2. The basic purpose of economic models is to: a/construct situations where controlled experiments can be carried out. b/construct simplifying assumptions about the real world. c/explain reality in all its complexity. d/provide explanations for, and predictions of the relationship between variables.

9. Which of the following is not a characteristic of a public good? a/It is free. b/It is not diminished in amount as additional people consume the product. c/It is scarce. d/It yields widespread benefits. e/Its benefits cannot be withheld from anyone.

19. A minimum wage that is set below the equilibrium wage will: a/cause the overall wage to decrease. b/have no effect on employment. c/cause the overall wage to increase. d/cause increased unemployment. e/create more jobs.

26. An increase in both supply and demand causes which of the following? a/Equilibrium price change is indeterminate. b/Equilibrium quantity change is indeterminate. c/Equilibrium price rises. d/Equilibrium quantity decreases. e/Equilibrium price falls.

29. A product would be more demand price elastic: a/the lower the price of the good. b/the shorter the time the consumer has to adjust to price changes. c/if the supply is more price elastic. d/the fewer the number of good substitutes. e/the less the essential nature of the good.

45. Assuming that wheat and corn can both be grown on the same type of land, a decrease in the price of corn, other things being equal, will cause a(n): a/downward movement along the supply curve for wheat. b/leftward shift in the supply curve for wheat. c/upward movement along the supply curve for wheat. d/rightward shift in the supply curve for wheat.