Economics 101 Questions

1834 Words8 Pages
ECON 101 MIDTERM EXAM 1 GROUP A Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Suppose Jeep Cherokees are a normal good. Then if household income increases, the direct result will be A) a decrease in the demand for Jeeps. C) an increase in the supply of Jeeps. Answer: B B) an increase in the demand for Jeeps. D) Both answers A and C are correct. 1) 2) The above figure shows the demand and supply curves for housing in City A. What would be the effects of a rent ceiling equal to $500 per month? A) a surplus equal to 3000 apartments B) a shortage equal to 250 apartments C) a shortage equal to 3000 apartments D) nothing because the rent ceiling has no effect on the equilibrium price and quantity Answer: C 2) 1 3) As a student of economics, when you speak of scarcity, you are referring to A) the inability of society to satisfy all human wants because of limited resources. B) the ability of society to continually make technological breakthroughs and increase production. C) the ability of society to consume all that it produces. D) the ability of society to employ all of its resources. Answer: A 4) Which of the following is not a resource of an economy? A) Land C) Central Planning Answer: C 5) When a market is in equilibrium, A) the supply curve has the same slope as the demand curve. B) there is no shortage and no surplus at the equilibrium price. C) the number of buyers is exactly equal to the number of sellers. D) everyone has all they want of the commodity in question. Answer: B 6) If the price elasticity of demand for airline travel is -0.52 in the short run and -1.46 in the long run, then the demand for airline travel is ________ in the short run and ________ in the long run. A) elastic; elastic C) inelastic; elastic Answer: C 7) Throughout the 1990s, the

More about Economics 101 Questions

Open Document