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# Microeconomics I Exam ## **Instructions** Select the correct answer for each question and circle the corresponding letter. Make sure the letter is visible. ## **Questions** 1. **Total: 3.5 points** * **0.5 points each** **(a)** In a linear demand curve, the elasticity is maximum at th...

# Microeconomics I Exam ## **Instructions** Select the correct answer for each question and circle the corresponding letter. Make sure the letter is visible. ## **Questions** 1. **Total: 3.5 points** * **0.5 points each** **(a)** In a linear demand curve, the elasticity is maximum at the central point. **(b)** In a linear demand curve, the elasticity decreases as the price increases. **(c)** In a linear demand curve, the elasticity increases as the price increases. **(d)** In a linear demand curve, the elasticity is the same at all points. **(a)** Py **(b)** R/Py **(c)** Py/R **(d)** RPy **(e)** No information is available. **(a)** The substitution effect will lead to an increase in the quantity demanded of good Y and the income effect will lead to a decrease. **(b)** The substitution effect will lead to a reduction in the quantity demanded of good Y and the income effect will lead to an increase. **(c)** Both the substitution effect and the income effect will lead to a reduction in the demand for good Y. **(d)** Both the substitution effect and the income effect will lead to an increase in the demand for good Y. **(a)** Each worker contributes more to production than the previous worker. **(b)** Each worker contributes less to production than the previous worker. **(c)** To increase production by one unit, fewer workers are needed each time. **(d)** To increase production by one unit, more workers are needed each time. **(a)** Both the consumer surplus and the producer surplus increase. **(b)** Both the consumer surplus and the producer surplus decrease. **(c)** Consumer surplus decreases and producer surplus increases. **(d)** Producer surplus decreases and consumer surplus increases. **(a)** Constant elasticity. **(b)** Elasticity decreases when the price increases. **(c)** Elasticity decreases when the quantity increases. **(d)** Spending on this good remains constant despite price changes. **(a)** When marginal product is increasing, it is lower than average product. **(b)** When average product is decreasing, it is lower than marginal product. **(c)** The level of production that maximizes marginal product is lower than the level that maximizes average product. **(d)** Marginal product intersects average product at the maximum of marginal product. ## **True or False** 1. **Total: 1 point each** If many producers accept cartel agreements and the market demand is sufficiently elastic, the cartel can raise prices well above competitive levels. **Explanation:** Among all combinations of goods that form an indifference curve, the consumer prefers the one where the indifference curve is tangent to the budget constraint. **Explanation:** Perfect price discrimination in a non-competitive market leads to a level of output closer to that of perfect competition. **Explanation:** ## **Important Information:** * **Exam duration:** 120 minutes. * **Prohibited items:** Phones, headphones, calculators, and any other electronic devices.