ECO 2023, Principles of Microeconomics Exam 3 version B Questions And Answers (2026/2027)
ECO 2023, Principles of Microeconomics Exam 3 version B Questions And Answers (2026/2027) Please read each problem carefully. Fill in the letter on the scantron sheet indicating the best answer. Remember to draw graphs to help you figure out the answers! (2.5 points each) The SMALC questions are mandated and written by the Department of Economics. They are not extra credit. 1. Employers can hire low- and/or high-skill workers. The market for low-skill workers is in equilibrium, and the government imposes a minimum wage of $25 per hour, resulting in a surplus of low-skill labor. What happens in the market for high skill labor? a. Demand shifts to the right, and wages rise. b. Demand shifts to the left, and wages rise. c. Supply shifts to the left, and wages rise. d. Nothing changes. 2. Public goods are often underproduced by the market because… a. Governments make competition illegal. b. the public does not really value the good. c. businesses cannot produce public goods profitably due to free riders. d. public goods are rivalrous and excludable. 3. When a positive externality occurs, a. the marginal cost to society is greater than the private marginal cost, which results in the market quantity being lower than the efficient amount. b. the marginal cost to society is less than the private marginal cost, which results in the market quantity being greater than the efficient quantity. c. People do an inefficiently low amount of a good thing. d. People do an inefficiently large amount of a bad thing. 4. Each of the graphs below shows the demand curve faced by an individual firm. Which one is most likely to represent the demand curve faced by a monopoly? Continues...
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