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Economics Quiz

Authored by Nilantha Senaratne

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University

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Economics Quiz
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10 questions

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1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When the price of a normal good decreases, the substitution effect causes:

The quantity demanded to increase as consumers switch from other goods.

The quantity demanded to increase due to higher real income.

No change in quantity demanded because preferences remain constant.

The demand curve to shift to the right.

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Suppose the government imposes a price floor above the equilibrium price in a competitive market. What is the likely outcome?

A shortage of goods.

A surplus of goods.

Equilibrium quantity will increase.

There will be no effect on the market.

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If the cross-price elasticity of demand between two goods is negative, these goods are:

Substitutes

Complements

Normal goods

Inferior goods

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The concept of diminishing marginal utility implies that:

Consumers will continue to increase consumption of a good indefinitely.

Consumers will experience less additional satisfaction from consuming additional units of a good.

Consumers will stop consuming a good after a certain point.

Consumers will experience increasing satisfaction from consuming additional units of a good.

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

The additional satisfaction from consuming an additional unit of a good decreases as more of the good is consumed. This statement is an example of which economic principle?

The law of increasing marginal utility.

The law of diminishing marginal utility.

Total utility decreases as more of a good is consumed.

The first unit of consumption provides the lowest utility.

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Consider a consumer with the following marginal utility schedule for oranges: 1st orange: 20 utils, 2nd orange: 15 utils, 3rd orange: 10 utils. If the price of an orange is $2, and the consumer's marginal utility of money is 5 utils per dollar, how many oranges should the consumer purchase to maximize utility?

0

1

2

3

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If two goods are perfect substitutes, the consumer’s indifference curve will be:

L-shaped

Downward sloping and convex to the origin

Downward sloping and linear

Horizontal

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