Unit 2 Progress Check: MCQ - AP Microeconomics

The table below shows the values of different elasticities of demand for good J at the market equilibrium price.

• Good J is a normal good.

• Good J's demand is elastic.

• Good J is an inferior good.

• Good J is a complement in consumption to good Y.

• Good J is a substitute in consumption to good Z.

Which of the following would result in the greatest rightward shift of the demand curve for good J?

• A 50% decrease in the price of good J.

• A 20% increase in the price of good X.

• A 10% increase in the price of good Y.

• A 10% increase in the price of good Z.

• A 10% decrease in income.

An increase in the price of good X causes buyers to want to buy more of good Y. Which of the following explains the resulting change in the market?

• The demand curve for good X will shift to the right because the goods are substitutes in consumption.

• The demand curve for good Y will shift to the right because the goods are substitutes in consumption.

• The demand curve for good X will shift to the left because the goods are complements in consumption.

• The demand curve for good Y will shift to the left because the goods are complements in consumption.

• There will be a downward movement along the demand curve for good X because the goods are complements in consumption.

Which of the following correctly describes the income effect associated with the law of demand?

• If consumer income increases, there will be an upward movement along the demand curve for a normal good.

• If consumer income increases, the demand curve will shift to the right for an inferior good.

• If the price of a good increases, the demand for the good decreases because the demand for its substitute in consumption increases.

• If the price of a good decreases, the demand for the good increases because the lower price increases the demand for its complement in consumption.

• If the price of a normal good decreases, the purchasing power of a consumer’s income increases and therefore consumers will be willing and able to purchase more of the good.

A change in which of the following causes a movement along a given demand curve for a normal good?

• A change in the price of the good itself causes a movement along a given demand curve for a normal good.

• A change in consumer income.

• A change in the price of a substitute good.

• A change in consumer preferences.

Which of the following will cause a movement along the demand curve for a good?

• Consumer income

• The demand for the good

• The price of the good

• The price of a substitute good in consumption

• The number of buyers

Which of the following will occur as a result of a decrease in the prices of the inputs used to produce a good?

• The quantity supplied would increase at each possible price for the good.

• The price of the good would increase for any given quantity supplied.

• The quantity supplied would increase as the price of the good increased.

• The quantity supplied would increase as the price of the good decreased.

• The price of the good would increase as the quantity supplied decreased.

Which of the following explains why the supply curve is upward sloping?

• At a higher price, consumers are willing to buy more of the good.

• At a lower price, consumers are able to buy more of the good.

• Producers receive subsidies as they increase production.

• At a higher quantity, producers are more able to control the market price.

• At a higher price, producers are willing to sell more to increase their profits.

The market supply curve for a product is derived from the individual firm supply curves by

• multiplying the equilibrium quantity sold by the number of consumers in the market

• multiplying the equilibrium quantity sold by the number of producers in the market

• multiplying the quantities each producer sells by the market price

• summing the quantities each producer sells at each possible price

• summing the quantities each producer sells and multiplying by the market price

A 10 percent increase in the price of a good results in a 4 percent increase in total revenue. From this information, it can be concluded that the demand over this range of prices

• is upward sloping

• is inelastic

• has a price elasticity of demand equal to 2.5

• has increased by 14%

• has increased by 40%