The last samurai

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Macro Fall 2009 Test 1 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Sophia is planning her activities for a hot summer day. She would like to go to the local swimming pool and see the latest blockbuster movie, but because she can only get tickets to the movie for the same time that the pool is open she can only choose one activity. This illustrates the basic principle that a. people respond to incentives. b. rational people think at the margin. c. people face tradeoffs. d. improvements in efficiency sometimes come at the expense of equality. ____ 2. Which of the following phrases best captures the notion of efficiency? a. absolute fairness b. equal…show more content…
c. does not shift when the price of hot dogs changes because the price of hot dogs is measured on the vertical axis of the graph. d. does not shift when the price of hot dogs changes because the quantity demanded of hot dogs is measured on the horizontal axis of the graph. ____ 20. Which of the following is not a determinant of the demand for a particular good? a. the prices of related goods b. income c. tastes d. the prices of the inputs used to produce the good ____ 21. If Francis experiences a decrease in his income, then we would expect Francis’s demand for a. each good he purchases to remain unchanged. b. normal goods to decrease. c. luxury goods to increase. d. inferior goods to decrease. ____ 22. Suppose you like to make, from scratch, pies filled with banana cream and vanilla pudding. You notice that the price of bananas has increased. How would this price increase affect your demand for vanilla pudding? a. It would decrease. b. It would increase. c. It would be unaffected. d. There is insufficient information given to answer the question. ____ 23. A movement along the supply curve might be caused by a change in a. technology. b. input prices. c. expectations about future prices. d. the price of the good or service that is being supplied. ____ 24. If a surplus exists in a market, then we know that the actual
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