Gianmarco Ottaviano

London School of Economics

EC102 - Economics B MT
Microeconomics

Moodle Test 1 (Lectures 1 & 2)

Question 1:
Saudi Arabia can pump all the oil it needs. Therefore, consumption of oil
is free in Saudi Arabia. This statement is:
a) True
b) False
Question 2:
Suppose the crisis has reduced the extra money high-skill jobs pay
relative to low-skill ones. Accordingly:
a) More people attend school
b) People quit education earlier
c) People quit education later
Question 3:
If bread and butter must be consumed together, an increase in the price
of butter:
a) Increases the price of bread
b) Increases the number of loaves consumed
c) Has no impact on the price of bread and the number of loaves
consumed
d) Decreases the price of bread and the number of loaves consumed

Question 4:
Sue can choose between 10 memory sticks and 5 software manuals, or 9
memory sticks and 20 software manuals. If her tastes are complete,
transitive and non-satiated:
a) We can predict she will choose the first option
b) We can predict she will choose the second option
c) We can predict she will be indifferent between the two options
d) We cannot predict her choice

Question 5:
Louise is purchasing 150 Russian novels and 30 comic books. She would
be willing to give up 3 Russian novels for 2 more comic books. Her
marginal rate of substitution of Russian novels for comic books is:
a) 1
b) 0.5
c) 1.5
d) 5
Question 6:
The marginal rate of substitution of 20-cent coins for 50-cent coins is:
a) 1
b) 0.4
c) 2.5
d) 5
Question 7:
A university had initially allocated 500k to lectureships and
scholarships, each of which costs 50k and 10k respectively. Its trustees
have later reduced the overall budget to 300k. Hence, the opportunity
cost of a scholarship has:
a) Fallen
b) Increased
c) Remained unchanged