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Micro Economics Review 1 Flashcards | StudBud
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Micro Economics Review 1
Micro Economics Review 1
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Micro Economics Review 1
Flashcards
24 cards
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Practice quiz
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Questions
24
Answers
1
When we can't produce more of a good without giving up some other good we value more highly...
We have achieved "Production Efficiency"
We have achieved "Equal Opportunity"
We have achieved "Allocative Efficiency"
We have encountered "Inefficiency"
2
In the market for chocolate chip cookies, an increase in demand will result in
A decrease in price and an increase in quantity
An increase in price and a decrease in quantity
An increase in both price and quantity
A decrease in both price and quantity
3
All of the following are likely to cause an increase in the supply of beef
except
:
An increase in the demand for chicken
A fall in the price of feed grain that is fed to cattle
An increase in the number of cattle ranchers
An increase in the demand for leather goods
4
An upward or outward shift in the production possibilities frontier is indicative of?
Efficiency
Equity
Economic growth
Inefficiency
5
The amount that consumers plan to buy during a given time period at a particular price is the?
Demand
Quantity Demanded
Quantity Supplied
Supply
6
A price ceiling can cause excess demand that causes creation of an illegal market called a...
Black market
Regulated market
Free market
Free trade market
7
The price elasticity of demand for tickets is -0.5. To increase sales by 8% you should...
decrease the price by... 2%
decrease the price by... 16%
decrease the price by... 8%
decrease the price by... 4%
8
Factors that influence the elasticity of demand include all of the following
except
Time elapsed since a price change
Proportion of income spent on the good
Closeness of substitutes
Resource substitution possibilities
9
A minimum wage is an example of
A tax
Price Floor
Price ceiling
Subsidy
10
Income elasticity is_____ for normal goods
Positive
Equal to 1
Greater than 1
Negative
11
In the circular flow of the market economy, Households are...
sellers in resource markets and buyers in goods markets
are excluded and only firms are represented
buyers in resources markets and sellers in goods markets
12
Minimum wage legislation leads to
Economic growth
Unemployment
Capital accumulation
Efficiency
13
If the demand curve is perfectly inelastic the burden of a tax on suppliers is borne by...
Entirely by the suppliers
Partly by the suppliers, and mostly by the consumers.
Mostly by the suppliers and partly by the consumers.
Entirely by the consumers
14
Cross-Price EOD equals the % change in____ divided by the % change in_____ of a related good.
Price, Price
Quantity, Quantity
Price, Quantity
Quantity, Price
15
A price elasticity of demand for a good or service of -2.5 tells us that
Quantity demanded decreases by 2.5% when price rises by 1%
The price rises by 2.5% when quantity demanded falls by 1%
The price changes by $2.50 when quantity changes by one unit
Quantity demanded falls 2.5 units when price changes by $1
16
If the price of a good falls, then the demand curve for a complementary good will...
Remain the same
Decrease initially and then increase
Increase
Decrease
17
The elasticity of demand for a good that has a lot of close substitutes is likely to be...
Elastic
Have an elasticity of zero
Unit elastic
Inelastic
18
If Quantity Demanded falls from 10 to 5 pounds when price rises from $4.00 to $5.00...
price elasticity of demand = 1
price elasticity of demand = 5
price elasticity of demand = 1/3
price elasticity of demand = 3
19
A market moves toward its equilibrium through adjustments in
Supply
Price
Quantity
Demand
20
The income elasticity of demand for an inferior good is
Greater than zero
Less than zero
Equal to one
Equal to zero
21
"Ceteris Paribus" means...
"the invisible hand"
"let the buyer beware"
“all other things being equal”
"free markets are best"
22
A good whose demand increases as income increases is a(n)
Inferior good
Subsitute
Normal good
Complement
23
If a price cut decreases total revenue, demand is
Relatively inelastic
Perfectly elastic
Relatively elastic
Unit elastic
24
If a society is at a point inside the production possibilities frontier, it is experiencing
Equity
Maximum output
Inefficiency
Efficiency
