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CLEP Principles of Microeconomics: Practice & Study Guide Final Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Which of the following is true for two products that are compliments?

Question 2 2. When the price of gasoline rises by 10% demand falls by 2%. What is true of the demand for gasoline?

Question 3 3. Using the same amount of resources, Island X can produce 75 lb of apples or 15 lb of strawberries and Island Y can produce 30 lb of apples or 18 lb of strawberries. Which statement is consistent with this information?

Question 4 4. An economy produces both military and consumer goods. When the economy is producing inside the production possibilities curve, which of the following is a consequence?

Question 5 5. At 0 units of production total cost is $60. At 3 units of production total coat is $105. What are the average fixed and average variable costs at 3 units of production?

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Question 6 6. Which of these events would not change average variable cost for product X but would raise average total costs?

Question 7 7.

The total cost for producing a product are as follows:

0 units $50

1 unit $70

2 units $85

3 units $95

What is the marginal cost of producing the third unit?

Question 8 8. How is the individual demand curve for a product shaped when marginal utility decreases as more of the product is consumed?

Question 9 9. Government regulators would like a natural monopoly to produce a socially optimal level of output. Where should regulators set the price?

Question 10 10. Which of the following is a characteristic of monopolistic competition?

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Question 11 11. When does monopsony occur in a labor market?

Question 12 12. An increase in the price of the good that labor produces would result in which of these?

Question 13 13. What does the market demand curve show?

Question 14 14. Which would have the biggest effect on a market demand curve for a whole city?

Question 15 15. What is a sunk cost?

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Question 16 16. According to income elasticity of demand, which of the following is an inferior good?

Question 17 17. According to income elasticity of demand, how does rising income affect spending habits?

Question 18 18. Why might a company have a perfectly inelastic supply?

Question 19 19. Which one is NOT a characteristic of monopolistic competition?

Question 20 20. Which company did the Justice Department require be broken up in the early 1980s because they had become too powerful of a monopoly?

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Question 21 21. What types of discounts are offered as a second degree of price discrimination?

Question 22 22. What is a long-run cost?

Question 23 23. Which of these does the cost curve demonstrate?

Question 24 24. Sarah owns a factory that produces tin cans. A company puts in an order for twice as many cans as usual, but only for one month. Why might Sarah turn down this order?

Question 25 25. Which of these factors affecting poverty can be proactively started at an early age?

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Question 26 26. Define protectionism.

Question 27 27. Which of the following is an example of a regressive tax?

Question 28 28. Schools, colleges and universities can all provide external benefits to the community. Which of the following is an example of an external benefit that comes from education?

Question 29 29. What type of market failure occurs when the market does not make any products at all?

Question 30 30. The owner of Clayton Manufacturing is contemplating the hiring of a new employee. If a new employee can produce 70 additional units per week and each unit sells for $6 then what is the marginal revenue product of that new employee?

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Question 31 31. Why do diamonds cost so much?

Question 32 32. Why is the phrase 'all other things constant' important?

Question 33 33. Bob is looking for a job, but he lacks the credentials to get a specialized job with a high starting salary. It is likely he will have to start working in an entry level position. Which of the following would benefit Bob in this scenario?

Question 34 34. How should a government behave in a capitalist system?

Question 35 35. Which one of the following statements is correct?

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Question 36 36. What determines the price of a good or service in a capitalistic economy?

Question 37 37. Which one of the following is the best explanation of economic incentives?

Question 38 38. What does the right to transfer allow a property owner to do?

Question 39 39.

Considering the following information, what would be the best decision using marginal analysis?

Producing an additional unit of smartphones has a marginal cost of $1,000 and a marginal benefit of $1,500? The change in net benefits is $500.

Question 40 40. Which one of the following choices describes rejectability?

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Question 41 41. What is a public good?

Question 42 42. The method by which things are taxed is known as what?

Question 43 43. How does the idea of utility influence producers in the products they create for consumers?

Question 44 44. Elasticity of demand is said to be elastic when elasticity is:

Question 45 45. Which is true about the products in a monopolistic competition?

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Question 46 46. What is average cost?

Question 47 47. Which of the following is NOT an effect of a trust?

Question 48 48. Jones Steel just built a fully automated factory that has only 10 labor and management employees who oversee production. Which factors gain the most income when the factory starts up?

Question 49 49. What is a cartel?

Question 50 50. Which one of the following economic systems is characterized by state ownership of land and capital, but individuals remaining in control of their labor?

CLEP Principles of Microeconomics: Practice & Study Guide Final Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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