1 The effect on the new car market of a lower price for used cars can best be described by

a.a shift in the supply curve to the right, decreasing the equilibrium price

b.a shift in both the supply and demand curves to the right, leaving the equilibrium price the same

c.a shift in the demand curve to the left, decreasing the equilibrium price

d.a shift in the supply curve to the left, increasing the equilibrium price

2 Suppose a 40 percent increase in the quantity of quinoa demanded is observed as a result of a 10 percent decline in its price. Then the price elasticity of demand for quinoa is

a.elastic and equal to 4.

b.inelastic and equal to 0.25.

c.elastic and equal to 0.25.

d.inelastic and equal to 4

3The quantity demanded of a product rises from 200 000 to 300 000 units when its price falls from $4 to $1. The numerical value of the price of elasticity of demand for this product is therefore:

a.0.67.

b.3.00

c.0.17

d.0.33.

4 Supply for a particular product

a.has the same elasticity in the short run and long run

b.is more elastic in the long run than in the short run

c.is more elastic in the short run than in the long run

d.is more elastic when the product is a necessity than when it is a luxury

5 To economists, the main difference between "the short run" and "the long run" is that:

a.in the short run all resources are fixed, while in the long run all resources are variable

b.fixed costs are more important to decision making in the long run than they are in the short run

c.the law of diminishing marginal returns applies in the long run but not in the short run

d.in the long run, all resources are variable while in the short run, at least one resource is fixed.

6 Which of the following statements is correct

a.When total product is rising, both average product and marginal product must also be rising

b.When marginal product is falling, total product must be falling

c.When marginal product is falling, average product must also be falling.

d.Marginal product rises faster than average product and also falls faster than average product

7 Output

0

1

2

3

4

5

6

Total Cost ($)

24

33

41

48

54

61

69

The average cost of producing 3 units of output is

a.$14

b.$13.67

c.$16.

d.$12

7 An increase in the wages of construction workers will

a.shift the supply curve of new homes to the left

b.decrease the average annual incomes of construction workers

c.shift the demand curve for construction workers to the right

d.lead to an increase the quantity supplied of new homes.

8 Which of the following does not cause the demand for product K to change

a.a change in the price of substitute product J

b.a change in consumer preferences

c.a change in the price of complementary product L.

d.a change in the price of K