Economics 201 is the Principles of Microeconomics class. Depending on the Professor, the exams format may or may not be multiple choice.

Disclaimer: While every reasonable effort is made to ensure that the information provided is accurate, no guarantees for the currency or accuracy of information are made. It takes several proof readings and rewrites to bring the quiz to an exceptional level. If you find an error, please contact me as soon as possible. Please indicate the question ID-Number or description because server may randomize the questions and answers.

Go to: Final Exam

Economics (ECON 201-UCAL) Midterm Exam

Some questions have hints and explanations. Click Start to begin.

Start

Congratulations - you have completed Economics (ECON 201-UCAL) Midterm Exam.

You scored %%SCORE%% out of %%TOTAL%%. With incorrect multiple attempts your score is %%PERCENTAGE%%

Your performance has been rated as %%RATING%%

Your answers are highlighted below.

Question 1

An effective ceiling price will result in... (ID-MI1-40)

A	...will help the customers.
B	...shortage of good decrease in demand.
C	...shortage of goods and increase in demand.
D	...abundance of good and decrease in demand.

Question 2

In Economics, the term capital is used to describe... (ID-MI1-03)

A	the main City in a country which produces the most goods.
B	the amount of created resources.
C	the amount of money grained from profits.
D	the amount of money invested.

Question 3

The fall in total surplus as a result of market distortion is known as... (ID-MI1-31)

A	...deadweight loss.
B	...elasticity loss.
C	...a tax revenue loss.
D	...efficiency loss.

Question 4

What will eventually happen to an economy when resources are not allocated properly? (ID-MI1-07)

A	It will experience scarcity.
B	It will result in a market failure.
C	It will result in slow rate of inflation growth.
D	It will experience a rapid growth.
E	It will result in larger income gaps between the rich and poor.

Question 5

There are several points posted on the following Production Possibility Frontier (PPF) graph. The most inefficient points are indicated by which letter(s)? (ID-MI1-15)

A	A
B	A and B
C	B
D	C and D
E	D

Question 6

What is market failure? (ID-MI1-50)

A	It is a situation in which market on its own fails to allocate resources efficiently.
B	It is a situation in which a product or a service failed to generate enough demand to be successful.
C	It is a situation in which wrong products and services in the wrong market results in low demand and eventual failure.
D	It is a situation in which a firm exits a market due to financial failure.

Question 7

Refer to the following diagram. The tax imposed is indicated by the neon-green vertical line. What is the total tax revenue? (ID-MI1-20)

A	$35.5
B	$750
C	$20
D	$650
E	$57.5

Question 7 Explanation: 

(57.5 - 20) X 20 = 750

Question 8

Refer to the following diagram. The tax imposed is indicated by the neon-green vertical line. What is the consumer surplus without the tax? (ID-MI1-18)

A	$700
B	$1500
C	$350
D	$3000

Question 8 Explanation: 

40 x (75-40) x 0.5 = 700

Question 9

Which of the following scenario will increase both the equilibrium price and quantity of an inferior good? (ID-MI1-45)

A	Increase in the number of substitution products.
B	Decrease in the number of substitution products.
C	Decrease in consumer income.
D	Increase in consumer income.
E	Decrease in consumer demand.

Question 10

Which of the following best describes Microeconomics? (ID-MI1-01)

A	The study of overall production and consumption.
B	The study of household centered economic systems.
C	The study of behavior of individual agents and markets.
D	The study of small industries and companies.

Question 11

Refer to the following diagram. The tax imposed is indicated by the neon-green vertical line. What is the total revenue without tax incidence? (ID-MI1-25)

A	$1600
B	$710
C	$575
D	$800
E	$1150

Question 11 Explanation: 

40 X 40 = 1600

Question 12

What major limitation is not considered in Circular Flow Diagram of physical and monetary flow? (ID-MI1-05)

A	capital costs
B	human resources
C	non-renewable resources
D	market fluctuations

Question 13

Higher price for hotdogs will most likely... (ID-MI1-28)

A	....increase the equilibrium quantity.
B	...decrease the demand for hotdog buns.
C	...increase the demand for bananas.
D	...increase the demand for ketchup.

Question 13 Explanation: 

According to the principles of "related items".

Question 14

A government welfare system will increase the equity. (ID-MI1-30)

A	False
B	True

Question 15

Positive statements as opposed to normative statements attempt to describe the world as it is. (ID-MI1-33)

A	False
B	True

Question 16

Based on the following table, Canada has the absolute advantage in... (ID-MI1-38)

...	Hours needed for 1 unit		Amount procuded in 24 hours
	Cheese	Jam	Cheese	Jam
Canada	6	2	4	12
USA	3	4	8	6

A	....(cannot be answered due to lack of information).
B	...Jam and USA has an absolute advantage in Cheese.
C	...neither good and USA has an absolute advantage in Jam.
D	...neither good and USA has an absolute advantage in Cheese.
E	...Cheese and USA has an absolute advantage in Jam.

Question 17

If the number of hours you studied for Economics 201 increases your confusion of concepts, you can say that studying have a... (ID-MI1-41)

A	...negative correlation.
B	...positive correlation.
C	...neutral correlation.
D	...no correlation.
E	...random correlation.

Question 18

Based on the following table, what is the opportunity cost of moving from D to E? (ID-MI1-13)

Situation	Capital Goods	Consumer Goods
A	0	2000
B	150	1750
C	300	1500
D	550	1050
E	700	500
F	950	0

A	1050 consumer goods
B	550 consumer goods
C	150 capital goods
D	550 capital goods

Question 19

The concept of "invisible hand" best applies to what kind of economies? (ID-MI1-44)

A	Command economies.
B	Market economies.
C	Mixed economies.
D	Traditional economies.
E	Free economies.

Question 20

Which of the following product will have the most inelastic demand? (ID-MI1-27)

A	Oranges and bananas
B	Automobiles
C	University education
D	Penicillin antibiotics

Question 20 Explanation: 

Drugs such as Penicillin based antibiotics often have inelastic demand because they are essential ingredients in treating certain medical conditions.

Question 21

Given that the price elasticity of demand for a good is 4.5, what is the change in quantity demanded if the price is increased by 15%? (ID-MI1-24)

A	6.75% increase
B	0.675% increase
C	67.5% increase
D	4.5% increase

Question 22

In Circular Flow Diagram of physical and monetary flow, what is the input and output of firms? (ID-MI1-04)

A	Input: commodities and consumption Output: revenue and resource services
B	Input: income and resource services Output: commodities and consumption
C	Input: commodities and costs Output: revenue and resource services
D	Input: revenue and resource services Output: commodities and costs
E	Input: commodities and consumption Output: income and resource services

Question 23

What would be the most likely result of rent control? (ID-MI1-46)

A	Lower rent with higher quality housing.
B	Higher rent with higher quality housing.
C	Lower rent with lower quality housing.
D	Higher rent with lower quality housing.

Question 24

Refer to the following diagram. The tax imposed is indicated by the neon-green vertical line. If the demand line is steeper(let's say the intercepts are 75 and 40 instead of 75 and 85), then the demand is said to be more... (ID-MI1-32)

A	...distorted.
B	...artificial.
C	...inelastic.
D	...elastic.

Question 25

Based on the following table, Canada has a comparative advantage in... (ID-MI1-42)

...	Hours needed for 1 unit		Amount procuded in 24 hours
	Cheese	Jam	Cheese	Jam
Canada	6	2	4	12
USA	3	4	8	6

A	...neither and USA has a comparative advantage in Cheese.
B	...neither and USA has a comparative advantage in Jam.
C	...Cheese and USA has a comparative advantage in Jam.
D	...Jam and USA has a comparative advantage in Cheese.

Question 26

The supply of Oranges exceeds the demand while the supply of Apples are hindered due to weather. Which of the following statement is true about this particular market? (ID-MI1-06)

A	The price of Orange will decrease as the Apples market is experiencing a s scarcity.
B	The price of Orange and Apples will decrease.
C	The price of Orange and Apples will increase.
D	The price of Orange will increase as the Apples market is experiencing a scarcity.
E	The inflation rate will increase due to the shortage of Apples.

Question 27

Which of the following four graph (A, B, C, D) represents the market for Winter Coats in the middle of Canadian Summer? (ID-MI1-48)

A	Graph B
B	Graph C
C	Graph A
D	Graph D

Question 28

What should be the unemployment rate of a sustainable and healthy Economy? (ID-MI1-11)

A	15 - 20%
B	0%
C	40 - 45%
D	4 - 6%
E	30 - 35%

Question 28 Explanation: 

Ideally, 0% is the best option. Piratically no Economy (country) can maintain an unemployment rate of 0%.

Question 29

Based on the following table, what is the opportunity cost of moving from C to B? (ID-MI1-17)

Situation	Capital Goods	Consumer Goods
A	0	2000
B	150	1750
C	300	1500
D	550	1050
E	700	500
F	950	0

A	150 Capital Goods
B	300 Consumer Goods
C	1/2 Consumer Goods
D	300 Capital Goods

Question 30

There are several points posted on the following Production Possibility Frontier (PPF) graph. The situation(s) that is/are impossible to attain, indicated by which letter(s)? (ID-MI1-16)

A	A and B
B	B
C	B and C
D	A
E	C and D

Question 31

Price control will most likely result in... (ID-MI1-43)

A	...helping the producers by generating more revenuer.
B	...hurting the consumers that needed the most help.
C	...creating a fair and balanced economies.
D	...creating more competition hence reducing monopolies.

Question 32

If the entire Production Possibility Frontier shifted to higher values, it is most likely caused by... (ID-MI1-26)

A	...decrease in demand for the two products.
B	...decrease in demand for one product over the other.
C	...technological breakthrough in both goods.
D	...technological breakthrough in one of the two goods.
E	...increased in spending.

Question 33

The price elasticity of supply is concerned with... (ID-MI1-39)

A	...change in supply due to change in market competition.
B	...change in supply due to change in market prices.
C	...change in supply due to producer's ability to fulfill the market demand.
D	...change in price due to change in quantity demanded.
E	...change in price due to change in market demand.

Question 34

The absolute advantage is measured primarily by what factor? (ID-MI1-22)

A	The added costs such as taxes and transportation fees.
B	The all inputs needed to produce an item.
C	The capital needed to produce an item.
D	The number of items produced.

Question 34 Explanation: 

Tricky question because you must know the exact definition of absolute advantage (AA); lowest inputs needed to produce one unit of an item.

Question 35

The Alberta beef market to shrunk as during the Mad Cow Disease crisis. This is an example of what Economic property? (ID-MI1-10)

A	Market failure due to Alberta's monopoly on the beef industry.
B	Endogenous variables causing the market demand for beef to drop.
C	An example of the "invisible hand" in action.
D	Exogenous variables causing the market demand for beef to drop.
E	Externality causing the market to shrink during a crisis.

Question 36

There are several points posted on the following Production Possibility Frontier (PPF) graph. The most efficient points are indicated by which letter(s)? (ID-MI1-14)

A	B
B	C
C	A and B
D	A
E	C and D

Question 37

Increase in price of bread from $2.50 to $3.20 will increase the supply from 800 to 1250 units. Using midpoint (arc) method, what is the elasticity of supply? (ID-MI1-23)

A	2.31
B	2.00
C	1.55
D	1.79
E	0.55

Question 37 Explanation: 

midpoint (arc) = [(change in Q)/(change in P)] X [(sum of P)/sum of Q)]

Question 38

Based on the following table, what is the opportunity cost of producing a unit of Jam for USA? (ID-MI1-37)

...	Hours needed for 1 unit		Amount procuded in 24 hours
	Cheese	Jam	Cheese	Jam
Canada	6	2	4	12
USA	3	4	8	6

A	4/3 Cheese
B	4 Cheese
C	3/4 Cheese
D	1/3 Cheese
E	1/3 Cheese

Question 39

The self-interest of the participants in an economy is guided into promoting economic self-interest by (ID-MI1-49)

A	market power.
B	individual property rights.
C	government intervention.
D	private sector regulations.
E	the invisible hand.

Question 40

How do you calculate the consumer surplus on a Supply-Demand graph? (ID-MI1-35)

A	It is the area under the Supply curve and above the market price.
B	It is the area under the Demand curve and above the market price.
C	It is the area above the Demand curve and under the market price.
D	It is the area above the Supply curve and under the market price.

Question 41

What is the best definition for producer surplus? (ID-MI1-29)

A	The value of everything that a producer earns as a result of selling an item.
B	The amount a seller is paid by the buyer for a given item minus the seller's cost.
C	The amount a buyer would gain before the tax being paid.
D	The difference between what the buyer's willingness to pay minus the amount the buyer actually pays.

Question 42

Refer to the following diagram. The tax imposed is indicated by the neon-green vertical line. What is the deadweight loss (DL) due to tax incidence? (ID-MI1-21)

A	$710
B	$35.5
C	$375
D	$53.5

Question 43

Canada was one of the few (if not only) countries to weather the financial crisis of 2007–08. What is the primary reason for Canada's success? (ID-MI1-09)

A	Controls put in placed by the free market "invisible hand".
B	International trade agreements between Canada and other first world nations, such as NAFTA.
C	Proper Government regulations on the free market economy.
D	Mark Joseph Carney, the Governor of the Bank of Canada.

Question 44

In order to obtain a degree at the University of Calgary, you decided to give up your full time job. What is the best statement that describe your situation from Economics point of view? (ID-MI1-08)

A	The time spent on studying and attending classes is the opportunity cost of obtaining an education.
B	The lost time and money from a full time job is the capital cost of obtaining an education.
C	The time spent on studying and attending classes is the capital cost of obtaining an education.
D	The cost of obtaining an education is always beneficial compared to having a low paying full time job. Hint: This may be true in most cases. But this is not applicable in all situations. For example; Bill Gates, Mark Zuckerberg, etc.
E	The lost time and money from a full time job is the opportunity cost of obtaining an education.

Question 45

Refer to the following diagram. The tax imposed is indicated by the neon-green vertical line. What is the producer surplus without the tax? (ID-MI1-19)

A	$700
B	$800
C	$350
D	$1500

Question 45 Explanation: 

40 x (40-0) x 0.5 = 800

Question 46

When the production of goods are inadequate to fulfill the needs of a society, the economy is... (ID-MI1-02)

A	most likely a Capitalist one.
B	experiencing scarcity.
C	expanding.
D	a failure.
E	most likely a Socialist one.

Question 47

Challenging a current market system with a new idea which may be better for the future can be considered as a... (ID-MI1-34)

A	...positive statement.
B	...market projection.
C	...economic projection.
D	...normative statement.
E	...negative statement.

Question 48

Based on the following table, what is the opportunity cost of producing a unit of Jam for Canada? (ID-MI1-36)

...	Hours needed for 1 unit		Amount procuded in 24 hours
	Cheese	Jam	Cheese	Jam
Canada	6	2	4	12
USA	3	4	8	6

A	1/3 Cheese
B	6 Cheese
C	1 Cheese
D	4/3 Cheese
E	3 Cheese

Question 49

If the City of Calgary has a problem with overuse of public swimming pools, the best solution to protect infrastructure is to... (ID-MI1-47)

A	...decrease the management costs.
B	...increase the maintenance budget.
C	...increase the usage fees.
D	...reduce the quality of pools and facilities.

Question 50

What is Production Possibility Frontier or PPF? (ID-MI1-12)

A	It is a graphical representation of the maximum output obtain from a given unlimited resource base.
B	It is a mathematical model used for calculating the per unit opportunity cost for a given item.
C	It is a graphical representation of the relationship between the output of products and the limited resources available to produce the products.
D	It is a mathematical model used for determining the inflation rate and its relationship to the economic growth.
E	It is a mathematical model used for determining the inflation rate and its relationship to the unemployment rate.

Once you are finished, click the button below. Any items you have not completed will be marked incorrect. Get Results

There are 50 questions to complete.

←

List

→

Return

Shaded items are complete.

1	2	3	4	5
6	7	8	9	10
11	12	13	14	15
16	17	18	19	20
21	22	23	24	25
26	27	28	29	30
31	32	33	34	35
36	37	38	39	40
41	42	43	44	45
46	47	48	49	50
End

Return

You have completed

questions

question

Your score is

Correct

Wrong

Partial-Credit

You have not finished your quiz. If you leave this page, your progress will be lost.

Correct Answer

You Selected

Not Attempted

Final Score on Quiz

Attempted Questions Correct

Attempted Questions Wrong

Questions Not Attempted

Total Questions on Quiz

Question Details

Results

Date

Score

Hint

Time allowed

minutes

seconds

Time used

Answer Choice(s) Selected

Question Text

All done

Need more practice!

Keep trying!

Not bad!

Good work!

Perfect!

Credits: Based on the excellent class notes provided by, Dr. Ronald Schlenker during Summer 2014.
FAQ | Report an Error

If you get a question wrong, you can still click on the other answers. You have multiple opportunities to select the correct answer. This will open up hints and explanations (if available), which will provide additional information.

You may download this exam as a PDF file here.