Micro Economic Practice Final

a decrease in the price of a good will result in:

• an increase in demand

• an increase in supply

• an increase in the quantity demanded

• more being supplied

a good is inferior if which of the following is true?

• when income increases, the demand remains unchanged.

• when income increases, the demand increases.

• when income increases, the demand decreases.

• income and demand are unrelated

which of the following is not a determinant of supply?

• expectations regarding future prices

• the technology of production

• consumer tastes

• the cost of production

if the supply and demand curve intersect at a price of $16, then any price below that would result in:

• a surplus

• equilibrium

• a shortage

• an increase in demand

a perfect price-inelastic demand curve is:

• vertical

• horizontal

• upward-sloping

• downward-sloping

the director of river city public transport recently stated, "The last seven times we increased bus fares, revenues dropped." this remark suggests the demand for bus service is elastic.

• True

• False

we are forced to make choices because of

• efficiency

• scarcity

• the margin

• exploitation

concerning the PPF, an efficient point is a point that is

• impossible to reach

• on the PPF

• inside the PPF

• outside the PPF

An outward shift of a nation's production possibilities frontier represents

• an impossible situation

• economic growth

• a situation where a country produces more of one good and less of another

• rising prices of the two goods on production possibilities frontier model

comparative advantage means the ability to produce a good or service

• at a lower selling price than any other producer

• at a lower opportunity cost than any other producer

• of a higher quality than any other producer

• at a higher profit level than any other producer