So, how would you fair if you had to take my ECON 101 test? Here's some sample questions (grade yourself on a huge curve since you don't have the textbook and haven't been to class):
1. The Law of Supply requires:
a. quantity supplied to be greater at higher prices
b. supply curves to be negatively sloped
c. supply curves for inferior goods to slope downward
d. an increase in price to cause an increase in supply
2. An increase in the quantity demanded of hot chocolate could be caused by:
a. an increase in the price of coffee
b. a decrease in the price of hot chocolate
c. a decrease in average temperature
d. a decrease in the price of marshmallows
3. If the price of apples is above the equilibrium price (i.e. market price) then:
a. there is a shortage of apples
b. the quantity supplied of apples exceeds the quantity sold
c. the quantity demanded of apples will exceed the quantity supplied
d. the price of apples will tend to rise
4. Which of the following statements concerning a price ceiling is true?
a. a ceiling set above the market price will have no effect
b. a binding ceiling will create a surplus
c. a ceiling is designed to help sellers
d. all of the above
5. Owners of rent controlled housing may attempt to increase profits by:
a. allowing the rental units to deteriorate
b. converting rental housing to commercial property
c. taking under-the-table payments
d. all of the above
I'm particularly curious to see how my friend Holly's husband does on this quiz. He's a high school Economics teacher in SC (that should give you some clue). Also, my friend Shannon's husband was my Marketing mentor for years (he painfully taught me business economics on a daily basis).
Here's the answer key:
1. A, 2. B, 3. B, 4. A, 5. D
P.S. Question #3 was the one I got wrong. I still don't fully understand why. I think the questions flawed.
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