Microeconomics Practice Exam

Which of the following is not a determinate of demand?

• Producer Expectation

• Complementary goods

• Consumer Expectations

• Inferior goods

A price ceiling results in a...

Consumers buy less of a good when their income falls if the good is...

• A normal good

• An inferior good

• A substitute good

• A complementary good

Which of the following causes the demand for hot dogs to decrease?

• An increase in the price of hamburgers

• A decline in the price of hot dogs

• An increase in the price of hot dog buns

• A decrease in the wages of hot dog makers

A lower price of good X causes the demand for good Z to fall if goods X and Z are:

• Normal goods

• Substitute goods

• Inferior goods

• Complementary goods

In which of the following are buyers and sellers price takers?

• Monopoly

• Oligopoly

• Monopolistic competition

• Perfect competition

Using the graph above which of the following situations would cause the shift of the supply curve from S1 to S2?

• The government reduces subsidies to wheat farmers.

• New fertilizers increase wheat crop yields.

• Firms exit the wheat industry.

• Drought reduces industry output by 25%.

Which form of business organization is easiest to organize but is LEAST able to benefit from specialization?

• sole proprietorship

• partnership

• limited partnership

• corporation

Firm X has developed a new mechanical device and has patented all of the key components used in its production.  As the sole producer of this device, Firm X is a...

• Oligopoly

• Monopolistic competition

• Perfect competition

• Monopoly

Which of the following products is most likely to have a relatively inelastic demand?

• Insulin

• Gatorade

• Taco Bell

• Stamps