1. The production of more physical and human capital will have which of the following results?

a.Future economic growth is enhanced

b.Future production possibility frontiers will be shifted outward

c.Less goods for consumption today will be produced

d.All of these will occur

2. A subsidy paid to the sellers of coffee will:

a.Reduce the equilibrium price of coffee and reduce the equilibrium quantity

b.Reduce the equilibrium price of coffee and increase the equilibrium quantity

c.Increase the equilibrium price of coffee and reduce the equilibrium quantity

d.Increase the equilibrium price of coffee and increase the equilibrium quantity

3. If price increases from $3.00 to $4.00, and quantity demanded falls from 600 to 200 cups:

a.The price elasticity of demand will (according to the mid-point method) be 3.5 and elastic

b.The price elasticity of demand will (according to the mid-point method) be 3.5 and inelastic

c.The price elasticity of demand will (according to the mid-point method) be 0.29 and elastic

d.The price elasticity of demand will (according to the mid-point method) be 0.29 and inelastic

4. If the supply of land is fixed, a tax on land would be paid:

a.Only by workers

b.Entirely by the renters or users of the land

c.Partly by landowners and partly by land users

d.Entirely by the landowners

5. If consumer income increases and wine is a normal good then:

a.Both the equilibrium price and the producer surplus will increase

b.The equilibrium price will increase and the producer surplus will decrease

c.Both the equilibrium price and the producer surplus will decrease

d.The equilibrium price will decrease and the producer surplus will increase