PRINCIPLES OF MICROECONOMICS EVALUATION EXAM
2026 QUESTIONS AND SOLUTIONS RATED A+
✔✔Table 5-3
The following table shows the demand schedule for a particular good.
Price Quantity
$15 0
$12 5
$9 10
$6 15
$3 20
$0 25
4
____ 20. Refer to Table 5-3. Using the midpoint method, when price rises from $6 to $9,
the price elasticity of
demand is
a. 0.43
b. 0.67
c. 1.00
d. 1.5 - ✔✔d. 1.5
✔✔Table 5-4
Price Total
Revenue
$10 $100
$12 $108
$14 $112
$16 $112
____ 22. Refer to Table 5-4. As price rises from $10 to $12, the price elasticity of
demand using the midpoint
method is approximately
a. 0.08.
b. 0.18.
c. 0.42.
d. 0.58.
____ - ✔✔c. 0.42.
✔✔The price elasticity of demand changes as we move along a
a. horizontal demand curve.
b. vertical demand curve.
c. linear, downward-sloping demand curve.
d. All of the above are correct. - ✔✔d. All of the above are correct.
✔✔Table 5-6
Income
, Quantity of Good X
Purchased
Quantity of Good Y
Purchased
$30,000 2 20
$40,000 6 10
____ 40. Refer to Table 5-6. Using the midpoint method, the income elasticity of
demand for good Y is
a. 2.33, and good Y is a normal good.
b. -2.33, and good Y is an inferior good.
c. -0.43, and good Y is a normal good.
d. -0.43, and good Y is an inferior good. - ✔✔b. -2.33, and good Y is an inferior good.
✔✔The price elasticity of demand is defined as the percentage change in price divided
by the percentage change
in quantity demanded. true or faulse - ✔✔faulse
✔✔Demand is inelastic if the price elasticity of demand is greater than 1 - ✔✔faulse
✔✔The flatter the demand curve that passes through a given point, the more inelastic
the demand. - ✔✔faulse
✔✔An individual deciding how to allocate her limited time is dealing with both scarcity
and trade-offs. t/f - ✔✔true
✔✔Price elasticity of demand along a linear, downward-sloping demand curve
decreases as price falls. t/f - ✔✔true
✔✔Economists often find it worthwhile to make assumptions that do not necessarily
describe the real world. t/f - ✔✔true
✔✔When a production possibilities frontier is bowed outward, the opportunity cost of
producing an additional
unit of a good
a. increases as more of the good is produced.
b. decreases as more of the good is produced.
c. does not change as more of the good is produced.
d. may increase, decrease, or not change as more of the good is produced. -
✔✔increases as more of the good is produced.
✔✔Table 2-2
The following table contains some production possibilities for an economy for a given
year:
Cakes Rolls (in dozens)
2026 QUESTIONS AND SOLUTIONS RATED A+
✔✔Table 5-3
The following table shows the demand schedule for a particular good.
Price Quantity
$15 0
$12 5
$9 10
$6 15
$3 20
$0 25
4
____ 20. Refer to Table 5-3. Using the midpoint method, when price rises from $6 to $9,
the price elasticity of
demand is
a. 0.43
b. 0.67
c. 1.00
d. 1.5 - ✔✔d. 1.5
✔✔Table 5-4
Price Total
Revenue
$10 $100
$12 $108
$14 $112
$16 $112
____ 22. Refer to Table 5-4. As price rises from $10 to $12, the price elasticity of
demand using the midpoint
method is approximately
a. 0.08.
b. 0.18.
c. 0.42.
d. 0.58.
____ - ✔✔c. 0.42.
✔✔The price elasticity of demand changes as we move along a
a. horizontal demand curve.
b. vertical demand curve.
c. linear, downward-sloping demand curve.
d. All of the above are correct. - ✔✔d. All of the above are correct.
✔✔Table 5-6
Income
, Quantity of Good X
Purchased
Quantity of Good Y
Purchased
$30,000 2 20
$40,000 6 10
____ 40. Refer to Table 5-6. Using the midpoint method, the income elasticity of
demand for good Y is
a. 2.33, and good Y is a normal good.
b. -2.33, and good Y is an inferior good.
c. -0.43, and good Y is a normal good.
d. -0.43, and good Y is an inferior good. - ✔✔b. -2.33, and good Y is an inferior good.
✔✔The price elasticity of demand is defined as the percentage change in price divided
by the percentage change
in quantity demanded. true or faulse - ✔✔faulse
✔✔Demand is inelastic if the price elasticity of demand is greater than 1 - ✔✔faulse
✔✔The flatter the demand curve that passes through a given point, the more inelastic
the demand. - ✔✔faulse
✔✔An individual deciding how to allocate her limited time is dealing with both scarcity
and trade-offs. t/f - ✔✔true
✔✔Price elasticity of demand along a linear, downward-sloping demand curve
decreases as price falls. t/f - ✔✔true
✔✔Economists often find it worthwhile to make assumptions that do not necessarily
describe the real world. t/f - ✔✔true
✔✔When a production possibilities frontier is bowed outward, the opportunity cost of
producing an additional
unit of a good
a. increases as more of the good is produced.
b. decreases as more of the good is produced.
c. does not change as more of the good is produced.
d. may increase, decrease, or not change as more of the good is produced. -
✔✔increases as more of the good is produced.
✔✔Table 2-2
The following table contains some production possibilities for an economy for a given
year:
Cakes Rolls (in dozens)
