UCLA ECONOMICS 1 MIDTERM
EXAM 2026
139 Questions with Answers and Detailed Rationales
100 PERCENT GUARANTEED PASS
INSTANT DOWNLOAD ANSWERS INCLUDED
IMPORTANCE OF THIS DOCUMENT
This comprehensive examination preparation guide has been meticulously developed to help you succeed in the
UCLA ECONOMICS 1 MIDTERM EXAM 2026. It contains 139 carefully selected questions that reflect the most
current exam content and testing strategies. Each question is accompanied by a correct answer and a detailed
rationale that explains the underlying pathophysiology, pharmacology, or clinical reasoning.
Self-Assessment – Test your knowledge and Exam Preparation – Familiarize yourself with the
identify areas requiring further question format and content
study areas
Concept Reinforcement – Deepen your Confidence Building – Develop test-taking
understanding through strategies and reduce
evidence-based exam anxiety
rationales
Time Management – Practice answering
questions under simulated
exam conditions
Review Summary 139 Questions
Foundations - Application - UCLA Economics 1 2026 Economics Undergraduate YEAR 1 Principles OF
Economics Micro & Macro
All answers with rationales
,Table of Contents
Content Area Questions Key Topics
Principles OF Economics 1-24 Price, Rises, Competitive, Market, Likely
AND Economic Thinking
Supply AND Demand Market 25-48 Increase, Price, Government, Market, Money Supply
Forces AND Equilibrium
Elasticity AND ITS 49-72 Price, Units, Rises, Government, Economy
Applications
Consumer Behavior AND 73-96 Price, Units, Equilibrium, Market, Quantity
Utility Maximization
Production Costs AND Profit 97-120 Price, Quantity, Demanded, Increase, Rises
Maximization
Market Structures Perfect 121-139 Price, Market, Coffee, Quantity, Marginal
Competition AND Monopoly
TOTAL 139 All questions include answers and detailed rationales
,Section A - Principles OF Economics AND Economic
Thinking
Q1.
A student has $60 to spend on either concert tickets ($20 each) or movie tickets ($10
each). If she buys 2 concert tickets, what is the opportunity cost of the second concert
ticket in terms of movie tickets?
A. 1 movie ticket B. 2 movie tickets
C. 4 movie tickets D. 6 movie tickets
Correct: B - 2 movie tickets
Rationale:The opportunity cost of one concert ticket is the number of movie tickets that could
have been purchased with the same money. Since a concert ticket costs $20 and a movie
ticket costs $10, the opportunity cost of the second concert ticket is $20 / $10 = 2 movie
tickets. The other options misapply the ratio or confuse total spending with marginal cost.
Why the other answers are wrong:
A. This would be the cost if a concert ticket cost $10, which is incorrect.
C. This would be the cost if a concert ticket cost $40, which is incorrect.
D. This confuses total spending on concerts with the marginal opportunity cost of one ticket.
Reference: Mankiw, N.G. (2024). Principles of Economics, 10th Ed., Ch. 1
Q2.
If the price of coffee increases by 10% and the quantity demanded decreases by 5%, what
is the price elasticity of demand for coffee (using the midpoint method)?
A. 0.33 B. 0.50
C. 2.00 D. 5.00
Correct: B - 0.50
Rationale:Price elasticity of demand = percentage change in quantity demanded /
percentage change in price. Using the midpoint method, the magnitude is |5% / 10%| = 0.50.
This indicates inelastic demand. The other options either invert the ratio or misapply the
midpoint formula.
Why the other answers are wrong:
A. This would be the elasticity if quantity changed by 3.3% for a 10% price change.
C. This inverts the ratio, incorrectly using price change over quantity change.
D. This is the reciprocal of 0.20, a common calculation error.
Reference: Mankiw, N.G. (2024). Principles of Economics, 10th Ed., Ch. 5
Page 3
, Section A - Principles OF Economics AND Economic Thinking
Q3.
A price ceiling set below the equilibrium price in a competitive market will most likely
result in:
A. a surplus of the good B. a shortage of the good
C. no change in market outcomes D. an increase in producer surplus
Correct: B - a shortage of the good
Rationale:A binding price ceiling (set below equilibrium) prevents the price from rising to
equilibrium, causing quantity demanded to exceed quantity supplied, creating a shortage.
Surpluses occur with price floors, and producer surplus typically falls because producers
receive a lower price and sell less.
Why the other answers are wrong:
A. A surplus results from a price floor, not a ceiling.
C. Only a non-binding ceiling (above equilibrium) leaves the market unchanged.
D. Producer surplus decreases because the price is lower and quantity sold is reduced.
Reference: Mankiw, N.G. (2024). Principles of Economics, 10th Ed., Ch. 6
Q4.
Which of the following best illustrates the concept of an externality?
A. A firm's cost of raw materials rising due to B. A factory's pollution affecting the health of
inflation. nearby residents.
C. A consumer's decision to buy a generic D. A government subsidy paid to domestic
instead of a brand-name product. farmers.
Correct: B - A factory's pollution affecting the health of nearby residents.
Rationale:An externality is a cost or benefit that affects a third party not directly involved in
the transaction. Pollution from a factory imposes a negative externality on nearby residents.
The other options describe private costs, consumer choice, or government transfers, not
external effects.
Why the other answers are wrong:
A. This is a private cost to the firm, not an external effect on third parties.
C. This is a private consumption decision with no third-party impact.
D. A subsidy is a government policy, not an externality itself.
Reference: Mankiw, N.G. (2024). Principles of Economics, 10th Ed., Ch. 10
Q5.
If a country's nominal GDP grows by 6% and the GDP deflator rises by 4%, what is the
approximate real GDP growth rate?
Page 4
EXAM 2026
139 Questions with Answers and Detailed Rationales
100 PERCENT GUARANTEED PASS
INSTANT DOWNLOAD ANSWERS INCLUDED
IMPORTANCE OF THIS DOCUMENT
This comprehensive examination preparation guide has been meticulously developed to help you succeed in the
UCLA ECONOMICS 1 MIDTERM EXAM 2026. It contains 139 carefully selected questions that reflect the most
current exam content and testing strategies. Each question is accompanied by a correct answer and a detailed
rationale that explains the underlying pathophysiology, pharmacology, or clinical reasoning.
Self-Assessment – Test your knowledge and Exam Preparation – Familiarize yourself with the
identify areas requiring further question format and content
study areas
Concept Reinforcement – Deepen your Confidence Building – Develop test-taking
understanding through strategies and reduce
evidence-based exam anxiety
rationales
Time Management – Practice answering
questions under simulated
exam conditions
Review Summary 139 Questions
Foundations - Application - UCLA Economics 1 2026 Economics Undergraduate YEAR 1 Principles OF
Economics Micro & Macro
All answers with rationales
,Table of Contents
Content Area Questions Key Topics
Principles OF Economics 1-24 Price, Rises, Competitive, Market, Likely
AND Economic Thinking
Supply AND Demand Market 25-48 Increase, Price, Government, Market, Money Supply
Forces AND Equilibrium
Elasticity AND ITS 49-72 Price, Units, Rises, Government, Economy
Applications
Consumer Behavior AND 73-96 Price, Units, Equilibrium, Market, Quantity
Utility Maximization
Production Costs AND Profit 97-120 Price, Quantity, Demanded, Increase, Rises
Maximization
Market Structures Perfect 121-139 Price, Market, Coffee, Quantity, Marginal
Competition AND Monopoly
TOTAL 139 All questions include answers and detailed rationales
,Section A - Principles OF Economics AND Economic
Thinking
Q1.
A student has $60 to spend on either concert tickets ($20 each) or movie tickets ($10
each). If she buys 2 concert tickets, what is the opportunity cost of the second concert
ticket in terms of movie tickets?
A. 1 movie ticket B. 2 movie tickets
C. 4 movie tickets D. 6 movie tickets
Correct: B - 2 movie tickets
Rationale:The opportunity cost of one concert ticket is the number of movie tickets that could
have been purchased with the same money. Since a concert ticket costs $20 and a movie
ticket costs $10, the opportunity cost of the second concert ticket is $20 / $10 = 2 movie
tickets. The other options misapply the ratio or confuse total spending with marginal cost.
Why the other answers are wrong:
A. This would be the cost if a concert ticket cost $10, which is incorrect.
C. This would be the cost if a concert ticket cost $40, which is incorrect.
D. This confuses total spending on concerts with the marginal opportunity cost of one ticket.
Reference: Mankiw, N.G. (2024). Principles of Economics, 10th Ed., Ch. 1
Q2.
If the price of coffee increases by 10% and the quantity demanded decreases by 5%, what
is the price elasticity of demand for coffee (using the midpoint method)?
A. 0.33 B. 0.50
C. 2.00 D. 5.00
Correct: B - 0.50
Rationale:Price elasticity of demand = percentage change in quantity demanded /
percentage change in price. Using the midpoint method, the magnitude is |5% / 10%| = 0.50.
This indicates inelastic demand. The other options either invert the ratio or misapply the
midpoint formula.
Why the other answers are wrong:
A. This would be the elasticity if quantity changed by 3.3% for a 10% price change.
C. This inverts the ratio, incorrectly using price change over quantity change.
D. This is the reciprocal of 0.20, a common calculation error.
Reference: Mankiw, N.G. (2024). Principles of Economics, 10th Ed., Ch. 5
Page 3
, Section A - Principles OF Economics AND Economic Thinking
Q3.
A price ceiling set below the equilibrium price in a competitive market will most likely
result in:
A. a surplus of the good B. a shortage of the good
C. no change in market outcomes D. an increase in producer surplus
Correct: B - a shortage of the good
Rationale:A binding price ceiling (set below equilibrium) prevents the price from rising to
equilibrium, causing quantity demanded to exceed quantity supplied, creating a shortage.
Surpluses occur with price floors, and producer surplus typically falls because producers
receive a lower price and sell less.
Why the other answers are wrong:
A. A surplus results from a price floor, not a ceiling.
C. Only a non-binding ceiling (above equilibrium) leaves the market unchanged.
D. Producer surplus decreases because the price is lower and quantity sold is reduced.
Reference: Mankiw, N.G. (2024). Principles of Economics, 10th Ed., Ch. 6
Q4.
Which of the following best illustrates the concept of an externality?
A. A firm's cost of raw materials rising due to B. A factory's pollution affecting the health of
inflation. nearby residents.
C. A consumer's decision to buy a generic D. A government subsidy paid to domestic
instead of a brand-name product. farmers.
Correct: B - A factory's pollution affecting the health of nearby residents.
Rationale:An externality is a cost or benefit that affects a third party not directly involved in
the transaction. Pollution from a factory imposes a negative externality on nearby residents.
The other options describe private costs, consumer choice, or government transfers, not
external effects.
Why the other answers are wrong:
A. This is a private cost to the firm, not an external effect on third parties.
C. This is a private consumption decision with no third-party impact.
D. A subsidy is a government policy, not an externality itself.
Reference: Mankiw, N.G. (2024). Principles of Economics, 10th Ed., Ch. 10
Q5.
If a country's nominal GDP grows by 6% and the GDP deflator rises by 4%, what is the
approximate real GDP growth rate?
Page 4
