Name_________________

This exam has 32 questions.

Unless a question explicitly says otherwise, assume that all supply

curves slope upward and all demand curves slope downward.

True/False.

Mark box A for True and box B for False. Each correct answer adds
2 points to your score. Each blank answer gives you 1 point.

1. __ Opportunity cost is measured as the largest amount of money a

consumer is willing to spend on the good.

2. __ Two goods are substitute goods if movement down the demand

curve for one results in a decrease in demand for the
other.

3. __ An upward shift of the supply curve corresponds to an increase

in supply.

4. A price is not allowed to be higher if a binding price ceiling

is in effect.

5. An increase in supply causes an increase demand for that good.

6. A demand curve that always has the same price elasticity of

--demand will also always have the same slope.

7. A consumer will always purchase an additional unit of a good if

the marginal utility is greater than zero.
 Answer Key

Number Answer

1 False
2 True
3 False
4 True
5 False

6 False
7 False
8 True
9 False
10 True

11 E
12 D
13 A
14 A
15 A

16 A
17 A
18 B
19 D
20 D
21 C
22 A
23 C
24 A
25 D

26 A
27 C
28 A
29 C
30 E
31 D
32 A