1.Suppose thatdemandis represented by the equation Q = 16000 - 2000P andsupplyis represented by Q = 4000P - 8000. Therefore,equilibrium priceis

A.$4

B.$1

C.$2

D.$8

2.Assume that thetotal cost increase from $80 million to $89 millionwhen the government widens the 3-lane highways to 6-lane highways but thetotal benefits increase from $50 million to $62 million. Thispublic project is considered

A. Justifiable because the total cost $29 million is less than the total benefits ($72 million)

B. Optimal because the Marginal Cost {MC} = Marginal Benefit {MB}

C. Beneficial because MB ($12 million) is greater than MC ($9 million)

D. Not justifiable because MB ($72 million) exceeds MC ($29 million)

3.TheLaw of Supplydescribesdirect relationshipbetween thepriceand thequantity supplied, other things remaining the same.

A.True

B.False

4.Consumers expressself-interestwhen they:

A.Minimize business losses

B.Expect high salary

C.Seek the lowest price for the product but maximum utility

D.Collect economic profits

5.Lauriesays that "Theminimum wagerate in Ontario is $14per hour.The employers are required by law to pay at least$14 per hour to the employees."Kimble argues that "The minimum wage rateshouldbe increased furtherbecauseof an increase in the cost of living" We canconcludethat:

A.Both statements belong to the normative economics

B.Laurie's statement is related to the positive economics but Kimble's statementbelongs to the normative economics

C.Laurie's statement is related to the normative economics but Kimble'sstatementbelongs to the positive economics

D.Both statementsare related to the positiveeconomiocs

6.Robertsonis a shopkeeper in a Flea market. He waswilling to accept the minimum selling price $60for a DVD player. However, onecustomer purchased it for $65.In this scenario

A.Consumer surplus is $5

B.Consumer surplus is $60

C.Producer surplus is $65

D.Producer surplus is $5

7.Costfunctionof Raymond Company is given ascost = $1500 + 15% of sales revenue. Raymond Companysold 1600 units at the price of $4 per unit.The costof Raymond

A.$2460

B.$3100

C.$6400

D.$1500

8.Once apublic service or product is provided, everyone can obtain the benefits even if everyone does not pay for it and there is no effective way to check it.This type ofscenario is knownas

A.Asymmetric information

B.Free Rider problem

C.Over allocation

D.Trustworthy buyers