1.)Demand increases for the product of a perfectly competitive market and demand increases for the product of a monopoly. How are the responses of the two markets different?

Select one:

a.Quantity supplied by each producer will be higher than before the increase in demand in the shot run in monopoly but not in perfect competition

b.Supply will increase in the long run in perfect competition but not in monopoly

c.Profits will increase in the short run in monopoly but not in perfect competition

d.Price will increase in the short run in perfect competition but not in monopoly.

2.) There are two ways to eat: 1)dining, which involves eating as the primary activity, such as a sit-down meal at home or in a restaurant; and 2)grazing, which is eating as a secondary activity to something else, such as watching TV or driving. Who is most likely to dine and who is most likely to graze,other things being equal?

Select one:

a.People who have inelastic demand for food are more likely to graze and people who have elastic demand for food are more likely to dine.

b.People who earn high wages are more likely to dine and people who earn low wages are more likely to graze.

c.People who earn high wages are more likely to graze and people who earn low wages are more likely to dine.

d.People who have inelastic demand for food are more likely to dine and people who have elastic demand for food are more likely to graze.

3.)A college student misplaced her iPod touch. She posted signs in buildings around campus with her name and phone number, offering a $50 reward to anyone who found the iPod touch and returned it to her. Shortly thereafter, another student came along and posted signs with his name and phone number, offering a $51 reward to anyone who found the lost iPod touch and returned it to him. It has been said that this incident perfectly illustrates what Economics is All About. Ok, so what is Economics All About?

Select one:

a.Supply and Demand

b.People Respond to Incentives

c.Perfect Competition responds to consumers' desires

d.Every action involves an opportunity cost

4.) When would the quantity of golf balls bought and sold be the highest (other things being equal)?

Select one:

a.there is neither a price ceiling nor a price floor in the golf ball market

b.the government sets a price ceiling in the golf ball market

c.the government sets a price floor in the golf ball market, with no further government action

d.It is impossible to tell from the information given

5.)On average, taller people (of both genders) earn higher incomes than do shorter people, ceteris paribus. What is the most likely explanation for this fact?

Select one:

a.Taller people receive compensating differentials for their height

b.The supply of taller people is greater than the supply of shorter people

c.Employers in labor markets are discriminating against shorter people

d.Taller people are more productive than are shorter people