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Micoeconomics Week 1 And 2
Test Description: This test contains questions that includes the following topics: -The Market Forces of Supply and Demand -Principle of microeconomics
Instructions: Answer all questions to get your test result.
1) The phenomenon of scarcity stems from the fact that:
A
Most economies’ production methods are not very good.
B
In most economies, wealthy people consume disproportionate quantities of goods and services.
C
Governments restrict production of too many goods and services.
D
Resources are limited.
2) The adage, There is no such thing as a free lunch, means
A
People face tradeoffs.
B
Even people on welfare have to pay for food.
C
All costs are included in the price of a product.
D
The cost of living is always increasing.
3) Suppose after graduating from college you get a job working at a bank earning $30,000 per year. After two years of working at the bank earning the same salary, you have an opportunity to enroll in a one-year graduate program that would require you to
A
The value of insurance coverage and other employee benefits you would have received if you retained your job at the bank
B
The cost of tuition and books to attend the graduate program
C
The $45,000 salary that you will be able to earn after having completed your graduate program
D
The $30,000 salary that you could have earned if you retained your job at the bank
4) A rational decision maker
A
Ignores the likely effects of government policies when he or she makes choices.
B
Takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action an
C
Ignores marginal changes and focuses instead on “the big picture.”
D
Takes an action only if the marginal benefit of that action exceeds the marginal cost of that action.
5) Trade makes costs
A
Higher and reduces the variety of goods and services available.
B
Lower but reduces the variety of goods and services available.
C
Lower and raises the variety of goods and services available.
D
Higher but raises the variety of goods and services available.
6) In a competitive market, the quantity of a product produced and the price of the product are determined by
A
Buyers.
B
None of the above is correct
C
Both buyers and sellers.
D
Sellers.
7) A decrease in the price of a good will
A
Increase quantity demanded.
B
Decrease demand.
C
Decrease quantity demanded.
D
Increase demand.
8) Which of the following would not shift the demand curve for mp3 players?
A
A decrease in the price of mp3 players
B
A decrease in the price of satellite radio, a substitute for mp3 players
C
A fad that makes mp3 players more popular among 12-25 year olds
D
An increase in the price of digital music downloads, a complement for mp3 players
9) Workers at a bicycle assembly plant currently earn the mandatory minimum wage. If the federal government increases the minimum wage by $1.00 per hour, then it is likely that the?
A
Firm must increase output to maintain profit levels.
B
Demand for bicycle assembly workers will increase.
C
Supply of bicycles will shift to the right.
D
Supply of bicycles will shift to the left.
10) The current price of blue jeans is $30 per pair, but the equilibrium price of blue jeans is $25 per pair. As a result,
A
There is a surplus of blue jeans at the $30 price.
B
All of the above are correct.
C
The equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price.
D
The quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price.
11) Suppose buyers of coffee and sugar regard the two goods as complements. Then an increase in the price of coffee will cause a(n)
A
Decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
B
Increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar
C
Decrease in the demand for sugar and a decrease in the quantity supplied of sugar.
D
Decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
12) Suppose the number of buyers in a market increases and a technological advancement occurs also. What would we expect to happen in the market?
A
Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
B
Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
C
Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.
D
Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
*select an answer for all questions
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