1. Which of the following would best fit the description of a macroeconomic variable?
A. Microsoft's 1997 total sales.
B. The price of a new Lincoln automobile.
C. The total number of burgers produced and sold by McDonald's in 1996.
D. The Consumer Price Index level

2. Which of the following would represent a stock variable (as opposed to a flow)?
A. Your current income.
B. Your current bank balance.
C. Microsoft sales.
D. The current inflation rate.

3. The law of supply states that:
A. supply and demand are inversely related
B. price and quantity supplied are directly related.
C. price and supply are inversely related.
D. price and quantity supplied are inversely related.

4. An equilibrium price:
A. is one at which supply equals demand.
B. is one which does not contribute to inflation.
C. is one which gives the seller a fair rate of profit.
D. is one at which quantity demanded equals quantity supplied.

5. To say that a price is below equilibrium means that:
A. supply exceeds demand.
B. there will be a surplus of the product.
C. the quantity demanded exceeds the quantity supplied.
D. demand exceeds supply.

6. A "decrease in quantity demanded" suggests:
A. a rightward shift in the demand curve.
B. a movement up along the demand curve.
C. a movement down along the demand curve.
D. a leftward shift in the demand curve.

7. Which of the following will not cause the demand for product X to change:
A. A change in consumer tastes.
B. a change in the price of X.
C. An increase in consumer incomes.
D. A change in the price of close-substitute product J.

8. Commodities G and H are substitute goods for consumers. A decrease in the price of H would:
A. cause an increase in the demand for G.
B. cause a decrease in the demand for G.
C. cause a decrease in the supply for H.
D. shift neither curve.

9. The price of product M rises. Consequently, the demand curve for good N shifts to the right. From this we could deduce that:
A. M and N are complementary goods for consumers.
B. M and N are substitute goods for consumers.
C. M and N are inferior goods.
D. M and N are normal goods.
E. M and N are substitute goods for sellers.

10. In which of the following instances will the effect upon equilibrium price be indeterminant, that is, dependent upon the magnitude of the shifts in supply and demand?
A. Demand increases and supply increases.
B. Demand increases and supply is constant.
C. Supply increases and demand decreases.
D. Demand increases and supply decreases.