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Microeconomics
Microeconomics
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Answers
1
According to this diagram showing the circular flow of goods & resources where do individuals spend the income they earn
in the capital market
in the factor market
in individuals households
in the product market
2
Supply is the total amount of a good or service that is available to ______.
distribute
purchase
consumers
redistribute
3
Which market(s) has no competition
perfect competition
monopolistic competition
monopoly
oligopoly
4
In the graph, what happened to the equilbrium price when the supply curve moved from S1 to S2?
It indicated a decrease in demand
It did not change
The equilibrium price went down
The equilibrium price went up
5
Which BEST explains the relationship shown on the graph?
Fewer people will buy a product when its price increases.
The price of a product has no effect on consumer demand.
A product becomes scarcer as it price decreases.
A product costs more when many people want to purchase it.
6
Mr. Simpson is liable for all the debts of his company. Mr. Simpson has which type of business organization?
sole proprietorship
corporation
conglomerate
monopoly
7
Jorge & Fred have a product to sell. They decide to share the risks & profits by forming a
entrepreneurship.
partnership.
corporation.
sole proprietorship.
8
What is the relationship between quantity supplied and price?
They are inversely related.
They are directly related.
They are related through demand.
They are not related.
9
What is Mrs. Dillon's Daughters Name?
Priscilla
Rebecca
Stephanie
Jennifer
10
Which of these is the best economic definition of "pure competition"?
the market is dominated by a few buyers
the market is not dominated by either buyers or sellers
the market is dominated by two or more sellers
the market is dominated by one seller
11
An unincorporated business owned by a single person, which may or may not have employees, is an example of a(n)
corporation.
sole proprietorship.
partnership.
entrepreneurship.
12
The Statement "the quantity demanded of a product varies inversely with its price" is a definition of
the law of demand
the law of competition
Laissez-faire
the invisible hand
13
Which factor might cause an increase in the suppply of a product?
a decrease in productivity
the introduction of new technology
fewer sellers in the marketplace
an increase in the cost of raw materials
14
One reason that government regulation of natural monopolies is essential is
to create more opportunities for corporate investment.
to prevent the monopoly from raising prices uncontrollably.
to allow more customer input into methods of production.
to ensure that competition continues to flourish.
15
The demand for Twinkiedoodles in the months of June&Dec. The demand curve has moved to the right on the graph.This shows
the supply of Twinkie-Doodles has decreased
the demand for Twinkie-Doodles has increased
the price for Twinkie-Doodles went down
buyers & sellers cannot agree on a price
16
In the graph, the equilibrium price is approximately
$6.00
$5.00
$1.00
$3.00
17
What conclusion can be made about the U.S. economy by examining this chart?
All aspects of the economy are related.
The government plays the most important economic role.
People need to buy more things to help the economy.
Consumer spending has little-to-no economic impact.
18
Supply is the total amount of a ______________ that is available to consumers.
good or service
good or device
service or industry
product or warranty
19
Which type of business organization has the advantage of specialization, but the disadvantage of unlimited liability?
oligopoly
corporation
partnership
S-Corporation
20
The Law of Supply states that
the supply of a product is not affected by its price
when the supply of a product increases, the price of the product rises
when the supply of a product decreases, the price of the product falls
quantity supplied of product will increase when price of product increases
21
While demand is based on consumer purchases, supply is MOST LIKELY based on
the willingness to consumers to purchase a product
the willingness of producers to supply a product
consumer confidence in a complementary product
producers offering a wide range of prices
22
To have demand, what must you have
a basic need and a constant supply of the item
the ability to pay for the item.
the desire and the ability to pay for the item.
a desire for the item.
23
The diagram shows the circular flow of goods & resources. What is the primary purpose of this chart?
It indicates the changing tastes in the product market
It shows the relationship between supply & demand
It shows how households & businesses interact in a market economy
It shows the need for government intervention in any economic system
24
Assuming that the graph follows the normal laws of economics, the line represents
demand
production possibilities
supply
equilibrium price
25
Why is there no competition in a monopoly?
There are no close substitutes.
There are too many substitutes.
The government forbids competition.
Prices are set by the government.
26
The graph shows a demand curve. What can be said about the demand line moving to the right?
This indicates a reduced supply
An equilbrium price has been determined
Demand has decreased
Demand has increased
27
Did you do your study Guide so you are ready for your test?
Yes. I did most of it
Will be doing it tonight
No. I dont want a good grade
ofcourse because I choose to use my time wisely
28
A decrease in the price of a particular product will result in
an increase in the quantity demanded of that product
an increase in the quantity supplied of that product
a decrease in the demand for that product
a shift in the production possibilities frontier
29
A price set below the current market price is a characteristic of a
equilibrium price.
regular price.
price ceiling.
price floor.
30
Money that individuals receive from businesses return to businesses in
the payment for resources.
the product markets.
the purchase of land.
the factor markets.
31
How do individuals contribute to the circular flow of economic activity?
Businesses buy goods and services from individuals.
Individuals provide labor for factor markets&buy goods in product markets.
Individuals buy productive resources & provide labor for product market
Businesses purchase productive resources in product markets.
32
In which type of business organization do the owners have least input and decision-making on the day to day operations?
Monopoly
Partnership
Sole Proprietorship
Corporation
33
What is the name of the point at which supply and demand intersect?
plateau
equilibrium
profit margin
scarcity
34
In a business organization, the splitting of management and ownership into two distinct functions is an example of a(n)
corporation.
entrepreneur.
arbitage.
partnership.
