MULTIPLE CHOICE VERSION SAMPLE MIDTERM EXAM FOR EC 120 Introduction
to Microeconomics (POSSIBLE ACTUAL QUESTIONS AND CORRECT ANSWER KEY
SELECTED) 2025 NEW Wilfrid Laurier University
Exam
Name
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Consider labour hired for $1000 per week. If the last week of labour hired produces 0.25 units of output which
sells for $5000 per unit, labour should be hired in this situation since the wage is MRP.
A) more; less than
B) more; greater than
C) no; equal to
D) less; less than
E) less; greater than
Consider the following production and cost schedule for a firm. The first column shows the number of units of a variable factor of
production employed by the firm.
Total Number of Total Number of Price per Unit
Units of the Factor Units of Output of Output
10 20 $10
11 44 $10
12 64 $10
13 78 $10
14 84 $10
15 86 $10
TABLE 13-1
2) Refer to Table 13-1. The marginal revenue product of the 14th unit of the factor is
A) $840. B) $60. C) $140. D) -$60. E) $700.
3) Consider a firm's demand curve for labour. If a technological change makes it harder to substitute capital for
labour, the demand curve for labour
A) is not affected.
B) shifts parallel to the right.
C) becomes more elastic.
D) becomes less elastic.
E) shifts parallel to the left.
4) Consider a manufacturing plant as an example of physical capital. Factor mobility with regard to this physical
capital refers to
A) the ease with which this plant can be relocated to another location.
B) only the long-run concept of mobility because it is physical capital.
C) the ease with which this plant can be converted to a different use.
D) the elasticity of supply of the labour employed in the plant.
1
,E) the ease with which the labour employed at the plant can be retrained to produce a different product.
2
, 5) If at a particular wage rate in a competitive labour market the quantity demanded of labour is less than quantity
supplied of labour, then
A) there will be a shortage of labour, thereby increasing the equilibrium wage rate.
B) some workers will begin to accept lower wages and induce employers to hire more workers.
C) the supply curve for labour will shift to the right.
D) the demand curve for labour will shift to the right.
E) a black market for labour will form, with firms offering workers very high wages.
The demand and supply curves shown below apply to a competitive market for a factor used in the production of widgets.
FIGURE 13-2
6) Refer to Figure 13-2. This factor market is in equilibrium at point B. In equilibrium, the 20th unit of the factor is
being paid transfer earnings of and economic rent of .
A) $16; $2 B) $120; $40 C) $120; -$2 D) $320; $80 E) $6; $2
7) The present value of $100 to be received one year from now, with an annual interest rate of 8%, is
A) $102.13. B) $108.00. C) $92.59. D) $94.34. E) $85.73.
8) Consider the economy's downward-sloping demand for investment curve. An increase in the interest rate
causes
A) a shift of the curve to the right.
B) a movement downward along the curve.
C) a movement upward along the curve.
D) no change.
E) a shift of the curve to the left.
3
to Microeconomics (POSSIBLE ACTUAL QUESTIONS AND CORRECT ANSWER KEY
SELECTED) 2025 NEW Wilfrid Laurier University
Exam
Name
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) Consider labour hired for $1000 per week. If the last week of labour hired produces 0.25 units of output which
sells for $5000 per unit, labour should be hired in this situation since the wage is MRP.
A) more; less than
B) more; greater than
C) no; equal to
D) less; less than
E) less; greater than
Consider the following production and cost schedule for a firm. The first column shows the number of units of a variable factor of
production employed by the firm.
Total Number of Total Number of Price per Unit
Units of the Factor Units of Output of Output
10 20 $10
11 44 $10
12 64 $10
13 78 $10
14 84 $10
15 86 $10
TABLE 13-1
2) Refer to Table 13-1. The marginal revenue product of the 14th unit of the factor is
A) $840. B) $60. C) $140. D) -$60. E) $700.
3) Consider a firm's demand curve for labour. If a technological change makes it harder to substitute capital for
labour, the demand curve for labour
A) is not affected.
B) shifts parallel to the right.
C) becomes more elastic.
D) becomes less elastic.
E) shifts parallel to the left.
4) Consider a manufacturing plant as an example of physical capital. Factor mobility with regard to this physical
capital refers to
A) the ease with which this plant can be relocated to another location.
B) only the long-run concept of mobility because it is physical capital.
C) the ease with which this plant can be converted to a different use.
D) the elasticity of supply of the labour employed in the plant.
1
,E) the ease with which the labour employed at the plant can be retrained to produce a different product.
2
, 5) If at a particular wage rate in a competitive labour market the quantity demanded of labour is less than quantity
supplied of labour, then
A) there will be a shortage of labour, thereby increasing the equilibrium wage rate.
B) some workers will begin to accept lower wages and induce employers to hire more workers.
C) the supply curve for labour will shift to the right.
D) the demand curve for labour will shift to the right.
E) a black market for labour will form, with firms offering workers very high wages.
The demand and supply curves shown below apply to a competitive market for a factor used in the production of widgets.
FIGURE 13-2
6) Refer to Figure 13-2. This factor market is in equilibrium at point B. In equilibrium, the 20th unit of the factor is
being paid transfer earnings of and economic rent of .
A) $16; $2 B) $120; $40 C) $120; -$2 D) $320; $80 E) $6; $2
7) The present value of $100 to be received one year from now, with an annual interest rate of 8%, is
A) $102.13. B) $108.00. C) $92.59. D) $94.34. E) $85.73.
8) Consider the economy's downward-sloping demand for investment curve. An increase in the interest rate
causes
A) a shift of the curve to the right.
B) a movement downward along the curve.
C) a movement upward along the curve.
D) no change.
E) a shift of the curve to the left.
3
