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(GCU) ECN 361 Microeconomics - Latest Final Exam Review Q & S 2024.

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(GCU) ECN 361 Microeconomics - Latest Final Exam Review Q & S 2024.(GCU) ECN 361 Microeconomics - Latest Final Exam Review Q & S 2024.(GCU) ECN 361 Microeconomics - Latest Final Exam Review Q & S 2024.

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  • November 7, 2024
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ECN 361




Microeconomics




LATEST FINAL EXAM REVIEW
Q&S




©2024/2025

,1. Which of the following describes the concept of "price elasticity
of demand"?
- A) It measures the change in quantity supplied with a change in
price.
- B) It is the degree to which the quantity demanded of a good
changes as its price changes.
- C) It refers to the slope of the supply curve.
- D) It is determined by the elasticity of supply.
> Answer: B
> Rationale: Price elasticity of demand measures the
responsiveness of the quantity demanded to a change in price.


2. In monopolistic competition, firms differentiate their products
in order to:
- A) Capture a greater share of market power.
- B) Engage in price-fixing.
- C) Eliminate consumer choice.
- D) Ensure maximum efficiency.
> Answer: A


©2024/2025

, > Rationale: Product differentiation allows firms in monopolistic
competition to capture a greater share of market power and earn
higher profits.


3. Which of the following is an example of a perfectly competitive
market?
- A) Automobile market
- B) Wheat market
- C) Smartphone market
- D) Airline industry
> Answer: B
> Rationale: The wheat market is often cited as an example of
perfect competition due to numerous producers and a
homogeneous product.


4. The substitution effect occurs when:
- A) Consumers replace cheaper goods with more costly ones.
- B) A rise in the price of a good causes consumers to switch to a
cheaper substitute.
- C) A drop in income causes a shift in consumption preferences.
- D) Consumers ignore price changes and maintain their current
level of consumption.
> Answer: B
©2024/2025

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