Microeconomics is concerned with . . .

How prices are determined in individual markets

Ceteris paribus, an increase in demand will result in . . .

An increase in the price and a rise in quantity traded

Which of the following does not apply to equilibrium price?

It exists when there is excess demand or excess supply

What happened to the demand curve of pushchairs (baby strollers) after WWII during the so called baby boom?

It shifted outwards (to the right)

Which of the following does not explain why a supply curve generally slopes upwards?

Price and supply are inversely related

Which of the following is most likely to cause the demand curve for gold to shift to the right?

Anticipation of increasing gold prices in the near future

Allocative efficiency occurs when . . .

consumer surplus and producer surplus are maximised

Which of the following is not a fundamental economic question

Why production should take place

Which option is most likely to result in a movement along the demand curve for hybrid cars?

The imposition of a sales tax on all motor vehicles

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Review of demand, supply, equilibrium and some other stuff!

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Review of first few chapters of textbook

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Questions 19

Answers

1
Microeconomics is concerned with . . .
The distribution of income in an economy
How prices are determined in individual markets
Adjusting taxes and interest rates to manage the economy
The operation of the economy as a whole
2
What is the most effective way the government can encourage the production of a good or service that benefits society?
They can impose an indirect tax
They can grant a subsidy
Pass legislation that forces producers to produce that good
They can impose a direct tax
3
Ceteris paribus, an increase in demand will result in . . .
A fall in the price of the product
An increase in the cost of producing the product
An increase in price and a fall in quantity traded
An increase in the price and a rise in quantity traded
4
To be at a point on the PPC, all of the following conditions must be met except . . .
Zero opportunity cost
Allocative efficiency
Full employment of resources
Productive efficiency
5
Which of the following does not apply to equilibrium price?
It exists when there is excess demand or excess supply
There is no tendency for price to change
It is affected by both the forces of demand and supply
Buyers and sellers are able to trade at the same price level
6
Which of the following is likely to result in a shift of the demand curve for Spit chewing gum?
Improved packaging
A sales tax on chewing gum
A rise in the cost of sugar
A reduction in the price
7
When the market price is set above equilibrium price, there is a tendency for . . .
quantity supplied to rise
excess demand
the market price to rise
the market price to fall
8
Which of the following factors can explain a rise in the equilibrium price of new houses?
Government permission to build more homes in the city
An increase in interest rates
A rise in consumer incomes
A fall in the cost of constructing new homes
9
What happened to the demand curve of pushchairs (baby strollers) after WWII during the so called baby boom?
It remained the same
It shifted outwards (to the right)
There was a movement along the demand curve
It shifted inwards (to the left)
10
Which of the following does not explain why a supply curve generally slopes upwards?
Profit margins rise at higher prices
Price and supply are inversely related
More suppliers are able to produce as prices increase
Less firms are attracted to the market as market prices fall
11
Which of the following would shift the supply curve of Cadbury chocolate bars to the left?
An increase in cocoa prices
Improved production technologies at Cadbury factories
Improved weather conditions for growing cocoa beans
An increase in the price of Cadbury chocolate bars
12
A change in the supply for a product occurs as a result of a change in . . .
Consumer habits and tastes
Technological progress
The price of complementary goods
Income
13
The government decides to increase all wages in the country by 10 %. What happens to the supply curve for laptops?
There is a movement along the supply curve
It remains the same
It shifts outwards to the right
It shifts inwards to the left
14
Which one of the following alternatives is an example of a market?
The New York Stock Exchange
Ebay
A place in your town where you can buy fruit
All of them
15
On a PPF diagram, technological progress can be shown by a(n) . . .
inward shift of the PPC
outward shift of the PPC
movement along the PPC curve
movement from a point inside the curve to a point on the PPC
16
Which of the following is most likely to cause the demand curve for gold to shift to the right?
An increase in the domestic exchange rate
Anticipation of increasing gold prices in the near future
Stable foreign exchange markets
A fall in the price of silver
17
Allocative efficiency occurs when . . .
consumer surplus and producer surplus are maximised
producer surplus ensures all firms enjoy economies of scale
consumer surplus exceeds producer surplus
price is equal to the average costs of production
18
Which of the following is not a fundamental economic question
What production should take place
Why production should take place
How production should take place
For whom production should take place
19
Which option is most likely to result in a movement along the demand curve for hybrid cars?
A rise in the price of alternative fuel cars
A successful advertising campaign promoting efficient travel
A rise in consumer income levels
The imposition of a sales tax on all motor vehicles

Review of demand, supply, equilibrium and some other stuff! Flashcards | StudBud