Microeconomics Quiz

As Sam ate potato chips, the additional amount of pleasure he received from each successive chip, ceteris paribus, decreased. This is an example of

• total marginal utility

• diminishing marginal rate of substitution

• constrained optimization

• the substitution effect

• diminishing marginal utility

A consumer consumes two goods: Pepsi and tacos. After the price of Pepsi increases, ceteris paribus, the consumer consumes less of BOTH products. Therefore, for this consumer the _____effect is greater than the _____ effect.

• substitution; income

• income; substitution

• complementary; income

• income; complementary

• substitution; complementary

A change in which of the following would NOT cause a shift in the supply of corn?

• the price of fertilizer

• the price of soybeans

• the price of corn

• seed corn germination rates

• the number of corn farmers

Elasticity is a measure of only how responsive the quantity demanded by consumers is to a change in the price of product (has nothing to do with the quantity supplied by producers to a change in the price of the product).

• True

• False

• I don't know.

• This cannot be determined.

As the price of a good falls, the consumer is able to buy more it from a given income. This is known as the

• law of demand

• real income effect

• Samuelson effect

• Keynesian principle of consumption

• diminishing marginal product

The supply curve of a firm is equal to the

• average total cost curve above the shut-down point

• average fixed cost curve

• marginal cost curve above the break-even point

• average total cost curve above the break-even point

• marginal cost curve above the shut-down point

Which of the following is NOT a demand curve shifter for hamburger?

• the price of hamburger

• the price of hamburger buns

• health concerns

• income

• the price of chicken

In a perfectly competitive market, if firms are earning economic profits then

• additional firms will enter the industry, driving the price of the product down

• the government will tax the profits away

• additional firms will enter the industry driving the costs of production up

• costs of production will increase until profits are equal to zero

• none of the above

Those firms with relatively high _____ have relatively high _____.

• variable costs; profits

• costs; profits

• fixed costs; price variability

• fixed costs; losses

• none of the above

A change in each of the following would cause a shift in the demand curve for Pepsi EXCEPT

• demographics

• consumers' incomes

• the price of Pepsi

• export demand

• the price of Coke