1.The fact that the typical movie theatre charges people for popcorn but does not charge them to use the restrooms is an example of which of the four Cs?

Select one:

a. Custom.

b. Cooperation

c. Command.

d.Competition.

2.The convex shape of an indifference curve represents diminishing marginal rate of substitution

Select one:

True

False

3.Suppose both demand and supply increases by the same magnitude? Which of the following statement is not true?

Select one:

a. The quantity traded will definitely increase.

b. The market will move from one equilibrium to another equilibrium.

c. The quantity traded will increase but there will be no change in price.

d. The change in price is indeterminate.

4.A simultaneous increase in both the demand for and supply of a good will lead to

Select one:

a. changes in both the quantity traded and price are indeterminate

b. an increase in quantity traded but change in price is indeterminate

c. an increase in quantity traded and fall in price

d. a decrease in quantity traded and no change in price

5.What is a price control?

Select one:

a. A government regulation to set either a maximum or minimum price for a product.

b. The price of a product which is set by the government.

c. A government regulation stipulating the maximum price which can be charged for a product.

d. A government regulation stipulating the minimum price which can be charged for a product.

6.Cross price elasticity is negative for substitute goods and positive for complementary goods

Select one:

True

False

7.Which of the following statements is true about the advantages gained through the division of labour?

Select one:

a. It was first thought of by David Ricardo in his example of a hat factory.

b.

Its application results in both the marginal and average product of labour increasing.

c.It causes the marginal product of labour to increase, but it has no effect on the average product of labour.

d. It is an idea that has little application in the real world.

8.Suppose that average incomes increased from $30,000 to $34,000, and the quantity demanded of a product increased from 45 to 55. What type of product must this be?

Select one:

a.Inferior product.

b.Substitute product.

c. Superior product.

d. Luxury product.

e. Necessity.