11. Which of the following would an economist classify as capital?

a. 100 shares of Microsoft stock

b. a $50 bill

c. a credit card

d. a lawyer's personal computer

e. a bauxite mine in Jamaica

12. "There should be less discrimination against women" is an example of a positive statement.

a. True

b. False

13. Which of the following statements about the substitution effect of a price change is true?

a. It is caused by a change in relative prices.

b. It affects the consumer's ability, rather than willingness, to purchase a good when the price falls.

c. It shows how consumers substitute more expensive goods for cheaper ones when their incomes increase.

d. It is usually equal to the income effect.

e. It may cause the consumer to buy less of the good when its price falls.

14. If the price of the good described in Exhibit 0023 is $1.20, then there is a

a. shortage of 30 units

b. surplus of 30 units

c. shortage of 60 units

d. surplus of 60 units

e. . surplus of 20 units

15. A price floor set below the equilibrium price will result in a surplus.

a. True

b. False

16. Consider the information in Exhibit 0077. What is the marginal utility of the third pretzel?

a. 5

b. 10

c. 15

d. -0.15

e. 55

17. A utility-maximizing consumer equalizes marginal utilities across all goods.

a. True

b. False

18.Use the information in Exhibit 0059 and the midpoint formula to calculate the value of price elasticity of demand for Good A.

a. -5/2

b. -11/3

c. -3/10

d. -10/3

e. -19/11

19. If demand is elastic, a fall in price leads to a fall in total revenue.

a. True

b. False

20. Suppose James is a heroin addict. His demand curve for heroin is likely to be

a. nearly vertical

b. horizontal

c. elastic

d. unit elastic

e. upward sloping