"The minimum wage should be increased so that low-income workers can afford to feed their families." This demonstrates a

a normative economic statement.

When the price of a good is higher than the equilibrium price,

sellers desire to produce and sell more than buyers wish to purchase.

Economics can be divided into two main branches of study:

microeconomics and macroeconomics.

The law of demand refers to the:

inverse relationship between the price of a good and the quantity demanded.

Pizza is a normal good if the demand

for pizza rises when income rises.

Which of the following are the characteristics of perfect competition:

Identical products, many sellers, price is determined by the market.

Which of the following would not cause an increase in the demand for cheese?

a technological advance that makes it cheaper to produce cheese

When quantity demanded decreases in response to a change in price:

there is a movement up along the demand curve.

Which of the following is a positive statement?

All of the above are positive statements.

If the price of tennis rackets were to increase, we would expect:

the demand for tennis balls to decrease.

Roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a

shortage to exist and the market price of roses to increase.

Macroeconomic topics do not generally include:

the production decisions of individual firms.

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Microeconomics Test 1. Spring 2025

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Questions 20

Answers

1
Each of the following is a factor that shifts demand except
price of related goods
production technology
expectations
tastes
2
"The minimum wage should be increased so that low-income workers can afford to feed their families." This demonstrates a
a positive economic statement.
a normative economic statement.
a negative economic statement.
the fallacy of composition.
3
When the price of a good is higher than the equilibrium price,
sellers desire to produce and sell more than buyers wish to purchase.
a shortage will exist.
buyers desire to purchase more than is produced.
quantity demanded exceeds quantity supplied.
4
Which of the following would lead to a decrease in the supply of watches?
A decrease in the expected future price of watches
A decrease in the price of watches
None of the above
An increase in the price of watches
5
Which of the following is not a factor that shifts supply?
expectations
tastes
technology
input prices
6
Economics can be divided into two main branches of study:
capitalism and communism.
microeconomics and macroeconomics.
demand and supply.
capitalism and socialism.
7
According to the text, hunter-gatherers:
usually worked more than 40 hours per week.
did work that was meaningful.
both of the above
8
The law of demand refers to the:
Inverse relationship between the price of a good and quantity supplied
increase in the quantity of a good made available when its price increases.
price increase that results from an increase in demand.
inverse relationship between the price of a good and the quantity demanded.
9
Pizza is a normal good if the demand
for pizza rises when the price of pizza falls.
for pizza rises when income reduces.
for pizza rises when income rises.
curve for pizza slopes upward.
10
"Ceteris paribus" means:
if events A and B occur together, one must cause the other.
all relevant details are included.
what is true for the individual must be true for the whole.
holding other things constant.
11
When there is capitalism, who faces scarcity?
Elon Musk
Neither
Both Elon Musk and Bill Gates
Bill Gates
12
Which of the following are the characteristics of perfect competition:
none of the above
A few sellers, price is determined by demand, same product
Identical products, many sellers, price is determined by the market.
Many sellers, different products, Sellers can dictate the price
13
Which of the following would not cause an increase in the demand for cheese?
an increase in the population
a technological advance that makes it cheaper to produce cheese
Increase in income given cheese is an normal good
a decrease in the price of crackers, which are consumed with cheese
14
When quantity demanded decreases in response to a change in price:
there is a movement down along the demand curve.
the demand curve shifts to the left.
the demand curve shifts to the right.
there is a movement up along the demand curve.
15
The supply curve is only possible because of perfect competition.
True
False
16
Which of the following is a positive statement?
Increased money supply growth will lead to a higher rate of inflation.
All of the above are positive statements.
There are more millionaires in Uganda than in the United States.
People watch more TV during finals week than during the rest of the term.
17
If the price of tennis rackets were to increase, we would expect:
the supply of tennis balls to decrease.
the demand for tennis balls to increase.
people to throw away their tennis racquets.
the demand for tennis balls to decrease.
18
Roses are currently selling for $20 per dozen, but the equilibrium price of roses is $30 per dozen. We would expect a
shortage to exist and the market price of roses to increase.
surplus to exist and the market price of roses to decrease.
shortage to exist and the market price of roses to decrease.
surplus to exist and the market price of roses to increase.
19
Macroeconomic topics do not generally include:
government spending and taxation.
aggregate demand.
inflation
the production decisions of individual firms.
20
You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that iTunes music downloads is an
luxury good
normal good
complementary good
inferior good

Microeconomics Test 1. Spring 2025 Flashcards | StudBud