Micoeconomics Week 1 And 2 Question Preview (ID: 26755)


This Test Contains Questions That Includes The Following Topics: -The Market Forces Of Supply And Demand -Principle Of Microeconomics. TEACHERS: click here for quick copy question ID numbers.

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.

The adage, There is no such thing as a free lunch, means
a) Even people on welfare have to pay for food.
b) The cost of living is always increasing.
c) People face tradeoffs.
d) All costs are included in the price of a product.

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 cost of tuition and books to attend the graduate program
b) The $30,000 salary that you could have earned if you retained your job at the bank
c) The $45,000 salary that you will be able to earn after having completed your graduate program
d) The value of insurance coverage and other employee benefits you would have received if you retained your job at the bank

A rational decision maker
a) Ignores marginal changes and focuses instead on “the big picture.”
b) Ignores the likely effects of government policies when he or she makes choices.
c) Takes an action only if the marginal benefit of that action exceeds the marginal cost of that action.
d) Takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action an

Trade makes costs
a) Higher and reduces the variety of goods and services available.
b) Higher but raises the variety of goods and services available.
c) Lower but reduces the variety of goods and services available.
d) Lower and raises the variety of goods and services available.

In a competitive market, the quantity of a product produced and the price of the product are determined by
a) Buyers.
b) Sellers.
c) Both buyers and sellers.
d) None of the above is correct

A decrease in the price of a good will
a) Increase demand.
b) Decrease demand.
c) Increase quantity demanded.
d) Decrease quantity demanded.

Which of the following would not shift the demand curve for mp3 players?
a) A decrease in the price of mp3 players
b) A fad that makes mp3 players more popular among 12-25 year olds
c) An increase in the price of digital music downloads, a complement for mp3 players
d) A decrease in the price of satellite radio, a substitute for mp3 players

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) Demand for bicycle assembly workers will increase.
b) Supply of bicycles will shift to the right.
c) Supply of bicycles will shift to the left.
d) Firm must increase output to maintain profit levels.

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) The quantity supplied of blue jeans exceeds the quantity demanded of blue jeans at the $30 price.
b) The equilibrium quantity of blue jeans exceeds the quantity demanded at the $30 price.
c) There is a surplus of blue jeans at the $30 price.
d) All of the above are correct.

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 demand for sugar and a decrease in the quantity supplied of sugar.
b) Decrease in the supply of sugar and a decrease in the quantity demanded of sugar.
c) Decrease in the equilibrium price of sugar and an increase in the equilibrium quantity of sugar.
d) Increase in the equilibrium price of sugar and a decrease in the equilibrium quantity of sugar

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 decrease, but the impact on equilibrium quantity would be ambiguous.
b) Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.
c) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.
d) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.

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