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sample exam I spring 2011

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									sample exam I Spring 2011

Student: ___________________________________________________________________________

1. In a graph of the relationship between income and consumption, economists generally consider:
A. Income to be the independent variable and place it on the vertical axis
B. Income to be the dependent variable and place it on the horizontal axis
C. Consumption to be the dependent variable and place it on the vertical axis
D. Consumption to be the independent variable and place it on the vertical axis



2. When society overallocates resources to the production of a product it means that the:
A. Investment in the product is declining
B. Opportunity cost of the product is decreasing
C. Marginal benefit is greater than the marginal cost
D. Marginal benefit is less than the marginal cost



3. If you benefited from a decrease in the price of gasoline, the whole economy must have benefited. This
statement is an example of:
A. Ceteris paribus
B. The fallacy of composition
C. A factual statement
D. Policy economics



4. Macroeconomics focuses on:
A. The individual units that make up the whole of the economy
B. Studies of how individual markets and industries are organized
C. Total output and the general level of prices in the economy
D. How a business determines how much of a product to produce



5. Which of the following would be a positive economic statement?
A. Rents for apartments in this city are too high and must be controlled by city government to keep landlords from
making too much profit
B. Bankers are now charging higher interest rates on credit cards to cover the increased cost of loaning funds to
consumers
C. The United States should be more aggressive in its trade negotiations with its major trading partners to help
reduce the trade deficit
D. More money should be allocated by the Federal government to social programs and less money to national
defense
6. Why do businesses generally offer a "free good" with a purchase of a product?
A. To increase the marginal cost of the product
B. To decrease the marginal benefit of the product
C. To encourage consumers to purchase the product
D. To provide a more equal distribution of income



7. How does human specialization contribute to an economy's output?
A. It makes use of differences in abilities
B. It is a process of creative destruction
C. It works like an "invisible hand"
D. It decreases derived demand



 Suppose a firm can produce 70 units of a hypothetical product, Zenia, by combining labor, land, capital, and
entrepreneurial ability in each of the four ways shown in the table below. Assume further that the firm can hire
labor at $3 per unit, land at $3 per unit, capital at $6 per unit, and entrepreneurship at $9 per unit.




8. Refer to the above table. If each of the 70 Zenias that are produced sells for $1 each, what will be the economic
profit for the firm?
A. $7
B. $10
C. $13
D. $19



9. The influential book written by Adam Smith was:
A. The Worldly Philosophers
B. The Affluent Society
C. The Age of the Economist
D. The Wealth of Nations
10. Which statement accurately summarizes the relationship between the prices of goods and their relative
scarcity?
A. The price of a good is a direct function of the relative scarcity of the good
B. The price of a good is an inverse function of the relative scarcity of the good
C. The price of a good is independent of the relative scarcity of the good
D. High prices lead to greater relative scarcity



11. A prerequisite of specialization is:
A. A capitalistic economic system
B. A medium of exchange
C. Free enterprise
D. Competition



12. The simple circular flow model shows that workers, entrepreneurs, and the owners of land and capital offer
their services through:
A. Product markets
B. Resource markets
C. Employment agencies
D. Business firms




13. Suppose in the market shown above the government imposes a price ceiling of $95. How many units will be
bought at the new price?
A. 79
B. 95
C. 105
D. 121
14. A decrease in the demand for a good is expected to cause:
A. Higher prices and decreased quantity sold
B. Higher prices and increased quantity sold
C. Lower prices and increased quantity sold
D. Lower prices and decreased quantity sold




15. Refer to the above table. If demand increased by 4 units at each price, what would the new equilibrium price
and quantity be?
A. $3 and 4 units
B. $4 and 5 units
C. $5 and 7 units
D. $6 and 6 units



16. Which of the following is a correct statement?
A. Price ceilings increase demand
B. Price ceilings create surpluses
C. Price floors create surpluses
D. Price floors increase supply



17. A television station reports that more people are purchasing personal computers. A likely explanation for this
event would be a(n):
A. Increase in the demand for and the supply of computers
B. Decrease in the demand for and the supply of computers
C. Increase in the supply of computers and a decrease in the demand for computers
D. Decrease in the supply of computers and an increase in the demand for computers
18. Other things being equal, the law of demand implies that as:
A. The demand for CDs increases, the price will decrease
B. Income increases, the quantity of CDs demanded will increase
C. The price of CDs increases, the quantity of CDs demanded will decrease
D. The price of CDs increases, the quantity of CDs demanded will increase



19. A market demand schedule for a product indicates that:
A. As the product's price falls, consumers buy less of the good
B. As a product's price rises, consumers buy less of other goods
C. There is a direct relationship between price and quantity demanded
D. There is an inverse relationship between price and quantity demanded




20. Refer to the above diagram illustrating the market for corn. If the price in this market were to be fixed at $2 per
bushel, the part of the line marked B would represent a:
A. Surplus of 8,000 bushels
B. Shortage of 8,000 bushels
C. Surplus of 5,000 bushels
D. Shortage of 5,000 bushels
21. Refer to the above table. If supply increased by 2 units at each price, what would the new equilibrium price
and quantity be?
A. $4 and 5 units
B. $4 and 6 units
C. $5 and 7 units
D. $6 and 7 units



22. A surplus of any given commodity can be expected whenever the:
A. Prevailing price of the good is below the equilibrium price
B. Prevailing price of the good is above the equilibrium price
C. Quantity demanded of the good exceeds the quantity supplied
D. Prevailing market price of the good rises



23. About what percentage of total personal consumption expenditures are for services?
A. 20
B. 36
C. 59
D. 75



24. Is it reasonable that snow removal on streets is a service often provided by local governments?
A. Yes, in some cases it is prohibitively expensive for private companies to charge and collect from all of those
who benefit
B. Yes, private companies cannot afford to have all the equipment sitting idle throughout the other three seasons
C. No, it is not really necessary. People would pay just as much to private firms as they pay in local taxes
D. No, this is simply an example of government intervention into the market resulting from a desire to increase
governmental power
25. What basic economic function does the government perform when it protects product quality?
A. Maintaining competition
B. Reallocating resources
C. Providing a public good
D. Providing a legal structure



26. If the production of a product results in sizable negative externalities, an appropriate government policy might
be to:
A. Subsidize the production of the good since resources are underallocated
B. Tax the producer and thus shift the supply curve to the left
C. Tax the consumer and thus shift the demand curve to the right
D. Subsidize the consumer since the good is being underconsumed



27. Protective tariffs will tend to shift:
A. Supply toward foreign products
B. Demand toward foreign products
C. Demand toward domestic products
D. Have no effect on demand or supply



28. Which factor has contributed significantly to more international trade since the Second World War?
A. An increase in the size of government
B. An expansion of environmental laws
C. A fall in the rate of business profit
D. A general decline in tariffs



29. Government payments to domestic producers to reduce the world price of exported goods are called:
A. Import quotas
B. Protective tariffs
C. Nontariff barriers
D. Export subsidies



30. A major criticism of the World Trade Organization is that it:
A. Raises output and production in developing nations at the expense of developed nations
B. Increases the living standards in member nations at the expense of non-member nations
C. Weakens collective bargaining and labor laws in member nations
D. Imposes costly environmental protections on the world economy
The table shows four different currencies and how much of each currency can be purchased with a U.S. dollar.




31. Refer to the above table. Which statement is correct about the change from year 1 to year 2?
A. The U.S. dollar appreciated against the Mexican peso
B. The U.S. dollar depreciated against the British pound
C. The U.S. dollar appreciated against the Japanese yen
D. The U.S. dollar appreciated against the euro



32. Tariffs on an imported product:
A. Hurt domestic producers of the product
B. Hurt domestic consumers of the product
C. Hurt foreign consumers of the product
D. Benefit foreign producers of the product



33. Which statement is correct?
A. GATT provides short-term loans of foreign currencies to nations faced with temporary balance of payments
difficulties
B. The "most-favored-nation" clause in reciprocal trade agreements means that any tariff reduction granted one
specific nation will automatically apply to most other nations
C. During the Great Depression the flow of trade was stimulated by mutual reductions in tariffs and import quotas
among leading trade nations
D. The Smoot-Hawley Tariff Act exempted American exporters from the Sherman Antitrust Act
34. Refer to the above table. What is the producer surplus for all producers A to D?
A. $6
B. $13
C. $19
D. $24




35. Refer to the above graph. If the demand increased:
A. Price and quantity would increase
B. Price and quantity would decrease
C. Price would stay the same and quantity would decrease
D. Price would stay the same and quantity would increase



36. An inferior good is best defined as a product for which the:
A. Cross elasticity of demand is negative
B. Income elasticity of demand is negative
C. Cross elasticity of demand is zero
D. Income elasticity of demand is zero
37. Refer to the above graphs. Which graph shows the immediate market period for supply?
A. Graph A
B. Graph B
C. Graph C
D. Graph D



38. If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a
price:
A. Increase will decrease total revenue in the short run but increase total revenue in the long run
B. Increase will increase total revenue in the short run but decrease total revenue in the long run
C. Decrease will increase total revenue in the short run but decrease total revenue in the long run
D. Decrease will decrease total revenue in the short run and decrease total revenue in the long run
39. Refer to the above graph. If the output level is now Q2, then the sum of the consumer and producer surplus is:
A. acd
B. ac0
C. abe0
D. bce + gcf



40. If the demand for a product is elastic, then:
A. A higher tax will generate more tax revenue
B. A higher tax will generate less tax revenue
C. Total revenue will decrease as price decreases
D. Total revenue will remain constant as price remains constant
sample exam I Spring 2011 Key


1. In a graph of the relationship between income and consumption, economists generally consider:
A. Income to be the independent variable and place it on the vertical axis
B. Income to be the dependent variable and place it on the horizontal axis
C. Consumption to be the dependent variable and place it on the vertical axis
D. Consumption to be the independent variable and place it on the vertical axis


AACSB: Analytical Skills
Bloom's: Knowledge
Learning Objective: 1-1
Level: Difficult
McConnell2 - Chapter 001 #261
Topic: Unemployment, growth, and the future



2. When society overallocates resources to the production of a product it means that the:
A. Investment in the product is declining
B. Opportunity cost of the product is decreasing
C. Marginal benefit is greater than the marginal cost
D. Marginal benefit is less than the marginal cost


AACSB: Analytical Skills
Bloom's: Knowledge
Learning Objective: 1-5
Level: Difficult
McConnell2 - Chapter 001 #158
Topic: Production possibilities model



3. If you benefited from a decrease in the price of gasoline, the whole economy must have benefited. This
statement is an example of:
A. Ceteris paribus
B. The fallacy of composition
C. A factual statement
D. Policy economics


AACSB: Analytical Skills
Bloom's: Application
Learning Objective: 1-1
Level: Difficult
McConnell2 - Chapter 001 #204
Topic: Economics; economic perspective
4. Macroeconomics focuses on:
A. The individual units that make up the whole of the economy
B. Studies of how individual markets and industries are organized
C. Total output and the general level of prices in the economy
D. How a business determines how much of a product to produce


AACSB: Analytical Skills
Bloom's: Knowledge
Learning Objective: 1-3
Level: Easy
McConnell2 - Chapter 001 #51
Topic: Macroeconomics and microeconomics



5. Which of the following would be a positive economic statement?
A. Rents for apartments in this city are too high and must be controlled by city government to keep landlords from
making too much profit
B. Bankers are now charging higher interest rates on credit cards to cover the increased cost of loaning funds to
consumers
C. The United States should be more aggressive in its trade negotiations with its major trading partners to help
reduce the trade deficit
D. More money should be allocated by the Federal government to social programs and less money to national
defense


AACSB: Analytical Skills
Bloom's: Application
Learning Objective: 1-1
Level: Moderate
McConnell2 - Chapter 001 #73
Topic: Positive and normative economics



6. Why do businesses generally offer a "free good" with a purchase of a product?
A. To increase the marginal cost of the product
B. To decrease the marginal benefit of the product
C. To encourage consumers to purchase the product
D. To provide a more equal distribution of income


AACSB: Analytical Skills
Bloom's: Knowledge
Learning Objective: 1-1
Level: Easy
McConnell2 - Chapter 001 #185
Topic: Economics; economic perspective
7. How does human specialization contribute to an economy's output?
A. It makes use of differences in abilities
B. It is a process of creative destruction
C. It works like an "invisible hand"
D. It decreases derived demand


AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-2
Level: Moderate
McConnell2 - Chapter 002 #36
Topic: Characteristics of the market system



 Suppose a firm can produce 70 units of a hypothetical product, Zenia, by combining labor, land, capital, and
entrepreneurial ability in each of the four ways shown in the table below. Assume further that the firm can hire
labor at $3 per unit, land at $3 per unit, capital at $6 per unit, and entrepreneurship at $9 per unit.




McConnell2 - Chapter 002



8. Refer to the above table. If each of the 70 Zenias that are produced sells for $1 each, what will be the economic
profit for the firm?
A. $7
B. $10
C. $13
D. $19


AACSB: Analytic
Bloom's: Application
Learning Objective: 2-3
Level: Moderate
McConnell2 - Chapter 002 #75
Topic: Five fundamental questions
9. The influential book written by Adam Smith was:
A. The Worldly Philosophers
B. The Affluent Society
C. The Age of the Economist
D. The Wealth of Nations


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-4
Level: Easy
McConnell2 - Chapter 002 #100
Topic: Invisible hand



10. Which statement accurately summarizes the relationship between the prices of goods and their relative
scarcity?
A. The price of a good is a direct function of the relative scarcity of the good
B. The price of a good is an inverse function of the relative scarcity of the good
C. The price of a good is independent of the relative scarcity of the good
D. High prices lead to greater relative scarcity


AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-3
Level: Easy
McConnell2 - Chapter 002 #93
Topic: Five fundamental questions



11. A prerequisite of specialization is:
A. A capitalistic economic system
B. A medium of exchange
C. Free enterprise
D. Competition


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-2
Level: Moderate
McConnell2 - Chapter 002 #39
Topic: Characteristics of the market system
12. The simple circular flow model shows that workers, entrepreneurs, and the owners of land and capital offer
their services through:
A. Product markets
B. Resource markets
C. Employment agencies
D. Business firms


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-5
Level: Easy
McConnell2 - Chapter 002 #115
Topic: Circular flow model




McConnell2 - Chapter 003



13. Suppose in the market shown above the government imposes a price ceiling of $95. How many units will be
bought at the new price?
A. 79
B. 95
C. 105
D. 121


AACSB: Analytic
Bloom's: Application
Learning Objective: 3-5
Level: Easy
McConnell2 - Chapter 003 #255
Topic: Government-set prices
14. A decrease in the demand for a good is expected to cause:
A. Higher prices and decreased quantity sold
B. Higher prices and increased quantity sold
C. Lower prices and increased quantity sold
D. Lower prices and decreased quantity sold


AACSB: Analytic
Bloom's: Application
Learning Objective: 3-2
Level: Easy
McConnell2 - Chapter 003 #95
Topic: Change in demand versus change in quantity demanded




McConnell2 - Chapter 003



15. Refer to the above table. If demand increased by 4 units at each price, what would the new equilibrium price
and quantity be?
A. $3 and 4 units
B. $4 and 5 units
C. $5 and 7 units
D. $6 and 6 units


AACSB: Analytic
Bloom's: Application
Learning Objective: 3-4
Level: Moderate
McConnell2 - Chapter 003 #251
Topic: Changes in equilibrium price and quantity
16. Which of the following is a correct statement?
A. Price ceilings increase demand
B. Price ceilings create surpluses
C. Price floors create surpluses
D. Price floors increase supply


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 3-5
Level: Easy
McConnell2 - Chapter 003 #273
Topic: Government-set prices



17. A television station reports that more people are purchasing personal computers. A likely explanation for this
event would be a(n):
A. Increase in the demand for and the supply of computers
B. Decrease in the demand for and the supply of computers
C. Increase in the supply of computers and a decrease in the demand for computers
D. Decrease in the supply of computers and an increase in the demand for computers


AACSB: Analytic
Bloom's: Application
Learning Objective: 3-4
Level: Difficult
McConnell2 - Chapter 003 #174
Topic: Changes in equilibrium price and quantity



18. Other things being equal, the law of demand implies that as:
A. The demand for CDs increases, the price will decrease
B. Income increases, the quantity of CDs demanded will increase
C. The price of CDs increases, the quantity of CDs demanded will decrease
D. The price of CDs increases, the quantity of CDs demanded will increase


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 3-1
Level: Moderate
McConnell2 - Chapter 003 #6
Topic: Demand and demand curve
19. A market demand schedule for a product indicates that:
A. As the product's price falls, consumers buy less of the good
B. As a product's price rises, consumers buy less of other goods
C. There is a direct relationship between price and quantity demanded
D. There is an inverse relationship between price and quantity demanded


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 3-1
Level: Easy
McConnell2 - Chapter 003 #3
Topic: Demand and demand curve




McConnell2 - Chapter 003



20. Refer to the above diagram illustrating the market for corn. If the price in this market were to be fixed at $2 per
bushel, the part of the line marked B would represent a:
A. Surplus of 8,000 bushels
B. Shortage of 8,000 bushels
C. Surplus of 5,000 bushels
D. Shortage of 5,000 bushels


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 3-3
Level: Difficult
McConnell2 - Chapter 003 #140
Topic: Equilibrium; rationing function
McConnell2 - Chapter 003



21. Refer to the above table. If supply increased by 2 units at each price, what would the new equilibrium price
and quantity be?
A. $4 and 5 units
B. $4 and 6 units
C. $5 and 7 units
D. $6 and 7 units


AACSB: Analytic
Bloom's: Application
Learning Objective: 3-4
Level: Moderate
McConnell2 - Chapter 003 #248
Topic: Changes in equilibrium price and quantity



22. A surplus of any given commodity can be expected whenever the:
A. Prevailing price of the good is below the equilibrium price
B. Prevailing price of the good is above the equilibrium price
C. Quantity demanded of the good exceeds the quantity supplied
D. Prevailing market price of the good rises


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 3-3
Level: Difficult
McConnell2 - Chapter 003 #146
Topic: Equilibrium; rationing function
23. About what percentage of total personal consumption expenditures are for services?
A. 20
B. 36
C. 59
D. 75


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 4-1
Level: Moderate
McConnell2 - Chapter 004 #16
Topic: Personal and functional distribution of income



24. Is it reasonable that snow removal on streets is a service often provided by local governments?
A. Yes, in some cases it is prohibitively expensive for private companies to charge and collect from all of those
who benefit
B. Yes, private companies cannot afford to have all the equipment sitting idle throughout the other three seasons
C. No, it is not really necessary. People would pay just as much to private firms as they pay in local taxes
D. No, this is simply an example of government intervention into the market resulting from a desire to increase
governmental power


AACSB: Reflective
Bloom's: Application
Learning Objective: 4-4
Level: Difficult
McConnell2 - Chapter 004 #90
Topic: Public goods



25. What basic economic function does the government perform when it protects product quality?
A. Maintaining competition
B. Reallocating resources
C. Providing a public good
D. Providing a legal structure


AACSB: Analytic
Bloom's: Application
Learning Objective: 4-4
Level: Moderate
McConnell2 - Chapter 004 #50
Topic: Economic functions of government
26. If the production of a product results in sizable negative externalities, an appropriate government policy might
be to:
A. Subsidize the production of the good since resources are underallocated
B. Tax the producer and thus shift the supply curve to the left
C. Tax the consumer and thus shift the demand curve to the right
D. Subsidize the consumer since the good is being underconsumed


AACSB: Analytic
Bloom's: Application
Learning Objective: 4-4
Level: Difficult
McConnell2 - Chapter 004 #75
Topic: Externalities



27. Protective tariffs will tend to shift:
A. Supply toward foreign products
B. Demand toward foreign products
C. Demand toward domestic products
D. Have no effect on demand or supply


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 5-4
Level: Moderate
McConnell2 - Chapter 005 #104
Topic: Trade barriers



28. Which factor has contributed significantly to more international trade since the Second World War?
A. An increase in the size of government
B. An expansion of environmental laws
C. A fall in the rate of business profit
D. A general decline in tariffs


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 5-1
Level: Moderate
McConnell2 - Chapter 005 #27
Topic: Trade: volume, facilitating factors, participants
29. Government payments to domestic producers to reduce the world price of exported goods are called:
A. Import quotas
B. Protective tariffs
C. Nontariff barriers
D. Export subsidies


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 5-4
Level: Easy
McConnell2 - Chapter 005 #102
Topic: Trade barriers



30. A major criticism of the World Trade Organization is that it:
A. Raises output and production in developing nations at the expense of developed nations
B. Increases the living standards in member nations at the expense of non-member nations
C. Weakens collective bargaining and labor laws in member nations
D. Imposes costly environmental protections on the world economy


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 5-5
Level: Moderate
McConnell2 - Chapter 005 #123
Topic: Multilateral agreements: free trade zones; implications of the global economy



The table shows four different currencies and how much of each currency can be purchased with a U.S. dollar.




McConnell2 - Chapter 005
31. Refer to the above table. Which statement is correct about the change from year 1 to year 2?
A. The U.S. dollar appreciated against the Mexican peso
B. The U.S. dollar depreciated against the British pound
C. The U.S. dollar appreciated against the Japanese yen
D. The U.S. dollar appreciated against the euro


AACSB: Analytic
Bloom's: Application
Learning Objective: 5-3
Level: Moderate
McConnell2 - Chapter 005 #69
Topic: Foreign exchange market



32. Tariffs on an imported product:
A. Hurt domestic producers of the product
B. Hurt domestic consumers of the product
C. Hurt foreign consumers of the product
D. Benefit foreign producers of the product


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 5-4
Level: Moderate
McConnell2 - Chapter 005 #106
Topic: Trade barriers



33. Which statement is correct?
A. GATT provides short-term loans of foreign currencies to nations faced with temporary balance of payments
difficulties
B. The "most-favored-nation" clause in reciprocal trade agreements means that any tariff reduction granted one
specific nation will automatically apply to most other nations
C. During the Great Depression the flow of trade was stimulated by mutual reductions in tariffs and import quotas
among leading trade nations
D. The Smoot-Hawley Tariff Act exempted American exporters from the Sherman Antitrust Act


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 5-5
Level: Difficult
McConnell2 - Chapter 005 #117
Topic: Multilateral agreements: free trade zones; implications of the global economy
McConnell2 - Chapter 006



34. Refer to the above table. What is the producer surplus for all producers A to D?
A. $6
B. $13
C. $19
D. $24


AACSB: Analytic
Bloom's: Application
Learning Objective: 6-5
Level: Moderate
McConnell2 - Chapter 006 #168
Topic: Consumer and producer surplus




McConnell2 - Chapter 006
35. Refer to the above graph. If the demand increased:
A. Price and quantity would increase
B. Price and quantity would decrease
C. Price would stay the same and quantity would decrease
D. Price would stay the same and quantity would increase


AACSB: Analytic
Bloom's: Application
Learning Objective: 6-3
Level: Easy
McConnell2 - Chapter 006 #84
Topic: Elasticity of supply



36. An inferior good is best defined as a product for which the:
A. Cross elasticity of demand is negative
B. Income elasticity of demand is negative
C. Cross elasticity of demand is zero
D. Income elasticity of demand is zero


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 6-4
Level: Easy
McConnell2 - Chapter 006 #136
Topic: Cross and income elasticity
McConnell2 - Chapter 006



37. Refer to the above graphs. Which graph shows the immediate market period for supply?
A. Graph A
B. Graph B
C. Graph C
D. Graph D


AACSB: Analytic
Bloom's: Application
Learning Objective: 6-3
Level: Easy
McConnell2 - Chapter 006 #94
Topic: Elasticity of supply
38. If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a
price:
A. Increase will decrease total revenue in the short run but increase total revenue in the long run
B. Increase will increase total revenue in the short run but decrease total revenue in the long run
C. Decrease will increase total revenue in the short run but decrease total revenue in the long run
D. Decrease will decrease total revenue in the short run and decrease total revenue in the long run


AACSB: Reflective
Bloom's: Application
Learning Objective: 6-1
Level: Easy
McConnell2 - Chapter 006 #70
Topic: Determinants of price elasticity




McConnell2 - Chapter 006



39. Refer to the above graph. If the output level is now Q2, then the sum of the consumer and producer surplus is:
A. acd
B. ac0
C. abe0
D. bce + gcf


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 6-5
Level: Moderate
McConnell2 - Chapter 006 #174
Topic: Consumer and producer surplus
40. If the demand for a product is elastic, then:
A. A higher tax will generate more tax revenue
B. A higher tax will generate less tax revenue
C. Total revenue will decrease as price decreases
D. Total revenue will remain constant as price remains constant


AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 6-1
Level: Easy
McConnell2 - Chapter 006 #101
Topic: Applications of price elasticity
sample exam I fall 2010 Summary

                                          Category           # of Questions
AACSB: Analytic                                                   32
AACSB: Analytical Skills                                           6
AACSB: Reflective                                                  2
Bloom's: Application                                              16
Bloom's: Comprehension                                             2
Bloom's: Knowledge                                                22
Learning Objective: 1-1                                            4
Learning Objective: 1-3                                            1
Learning Objective: 1-5                                            1
Learning Objective: 2-2                                            2
Learning Objective: 2-3                                            2
Learning Objective: 2-4                                            1
Learning Objective: 2-5                                            1
Learning Objective: 3-1                                            2
Learning Objective: 3-2                                            1
Learning Objective: 3-3                                            2
Learning Objective: 3-4                                            3
Learning Objective: 3-5                                            2
Learning Objective: 4-1                                            1
Learning Objective: 4-4                                            3
Learning Objective: 5-1                                            1
Learning Objective: 5-3                                            1
Learning Objective: 5-4                                            3
Learning Objective: 5-5                                            2
Learning Objective: 6-1                                            2
Learning Objective: 6-3                                            2
Learning Objective: 6-4                                            1
Learning Objective: 6-5                                            2
Level: Difficult                                                   9
Level: Easy                                                       15
Level: Moderate                                                   16
McConnell2 - Chapter 001                                           6
McConnell2 - Chapter 002                                           7
McConnell2 - Chapter 003                                          14
McConnell2 - Chapter 004                                           4
McConnell2 - Chapter 005                                           8
McConnell2 - Chapter 006                                          11
Topic: Applications of price elasticity                            1
Topic: Change in demand versus change in quantity demanded         1
Topic: Changes in equilibrium price and quantity                   3
Topic: Characteristics of the market system                        2
Topic: Circular flow model                                         1
Topic: Consumer and producer surplus                               2
Topic: Cross and income elasticity                                                     1
Topic: Demand and demand curve                                                         2
Topic: Determinants of price elasticity                                                1
Topic: Economic functions of government                                                1
Topic: Economics; economic perspective                                                 2
Topic: Elasticity of supply                                                            2
Topic: Equilibrium; rationing function                                                 2
Topic: Externalities                                                                   1
Topic: Five fundamental questions                                                      2
Topic: Foreign exchange market                                                         1
Topic: Government-set prices                                                           2
Topic: Invisible hand                                                                  1
Topic: Macroeconomics and microeconomics                                               1
Topic: Multilateral agreements: free trade zones; implications of the global economy   2
Topic: Personal and functional distribution of income                                  1
Topic: Positive and normative economics                                                1
Topic: Production possibilities model                                                  1
Topic: Public goods                                                                    1
Topic: Trade barriers                                                                  3
Topic: Trade: volume, facilitating factors, participants                               1
Topic: Unemployment, growth, and the future                                            1

								
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