What is consumer surplus?

The difference between buyers' values and the price, The distance between equilibrium and the demand curve

What happens at equilibrium?

Quantity demanded equals quantity supplied

What is the definition of opportunity cost?

The net value of the next best alternative

What is the law of supply?

As the price increases, quantity supplied will increase.

What is the law of demand?

As the prices decreases, quantity demanded will increase.

Supply increases while demand decreases. What happens to price and quantity?

Price decreases, quantity can't say

What is comparative advantage?

Whoever gives up the least to produce should produce it

What is a substitute good?

An item that is bought instead of the item of interest

Demand increases. What happens to price and quantity?

Price increases, quantity increases

What is the law of diminishing marginal utility?

Marginal utility goes down as we get more of something

A tornado destroyed half of the corn. What happens to price and quantity?

Price increases, quantity decreases

Which of the following is a positive statement?

The first microeconomics exam is on Thursday 9/27/2018.

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Exam 1 Review

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A quiz for microeconomics students

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Questions 20

Answers

1
True of False. Two points on the same indifference curve give you equal amounts of utility.
True
False
2
The equilibrium price is $10. Suddenly the price rises to $20. What problem does this cause?
Excess supply
Shortage
Surplus
Excess demand
3
What is consumer surplus?
The difference between buyers' values and the price
The distance between equilibrium and the demand curve
The difference between producers' values and the price
The distance between equilibrium and the supply curve
4
What happens at equilibrium?
Quantity demanded does not equal quantity supplied
Quantity demanded is greater than quantity supplied
Quantity demanded equals quantity supplied
Quantity demanded is less than quantity supplied
5
What is the definition of opportunity cost?
the benefit from an increase in an activity
(what you get)/(what you give up)
the cost of an increase in an activity
The net value of the next best alternative
6
What is the law of supply?
As the price increases, quantity supplied will decrease.
As the price increases, quantity supplied will increase.
As the price increases, supply will increase.
As the price increases, supply will decrease.
7
What is the law of demand?
As the price increases, demand will increase.
As the price increases, quantity demanded will increase.
As the price decreases, demand will increase.
As the prices decreases, quantity demanded will increase.
8
Supply increases while demand decreases. What happens to price and quantity?
Price can't say, quantity decreases
Price increases, quantity can't say
Price decreases, quantity can't say
Price can't say, quantity increases
9
What is comparative advantage?
The least efficient producer of something should produce it
Whoever gives up the least to produce should produce it
Whoever gives up the most to produce should produce it
The most efficient producer of something should produce it
10
On a graph, the closer you are to the ____ and to the ______, the happier you will be.
up, right
up, left
bottom, left
bottom, right
11
Which of the following is not a determinant of demand?
Demographics
Price of Related Goods
Income
Price
12
What is a substitute good?
An item that is bought instead of the item of interest
An item that is bought with the item of interest
13
What is the equation to find the utility maximizing point?
MUx/Px=MUy/Py
MUx/Px>MUy/Py
MUx/Px<MUy/Py
14
As income increases, people want to buy more Bugattis. Are Bugattis a normal or inferior good?
Both
Inferior
Neither
Normal
15
If MUx/Px = $7 and the MUy/Py = $9, what should the consumer do to maximize their utility?
Nothing
Buy more of good y
Buy more of good x
16
Demand increases. What happens to price and quantity?
Price decreases, quantity decreases
Price increases, quantity decreases
Price decreases, quantity increases
Price increases, quantity increases
17
What is the law of diminishing marginal utility?
Marginal utility goes down as we get more of something
Marginal utility increases as we get more of something
18
Which of the following is not a determinant of supply?
Technology
Price
Price of Inputs
Natural Events
19
A tornado destroyed half of the corn. What happens to price and quantity?
Price decreases, quantity decreases
Price increases, quantity decreases
Price decreases, quantity increases
Price increases, quantity increases
20
Which of the following is a positive statement?
Blue is the prettiest color.
The first microeconomics exam is on Thursday 9/27/2018.
Pizza with pineapple on it is not good.
Economics is the best subject.

Exam 1 Review Flashcards | StudBud