Among the fundamental concepts in economics is
(a) opportunity cost.
(b) marginal analysis.
(c) efficient markets.
(d) (a) and (b). correct answers D
Which of the following is a positive (descriptive) economics question?
(a) Will unemployment amongst teenagers increase if the minimum wage i...
ECON 130 Test 1 || Already Passed.
Among the fundamental concepts in economics is
(a) opportunity cost.
(b) marginal analysis.
(c) efficient markets.
(d) (a) and (b). correct answers D
Which of the following is a positive (descriptive) economics question?
(a) Will unemployment amongst teenagers increase if the minimum wage is raised?
(b) Should the minimum wage be set a 'living wage'?
(c) Wouldn't it be more equitable if the minimum wage rose automatically with
the cost of living?
(d) Wouldn't it be better to subsidise job-training programmes, rather than raise
the minimum wage? correct answers A
On an individual's indifference-curve diagram, a change in the slope of the budget
constraint indicates
(a) a change in income.
(b) a change in relative prices.
(c) a change in the aggregate price level.
(d) neither (a) nor (b) nor (c). correct answers B
When a consumer's disposable income falls, the individual's demand curve for a
particular commodity
(a) shifts to the left.
(b) shifts to the right.
(c) does not necessarily shift.
(d) (a) or (b) or (c). correct answers D
If a household's income and the prices of all goods it consumes doubles, its budget
constraint will
(a) shift out parallel to the old one.
(b) be unaffected.
(c) pivot at the y-intercept.
(d) shift in parallel to the old one. correct answers B
If A is an inferior good, in absolute terms,
(a) the substitution effect is greater than the income effect.
(b) the substitution effect is equal to the income effect.
(c) the substitution effect is less than the income effect.
(d) (a) or (b) or (c). correct answers A
If B is a normal good, in absolute terms,
(a) the substitution effect is greater than the income effect.
(b) the substitution effect is equal to the income effect.
, (c) the substitution effect is less than the income effect.
(d) (a) or (b) or (c). correct answers C
Consider an individual that can consume two goods, bus tickets and coffee, and who
always has positive marginal utility for both goods. Suppose a person currently
buys 10 bus tickets and 10 cups of coffee per week. She is indifferent between this
consumption bundle and the bundle consisting of 9 bus tickets and 12 cups of coffee.
From this, we can infer that
(a) she would prefer giving up one bus ticket to get three extra cups of coffee.
(b) she is indifferent between her current bundle and a bundle with one less bus
ticket and one extra cup of coffee.
(c) she prefers one extra cup of coffee to one extra bus ticket.
(d) None of the above is correct. correct answers A
21. Suppose an individual consumes beer and peanuts. If the price of peanuts increases,
(a) the relative price of beer increases.
(b) the relative price of beer decreases.
(c) there is no change in the relative price of beer and peanuts.
(d) the price of beer will also rise. correct answers B
A backward-bending labour supply curve indicates that as the wage rises
(a) leisure becomes less scarce on the upward sloping section of the supply curve.
(b) more hours are supplied on the downward sloping section of the supply curve.
(c) the opportunity cost of an hour of leisure falls.
(d) above a certain wage fewer hours are supplied. correct answers D
At the minimum point of a firm's short-run average total cost curve
(a) it is at the short-run equilibrium position.
(b) it will have zero output.
(c) average total cost is minimised for a particular amount of (fixed) capital.
(d) average total cost is minimised for a particular level of output. correct answers C
Suppose that a production function exhibits increasing returns to scale. If a firm's
inputs were doubled from their current level, the firm's output
(a) would more than double.
(b) would double.
(c) would increase by less, in percentage terms, than the change in inputs.
(d) None of the above. correct answers A
The production isoquant shows a set of efficient production techniques
(a) that cost the same.
(b) that produce the same level of output.
(c) that produce the same level of output at the same cost.
(d) that maximise the firms utility. correct answers B
The marginal cost curve intersects the average (total) cost curve at the
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