ECON1010 PRINCIPLES OF
MICROECONOMICS FINAL EXAM
PRACTICE QUESTIONS
Ceteris paribus means slopes down to the right (true or false) - false
Italy doesn't process enough bauxite to produce aluminum foil. This is an example of
a. absolute scarcity
b. economic scarcity - a
All of the following are variables that affect the demand for a product except
a. price of compliments
b. number of sellers
c. income of consumers
d. price of good x - b
Which of the following is not one of the categories of resources that was given in class
a. capital
b. land
c. labor
d. production
e. entrepreneurship - d
The Law of Demand
a. tells us the price of a good cannot be sold above the legal maximum
b. tells us that when the price of a good increases, demand for the good increases
c. tells us that a surplus of a good results in a store sale
d. tells us that producers can only sell products that have been obtained legally - b
To decide how to use our scarce resources to satisfy economic wants, our economy
primarily relies on
a. planning
b. political voting
c. production targets
d. prices - d
Which of the following is not one of the reasons for the law of demand holding true
a. substitution effect
, b. income effect
c. the law of diminishing returns
d. the law of diminishing marginal utility - c
Abstraction is necessary in economics because there are so many variables to keep
track of (true or false) - true
Microeconomics deals with the economic goals stability and equity (true or false) - false
Every economy must answer four basic questions. Which of the following is not one of
them?
a. how much to produce
b. who is going to produce
c. who to produce for
d. how to produce - b
There are four investment opportunities available to a company with excess cash to
invest: an investment that pays 8%; 6%; 4%; and 2%. If the company were to choose
the 6% option, what would their opportunity cost be?
a. 2%
b. 6%
c. 8%
d. 14% - c
This is an example of a positive statement: Students should come to class every day
(true or false) - true
Which of the following is consistent with the law of demand?
a. a decrease in the price of purses causes a decrease in the quantity of purses
demanded
b. an increase in the price of shoes causes a decrease in the quantity of shoes
demanded
c. an increase in the price of belts causes in increase in the quantity of belts demanded
d. a decrease in the price of lipstick causes no change in the quantity of lipstick
demanded - b
Which expression is another way of saying marginal benefit
a. total benefit
b. extra benefit
c. loss
d. profit - b
In class, a list of concepts was constructed that you could see illustrated in the PPC. All
of the following concepts made it on the list except one. Which one?
a. scarcity
b. price
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