ECON 1010 - Introduction to
Microeconomics EXAM STUDY GUIDE
2026/2027 COMPLETE QUESTIONS WITH
VERIFIED CORRECT ANSWERS ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. Economists study... - ANSWER ✔ The choices people make in a world
where resources are scarce.
2. Economic theory assumes people want... - ANSWER ✔ To advance the
projects in which they are interested.
3. To economize means to... - ANSWER ✔ Allocate available resources in a
way that yields the most value to the economizer.
4. The economic way of thinking... - ANSWER ✔ Explains how social order
and cooperation emerge from the actions of individuals.
5. Only individuals choose, which means... - ANSWER ✔ Only individuals
can assess the expected costs and benefits of an action.
6. Your textbook authors use the urban traffic example to show... - ANSWER
✔ How social cooperation emerges when people act under generally
accepted rules.
,7. According to your text, when people talk about "the economy" they
probably have in mind... - ANSWER ✔ Commercial society in general.
8. Zero profits would likely exist in a market environment of... - ANSWER ✔
Perfect competition.
9. All possible gains from specialization and exchange would be fully
exploited under a market structure of... - ANSWER ✔ Perfect competition.
10.A highly profitable cartel arrangement among sellers contains the seeds of
its own disintegration because... - ANSWER ✔ A price maintained above
each cartel member's marginal cost is an incentive to offer secret price
reductions to attract additional business.
11.When laws and regulations prohibit firms from selling at "prices less than
cost" - ANSWER ✔ They must define "cost" arbitrarily since no firm has an
incentive to sell below cost.
12.Competition among sellers occurs... - ANSWER ✔ When sellers try to
attract customers from one another.
13.Sellers turn so frequently to government to protect themselves from
competition because government... - ANSWER ✔ Can use coercion against
competitors.
14.A government policy of promoting competition must... - ANSWER ✔
Maintain a process rather than some state of affairs.
,15.Government licensing of occupations or trades - ANSWER ✔ is more often
supported than opposed by the persons and firms to be regulated.
16.Cartels rarely succeed for long because they find it difficult to... - ANSWER
✔ keep members from offering discounts and new firms from entering.
17.In which of the following instances will total revenue decline?
A. price rises and supply is elastic
B. price falls and demand is elastic
C. price rises and demand is inelastic
D. price rises and demand is elastic - ANSWER ✔ D
18.Suppose the price elasticity coefficients of demand are 1.43, 0.67, 1.11, and
0.29 for products
W, X, Y, and Z respectively. A 1 percent decrease in price will increase total
revenue in the
case(s) of:
A. W and Y.
B. Y and Z.
C. X and Z.
D. Z and W - ANSWER ✔ A
19.Which of the following is correct?
A. If demand is elastic, an increase in price will increase total revenue.
B. If demand is elastic, a decrease in price will decrease total revenue.
C. If demand is elastic, a decrease in price will increase total revenue.
D. If demand is inelastic, an increase in price will decrease total revenue
- ANSWER ✔ C
, 20.If a firm finds that it can sell $13,000 of a product when its price is $5 per
unit and $11,000
of it when its price is $6, then:
A. in the $6-$5 price range, the demand for the product is elastic.
B. the demand for the product must have increased.
C. elasticity of demand is 0.74.
D. in the $6-$5 price range, the demand for the product is inelastic. -
ANSWER ✔ D
21.Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a
result, the total
revenue received by peanut farmers changes from $16 to $14 billion. Thus:
A. the demand for peanuts is elastic.
B. the demand for peanuts is inelastic.
C. the demand curve for peanuts has shifted to the right.
D. no inference can be made as to the elasticity of demand for peanuts. -
ANSWER ✔ B
22.Moving upward on a downward-sloping straight-line demand curve, we find
that price
elasticity:
A. is constant.
B. increases continuously.
C. decreases continuously.
D. may either increase or decreas - ANSWER ✔ B
23.You are the newly appointed sales manager of the Rock Record Company
and have been
charged with the task of increasing revenues. Your economics consultants
have informed you that
at present price and output levels, price elasticity of demand for your product
is less than one.
You should:
A. decrease prices.
Microeconomics EXAM STUDY GUIDE
2026/2027 COMPLETE QUESTIONS WITH
VERIFIED CORRECT ANSWERS ||
100% GUARANTEED PASS
<NEWEST VERSION>
1. Economists study... - ANSWER ✔ The choices people make in a world
where resources are scarce.
2. Economic theory assumes people want... - ANSWER ✔ To advance the
projects in which they are interested.
3. To economize means to... - ANSWER ✔ Allocate available resources in a
way that yields the most value to the economizer.
4. The economic way of thinking... - ANSWER ✔ Explains how social order
and cooperation emerge from the actions of individuals.
5. Only individuals choose, which means... - ANSWER ✔ Only individuals
can assess the expected costs and benefits of an action.
6. Your textbook authors use the urban traffic example to show... - ANSWER
✔ How social cooperation emerges when people act under generally
accepted rules.
,7. According to your text, when people talk about "the economy" they
probably have in mind... - ANSWER ✔ Commercial society in general.
8. Zero profits would likely exist in a market environment of... - ANSWER ✔
Perfect competition.
9. All possible gains from specialization and exchange would be fully
exploited under a market structure of... - ANSWER ✔ Perfect competition.
10.A highly profitable cartel arrangement among sellers contains the seeds of
its own disintegration because... - ANSWER ✔ A price maintained above
each cartel member's marginal cost is an incentive to offer secret price
reductions to attract additional business.
11.When laws and regulations prohibit firms from selling at "prices less than
cost" - ANSWER ✔ They must define "cost" arbitrarily since no firm has an
incentive to sell below cost.
12.Competition among sellers occurs... - ANSWER ✔ When sellers try to
attract customers from one another.
13.Sellers turn so frequently to government to protect themselves from
competition because government... - ANSWER ✔ Can use coercion against
competitors.
14.A government policy of promoting competition must... - ANSWER ✔
Maintain a process rather than some state of affairs.
,15.Government licensing of occupations or trades - ANSWER ✔ is more often
supported than opposed by the persons and firms to be regulated.
16.Cartels rarely succeed for long because they find it difficult to... - ANSWER
✔ keep members from offering discounts and new firms from entering.
17.In which of the following instances will total revenue decline?
A. price rises and supply is elastic
B. price falls and demand is elastic
C. price rises and demand is inelastic
D. price rises and demand is elastic - ANSWER ✔ D
18.Suppose the price elasticity coefficients of demand are 1.43, 0.67, 1.11, and
0.29 for products
W, X, Y, and Z respectively. A 1 percent decrease in price will increase total
revenue in the
case(s) of:
A. W and Y.
B. Y and Z.
C. X and Z.
D. Z and W - ANSWER ✔ A
19.Which of the following is correct?
A. If demand is elastic, an increase in price will increase total revenue.
B. If demand is elastic, a decrease in price will decrease total revenue.
C. If demand is elastic, a decrease in price will increase total revenue.
D. If demand is inelastic, an increase in price will decrease total revenue
- ANSWER ✔ C
, 20.If a firm finds that it can sell $13,000 of a product when its price is $5 per
unit and $11,000
of it when its price is $6, then:
A. in the $6-$5 price range, the demand for the product is elastic.
B. the demand for the product must have increased.
C. elasticity of demand is 0.74.
D. in the $6-$5 price range, the demand for the product is inelastic. -
ANSWER ✔ D
21.Suppose that the price of peanuts falls from $3 to $2 per bushel and that, as a
result, the total
revenue received by peanut farmers changes from $16 to $14 billion. Thus:
A. the demand for peanuts is elastic.
B. the demand for peanuts is inelastic.
C. the demand curve for peanuts has shifted to the right.
D. no inference can be made as to the elasticity of demand for peanuts. -
ANSWER ✔ B
22.Moving upward on a downward-sloping straight-line demand curve, we find
that price
elasticity:
A. is constant.
B. increases continuously.
C. decreases continuously.
D. may either increase or decreas - ANSWER ✔ B
23.You are the newly appointed sales manager of the Rock Record Company
and have been
charged with the task of increasing revenues. Your economics consultants
have informed you that
at present price and output levels, price elasticity of demand for your product
is less than one.
You should:
A. decrease prices.
