This study reports the development of a computer assisted testing (CAT) system and the use of this system over the past five years to develop a normative testing tool in an introductory microeconomics theory course. The CAT system is more than a testing tool and can be used to aid in instructional improvement by pinpointing difficulties in technical material areas, levels of learning abilities, general lack of understanding and patterns of mathematical, graphic and written problems. It would appear that the techniques used to develop the normative tests in this report could also be used to develop individual standarized examinations tailored to the learning objectives in other courses.