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Microeconomics
Microeconomics
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Questions
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Answers
1
If supply and demand increase on an equilibrium market at the same time, what are the results on quantity?
increase
decrease
inderminate
impossible
2
Taxation of a good in perfect competition will
all of the above
increase prices
increase deadweight loss
decrease production
3
Products that are inelastic are usually
Generic products
Highly priced for few consumers
Necessities without substitutes
4
Price ceilings are set for products that are essential but expensive
False
True
5
Wage rates for qualified electricians goes up. What would happen to the price of new home construction?
Rise
Fall
Stay the Same
6
What does Microeconomics study?
Decisions of society as a whole
The study of scarcity
Decisions of individuals in the market
7
Taxation on a good with perfectly inelastic demand
decrease production
all of the above
increase prices
increase deadweight loss
8
Based on the answers to the last two questions, what were the profits for one day?
$280
$100
$900
$820
9
Taxing an elastic product creates
little tax revenue and large deadweight loss
a lot of tax revenue and small deadweight loss
10
Which market structure has a bent demand curve?
Monopoly
Monopolistic Competition
Perfect Competition
Oligopoly
11
Result of price and quantity on a market when the demand increases
price up, quantity up
price down, quantity down
price up, quantity down
price down, quantity up
12
The government regulates firms and markets for which of the following reasons?
Both of these is true
Lack of competition
Neither of these is true
Consumer safety
13
If prices of a substitute good increased, what would happen to the demand of the original good?
shift to the right
nothing
shift to the left
14
Which markets structure is likely to have the most differentiated products?
Oligopoly
Perfect Competition
Monopoly
Monopolistic Competition
15
Supplies at the tire shop have been difficult to find lately. What would happen to prices in the tire market?
It would not effect prices
Prices would increase
Prices would decrease
16
What happens to price and quantity in a perfectly competitive market when the supply decreases
price decrease quantity decrease
Price increase quantity decrease
price decrease quantity increase
Price stays the same, quantity decreases
17
Result of price and quantity on a market when the supply decreases
price up, quantity up
price down, quantity up
price down, quantity down
price up, quantity down
18
Because of the demand curve in perfect competition, what must the firm do to increase its profits?
Lower Prices
Increase Production
Increase Efficiency
Raise Prices
19
In which market structure would you most likely find collusion?
Oligopoly
Monopolistic Competition
Perfect Competition
Monopoly
20
Why are cartels illegal in the US?
They eliminate competition
They compete against the government
21
If supply and demand increase on an equilibrium market at the same time, what are the results on price?
impossible
decrease
increase
inderminate
22
If the government placed a price floor on a good what condition would it create with respect to supply and demand?
Surplus
Equilibrium
Huh?
Shortage
23
If the fixed costs are $100 and variable labor cost are $10 per hour, how much are the total costs for an 8-hour day?
$100
$80
$180
$20
24
If the price of the product is $5 and your firm sells 200 units in one day, what are the total revenues?
$40
$200
$100
$1000
25
Taxation will
decrease production
increase deadweight loss
all of the above
increase prices
26
Products that are used together are
Complements
Subsitutes
27
A product that gets increasing total revenues when prices are reduced is
Elastic
Inelastic
28
In which market structure would the competition be the greatest?
Monopoly
Oligopoly
Monopolistic Competition
Perfect Competition
29
If the quantity of goods sold decreases by 10% when the prices rise by 5%, the good is
Elastic
Inelastic
30
As temperatures rise the demand for pools would shift the demand curve to the
Right
Left
It would not shift
