Microeconomics Test Review

Question 1

When supply and demand curves increase they BOTH move...

Accepted Answer

To the right

Question 2

What is equilibrium price?

Accepted Answer

The determined place where the supply & demand curves cross

Question 3

When a price is set below equilibrium, this causes...

Accepted Answer

A shortage

Question 4

What happens to equilibrium price and quantity after a decrease in supply?

Accepted Answer

price increases, quantity decreases

Question 5

A low price tells consumers that they should...

Accepted Answer

buy more

Question 6

When supply and demand curves decrease they BOTH move...

Accepted Answer

To the left

Question 7

raw materials, utility bills, and hourly labor are all examples of...

Accepted Answer

variable costs

Question 8

What is price ceiling?

Accepted Answer

maximum price

Question 9

Which of the following shifters of demand is impacted by trends, popularity, and advertising?

Accepted Answer

Tastes and Preferences

Question 10

What is profit incentive?

Accepted Answer

Desire to make money that motivates people to produce g/s

Question 11

The Law of Demand states that as price increases, quantity demanded...

Accepted Answer

decrease

Question 12

What effect do taxes have on the equilibrium price?

Accepted Answer

Raises it

Question 13

A price floor creates a...

Accepted Answer

Surplus

Question 14

Price floor causes?

Accepted Answer

Excess supply

Question 15

What is the elasticity of this curve?

Accepted Answer

Perfectly Inelastic

Question 16

New taxes always cause which of the following

Accepted Answer

Decreased Supply

Question 17

Which is an example of substitute goods?

Accepted Answer

Coke and Pepsi

Question 18

Which of the following is an example of an input price for the lumber industry?

Accepted Answer

the price of harvesting mature trees in the Pacific Northwest

Question 19

A high price tells producers to...

Accepted Answer

produce more

Question 20

An increase in demand always causes...

Accepted Answer

equilibrium price and quantity to increase

Question 21

Minimum wage is an example of...

Accepted Answer

price floor

Question 22

Over time, where do prices tend to move toward?

Accepted Answer

They move toward equilibrium

Question 23

What is the elasticity of this curve?

Accepted Answer

Relatively Elastic

Question 24

What changes demand?

Accepted Answer

Prices of Related Goods, tastes and preferences

Question 25

An increase in the price of a complimentary good will cause which of the following?

Accepted Answer

Decreased Demand

Question 26

An increase in the price of a substitute good will cause which of the following?

Accepted Answer

Increased Demand

Question 27

What is the elasticity of this curve?

Accepted Answer

Perfectly Elastic

Question 28

Rent control is an example of...

Accepted Answer

price ceiling

Question 29

A price ceiling creates a...

Accepted Answer

Shortage

Question 30

What happens to equilibrium price and quantity after the price of a good is increased?

Accepted Answer

There is no equilibrium - SURPLUS

Question 31

What happens to equilibrium price and quantity after a supply increase?

Accepted Answer

price decreases, quantity increases

Question 32

which of the following refers to the costs of producing one more unit?

Accepted Answer

Marginal Cost

Question 33

When price is set above equilibrium this causes...

Accepted Answer

A surplus

Question 34

What happens to equilibrium price and quantity after a decrease in demand?

Accepted Answer

both price and quantity decrease

Question 35

The law of supply states that as price rises...

Accepted Answer

Quantity Supplied Rises

Question 36

A good that consumers will buy at the same quantity no matter the price is called...

Accepted Answer

Perfectly Inelastic

Question 37

What is the elasticity of this curve?

Accepted Answer

Relatively Inelastic

Question 38

Total cost is equal to...

Accepted Answer

fixed costs plus variable costs

Question 39

Subsidies always cause which of the following?

Accepted Answer

Increased Supply

Question 40

All of the following are shifters of demand EXCEPT:

Accepted Answer

Number of Producers

Question 41

Pick the pairs of goods that are complimentary goods?

Accepted Answer

Coffee and Creamer

Question 42

What is price elasticity?

Accepted Answer

change in quantity relative to change in price

Question 43

A new technology will do which of the following?

Accepted Answer

Increase Supply

Question 44

An increase in supply will always cause...

Accepted Answer

EQ-Price to decrease and EQ-Quantity to increase

Question 45

What happens to price and quantity of equilibrium, after an increase in demand?

Accepted Answer

both price and quantity increase

Microeconomics Test Review

Questions 45

Microeconomics Test Review

Questions 45