ECON Practice Test Actual Test Questions
1. Suppose that in a small town in May, the price of a double espresso romano was $2.50 and 1500 cups
were consumed. In the same small town in June, the price of a double espresso romano was $2.25 and
1600 cups were consumed. Which of the following alone can explain the change in the espresso market
from May to June?
a. The world price of coffee, and input in the production of espresso romano, increased
b. Incomes in the town decreased and espresso romano is a normal good
c. A new coffee house opened in the town
d. Incomes in the town decreased and espresso romano is an inferior good
2. Suppose the productivity of workers in the yellow rubber duckie industry decreases. Everything else
held constant, the _________ yellow rubber duckies will _________.
a. Quantity demanded of; decrease
b. Quantity demanded of; increase
c. Demand for; increase
d. Demand for; decrease
3. If the ________ elasticity of demand for goods x and y is _______ than zero, then x and y are normal
goods.
a. Income; less
b. Crossprice; greater
c. Crossprice; less
d. Income; greater
e. Price; greater
4. Suppose Tony, a rational painter, has a reservation price of $1500 for his painting “Banana Head.”
Suppose further that a potential client liked the painting and made him an offer, but Tony refused to sell
it. We know with certainty that the client’s offer was ________ $1500.
a. Greater than or equal to
b. Equal to
c. Greater than
d. Less than
e. Less than or equal to
5. Suppose you observe a market in which, at a given point in time, the quantity consumers are willing and
able to purchase is ___________ the quantity producers are willing and able to sell. Thus we say that
there is a _______ of the good and over time, everything else held constant, the price in the market will
decrease.
a. Greater than; shortage
b. Less than; shortage
c. Greater than; surplus
d. Less than; surplus
6. “Labor mobility in the US is down, as fewer workers quit to seek different jobs and employers both hire
and fire fewer people than they used to” is an example of a _______ statement about a __________
issue.
a. Normative; microeconomic
b. Positive; microeconomic
c. Normative; macroeconomic
d. Positive; macroeconomic
7. Suppose a price ceiling is imposed on a market that was in equilibrium when the ceiling was imposed. If
the price of the good ______ after imposition of the ceiling, then it can be concluded that the ceiling is
______, everything else held constant.
1. Suppose that in a small town in May, the price of a double espresso romano was $2.50 and 1500 cups
were consumed. In the same small town in June, the price of a double espresso romano was $2.25 and
1600 cups were consumed. Which of the following alone can explain the change in the espresso market
from May to June?
a. The world price of coffee, and input in the production of espresso romano, increased
b. Incomes in the town decreased and espresso romano is a normal good
c. A new coffee house opened in the town
d. Incomes in the town decreased and espresso romano is an inferior good
2. Suppose the productivity of workers in the yellow rubber duckie industry decreases. Everything else
held constant, the _________ yellow rubber duckies will _________.
a. Quantity demanded of; decrease
b. Quantity demanded of; increase
c. Demand for; increase
d. Demand for; decrease
3. If the ________ elasticity of demand for goods x and y is _______ than zero, then x and y are normal
goods.
a. Income; less
b. Crossprice; greater
c. Crossprice; less
d. Income; greater
e. Price; greater
4. Suppose Tony, a rational painter, has a reservation price of $1500 for his painting “Banana Head.”
Suppose further that a potential client liked the painting and made him an offer, but Tony refused to sell
it. We know with certainty that the client’s offer was ________ $1500.
a. Greater than or equal to
b. Equal to
c. Greater than
d. Less than
e. Less than or equal to
5. Suppose you observe a market in which, at a given point in time, the quantity consumers are willing and
able to purchase is ___________ the quantity producers are willing and able to sell. Thus we say that
there is a _______ of the good and over time, everything else held constant, the price in the market will
decrease.
a. Greater than; shortage
b. Less than; shortage
c. Greater than; surplus
d. Less than; surplus
6. “Labor mobility in the US is down, as fewer workers quit to seek different jobs and employers both hire
and fire fewer people than they used to” is an example of a _______ statement about a __________
issue.
a. Normative; microeconomic
b. Positive; microeconomic
c. Normative; macroeconomic
d. Positive; macroeconomic
7. Suppose a price ceiling is imposed on a market that was in equilibrium when the ceiling was imposed. If
the price of the good ______ after imposition of the ceiling, then it can be concluded that the ceiling is
______, everything else held constant.
