Unit 2: Microeconomics

Question 1

Last summer it was so dry that corn could not grow well. What will probably happen?

Accepted Answer

Price will increase

Question 2

Most common example of a price floor

Accepted Answer

Minimum Wage

Question 3

Due to a technological breakthrough, the price of cheese declines. In the market for pizza...

Accepted Answer

Supply increases

Question 4

Describes a market in which one firm controls the supply and pricing of a good or service?

Accepted Answer

Monopoly

Question 5

Which of the following has the most market power

Accepted Answer

Monopoly

Question 6

How many businesses make up an oligopoly?

Accepted Answer

Few

Question 7

In the circular flow model, the resource markets are the markets in which

Accepted Answer

land, labor, & capital are bought & sold

Question 8

The circular flow model shows that goods and services flow from

Accepted Answer

businesses to households

Question 9

If a general partnership fails, who is responsible for the debts?

Accepted Answer

All of the partners

Question 10

Mr. Simpson is liable for all the debts of his company. Mr. Simpson has which type of business?

Accepted Answer

Sole Proprietorship

Question 11

A good is "normal" if.....

Accepted Answer

Demand increases with income

Question 12

This business type is complex to start, but protects the owners from unlimited liability

Accepted Answer

Corporation

Question 13

Which market structure has the lowest number of suppliers?

Accepted Answer

monopoly

Question 14

This market structure only has ONE seller.

Accepted Answer

Monopoly

Question 15

On a supply and demand graph, what is the point called at which Qd equals Qs?

Accepted Answer

Equilibrium

Question 16

Assume Company 1 and Company 2 operate as an oligopoly. Which statement BEST represents this?

Accepted Answer

They control over 75% of the market

Question 17

When Supply decreases the...

Accepted Answer

curve shifts left, prices rise

Question 18

Market where many businesses provide a similar (not same) product or service

Accepted Answer

Monopolistic Competition

Question 19

When the price of pears increases, we expect...

Accepted Answer

Quantity Demanded of Pears to fall

Question 20

An oligopoly is:

Accepted Answer

a few firms control the market, high barriers to entry

Question 21

In an oligopoly...

Accepted Answer

a market is shared by a small number of producers.

Question 22

Within the circular flow, there are two markets. These markets are the

Accepted Answer

product market & resource market.

Question 23

When Supply increases the...

Accepted Answer

curve shifts right, prices fall

Question 24

What is the result of a price ceiling which is a price set below the equilibrium price?

Accepted Answer

Shortage

Question 25

Which market structure has the highest barriers to entry?

Accepted Answer

Monopoly

Question 26

Which market structure is this

Accepted Answer

Oligopoly

Question 27

The government subsidizes the production of pizza. In the market for pizza...

Accepted Answer

Supply increases

Question 28

The apple market is at Eq. Apple growers discover a new pesticide that increases production.

Accepted Answer

Price goes down & quantity goes up

Question 29

Law of demand says that as prices go up, quantity demanded will go ________

Accepted Answer

Down

Question 30

If a government sets a maximum price for a good or service, what does it create?

Accepted Answer

Price ceiling

Question 31

If the price of an item increases, demand for its substitutes

Accepted Answer

increases

Question 32

The market for jeans is at Equilibrium. If the price of khakis (a substitute) decreases....

Accepted Answer

Price & quantity go down

Question 33

Perfect competition is characterized by:

Accepted Answer

the inability of any one firm to influence price

Question 34

Most common example of a price ceiling

Accepted Answer

Rent Control

Question 35

Monopoly and Monopolistic Competition means the same.

Accepted Answer

False

Question 36

A disadvantage of this business type is the potential for conflict between owners

Accepted Answer

Partnership

Question 37

In perfect competition, there are...

Accepted Answer

Many buyers and sellers

Question 38

Market structure where many firms supply an identical product

Accepted Answer

Perfect Competition

Question 39

Which market is a "price-taker"?

Accepted Answer

Perfect Competition

Question 40

Two pizza shops close down. In the market for pizza...

Accepted Answer

Supply decreases

Question 41

Your uncle owns a convenience store that has branches nationwide. His store is an example of a

Accepted Answer

Business franchise

Question 42

The two primary players in the circular flow model are:

Accepted Answer

households and businesses

Question 43

An effective price floor is located

Accepted Answer

Above Equilibrium

Question 44

Which of the following is a feature of monopolistic competition?

Accepted Answer

differentiated products

Question 45

When the income in households increases, what is the likely result

Accepted Answer

The demand curve for normal goods shifts to the right

Question 46

Which is a disadvantage of a corporation?

Accepted Answer

Double taxation

Question 47

This type of market is a "price maker".

Accepted Answer

monopoly

Question 48

When Demand decreases the...

Accepted Answer

curve shifts left, prices fall

Question 49

Which factor will decrease the demand for a product?

Accepted Answer

A decrease in the number of buyers

Question 50

In monopolistic competition:

Accepted Answer

all of these are correct

Question 51

When Demand increases the...

Accepted Answer

curve shifts right, prices rise

Question 52

A key advantage of a partnership is

Accepted Answer

The ability for partners to specialize

Question 53

Which of the following is a disadvantage of a sole proprietorship?

Accepted Answer

lack of permanence

Question 54

The Law of Supply say that as prices go up, quantity supplied will go __________.

Accepted Answer

Up

Question 55

What effect would a sale have on the demand for clothing?

Accepted Answer

Demand would remain unchanged, Qd increases

Question 56

Which of the following is the best example of the law of supply?

Accepted Answer

sandwich shop increases # of sandwiches when price increases

Question 57

In which market structure does a firm have least control over its product’s price?

Accepted Answer

Perfect Competition

Unit 2: Microeconomics

Questions 57

Unit 2: Microeconomics

Questions 57