Econ Focused Quiz 18 (Section 2 Summary)

What is the central topic of microeconomics?

• deciding the number of consumers and producers in markets

• deciding the government's role in the economy

• accounting for the output gap in national economics

• making decisions based on Pareto efficiency

• the interaction of supply and demand

Which feature is NOT a characteristic of perfectly competitive markets?

• highly standardized goods

• a well-informed populace

• each firm having market power

• a large number of sellers

• a large number of buyers

According to the law of demand, as prices increase,

• quantity supplied decreases

• quantity demanded decreases

• price floors are added

• deadweight loss decreases

• producer surplus decreases

Which factor does NOT shift the demand curve for a good?

• the price of related goods

• expectations

• the number of buyers

• increases in the price of the good

• consumers' tastes

According to the law of supply, as prices increase,

• quantity demanded increases

• the government increases taxes

• crowding out occurs

• consumer surplus increases

• quantity supplied increases

Which factor does NOT shift the supply curve?

• the number of sellers

• the technology used

• the number of buyers

• the price of inputs

• consumer expectations

On a graph, where is the ideal price in a perfectly competitive market?

• at the price control

• at producer surplus

• at equilibrium

• at marginal revenue

• at deadweight loss

What does the competitive market model maximize?

• liquidity

• total surplus

• gains from trade

• money supply

• crowding out

How would a seasoned market analyst measure the responsiveness of supply and demand to price changes?

• calculating nominal GDP

• using monetary policy

• using elasticity

• measuring real GDP

• observing net capital outflow

Which option is NOT an example of government intervention?

• price floors

• price ceilings

• monetary policy

• taxation

• market pricing