WorksheetsUnit 3 - Microeconomics
Total questions: 39
Worksheet time: 38mins
Name
Class
Date
1.
For most products and services, increased price results in
a)
demand for fewer products.
b)
demand for more products
c)
reduced demand for substitutes
d)
increased demand for complements
2.
An increase in the price of milk causes a decrease in the demand for cereal. The two products are
a)
substitutes
b)
complements
c)
unrelated
d)
demand elastic
3.
Advertising, fashion trends, and new product introductions serve to
a)
create consumer needs
b)
increase income effectiveness
c)
create consumer demand
d)
minimize the income effect
4.
Because a modest price increase has little or no effect, the demand for the product is
a)
complementary
b)
inelastic
c)
elastic
d)
unit elastic
5.
A business doubled the price of a product in order to increase profits. Which of the following scenarios might have occurred?
a)
A sharp increase in revenues demonstrated the elasticity of the product.
b)
A small increase in revenues demonstrated the unit elasticity of the product.
c)
A dramatic decline in revenues demonstrated the elasticity of the product.
d)
A dramatic decline in revenues demonstrated the inelasticity of the product.
6.
A demand schedule shows
a)
an upward-sloping curve that illustrates the positive relationship between price and quantity demanded.
b)
a listing of the various quantities demanded of a particular product at all prices that might prevail in the market.
c)
the fluctuations in demand that occurred over a specified period of time.
d)
the fluctuations in demand scheduled to occur over the following year.
7.
Consumers' willingness to replace a costly item with a less costly item is an example of
a)
the substitution effect
b)
the income effect
c)
demand elasticity
d)
law of diminishing marginal utility
8.
An increase in the price of cameras results in a decrease in the demand for film. The two products are
a)
substitutes
b)
demand elastic
c)
unrelated
d)
complements
9.
When a customer's need for a product is not urgent, demand tends to be
a)
inelastic
b)
elastic
c)
complementary
d)
unit elastic
10.
When a manufacturer of pain medication reduced the price of the medication by 30%, profits declined by almost exactly 30%. Demand for the product is
a)
inelastic
b)
elastic
c)
unit elastic
d)
complementary
11.
According to this demand curve, how many movie videos will be demanded at a price of $10?
a)
400
b)
600
c)
800
d)
1000
12.
According to this demand curve, if the price of movie videos increases from $14 to $16, the quantity demanded will
a)
fall from 600 to 400
b)
rise from 400 to 600
c)
fall from 400 to 200
d)
rise from 200 to 400
13.
Which of the following choices could cause the movement shown in the graph?
a)
a decrease in income
b)
an increase in the number of consumers
c)
a decrease in the price of a substitute
d)
an increase in the price of a complement
14.
The movement shown in this graph represents a change in what?
a)
quantity demanded
b)
marginal utility
c)
demand
d)
demand elasticity
15.
Based on this graph, how many Beanie Babies™ were demanded at a price of $6 before they became a fad?
a)
100
b)
200
c)
300
d)
400
16.
The movement in the graph shows that the quantity demanded of butter decreased because the
a)
price of butter increased
b)
the price of margarine decreased
c)
price of butter decreased
d)
the price of margarine increased
17.
What does the movement shown on this graph represent?
a)
a
change in demand
b)
the income effect
the inverse relationship between price and quantity demanded
the inverse relationship between price and quantity demanded
c)
the inverse relationship between price and marginal utility
d)
diminishing marginal utility
18.
Find the price of $15 on the demand schedule. What point does this price and quantity correspond to in the graph?
a)
V
b)
W
c)
X
d)
Y
19.
All of the following can change the market supply curve EXCEPT
a)
the number of sellers
b)
the expectation that prices are about to increase
c)
a change in the demand for a product
d)
the number of sellers offering the product
20.
The supply of a product normally decreases if
a)
the cost of inputs goes down
b)
more producers enter the market.
c)
the price of the product increases.
d)
taxes on the product increase.
21.
Total cost is the sum of the
a)
fixed costs and overhead
b)
all variable costs
c)
fixed and variable costs
d)
fixed and marginal costs
22.
Which products shown in the table are likely to have elastic demand?
a)
gasoline in general, services of medical doctors
b)
fresh tomatoes, gasoline from a particular station, butter
c)
fresh tomatoes, gasoline in general, butter
d)
gasoline from a particular station, gasoline in general, butter
23.
Which products shown in the table are likely to have inelastic demand?
a)
gasoline in general, services of medical doctors
b)
fresh tomatoes, gasoline from a particular station, butter
c)
fresh
tomatoes, gasoline in general, butter
d)
gasoline from a particular station, gasoline in general, butter
24.
Based on the graph, how does the market demand for concert tickets change if the price increases from $30 to $40?
a)
the demand curve shifts to the right
b)
the demand curve shifts to the left
c)
quantity demanded decreased by 4,000
d)
quantity demanded increased by 4,000
25.
Rent payments and property taxes would be counted as
a)
total cost
b)
variable costs
c)
fixed costs
d)
marginal costs
26.
The level of profit-maximizing output is reached when marginal cost is
a)
double marginal revenue
b)
one-half of marginal revenue
c)
less than marginal revenue
d)
equal to marginal revenue
27.
When producers offer fewer products for sale at each and every price,
a)
the supply curve has shifted to the right
b)
the supply curve has shifted to the left
c)
the price per unit decreases
d)
they expect subsidies
28.
The theory of production deals with the relationship between the factors of production and
a)
the cost of new materials
b)
the cost of marginal returns
c)
fixed costs
d)
the output of goods and services
29.
Many businesses are engaging in e-commerce because
a)
subsidies
are available to many e-commerce businesses.
b)
they are able to save on fixed and variable costs.
c)
operating costs never increase.
d)
variable costs can be almost eliminated.
30.
Profits will be maximized when marginal revenue
a)
is double marginal cost
b)
equals marginal cost
c)
is one-half marginal cost
d)
exceeds marginal cost
31.
Which of the following is NOT a reason why prices effectively perform the allocation function?
a)
Competitive markets find their own prices without interference.
b)
Prices favor neither the producer nor the consumer.
c)
Prices remain surprisingly stable despite unexpected events.
d)
Prices
are easily understood.
32.
In a market economy, a high price is a signal for
a)
producers to supply more and consumers to buy less.
b)
producers to supply less and consumers to buy more.
c)
government to intervene to protect consumers.
d)
producers to supply less and consumers to buy less.
33.
The federal minimum wage law demonstrates
a)
a price ceiling
b)
a price floor
c)
a price equilibrium
d)
a market price
34.
According to this supply curve, 400 movie videos will be supplied at what price?
a)
$10
b)
$12
c)
$14
d)
$16
35.
According to this supply curve, if the price of movie videos decreases from $18 to $16, the quantity supplied will
a)
rise from 800 to 1000
b)
fall from 1000 to 800
c)
rise from 600 to 800
d)
fall from 800 to 600
36.
Which of the following choices could cause the movement shown in the graph?
a)
technology improves production
b)
inputs become cheaper
c)
the number of firms increases
d)
taxes increase
37.
The movement shown in this graph represents a change in what?
a)
supply
b)
quantity supplied
c)
supply elasticity
d)
production function
38.
Which of the following choices could cause the movement shown in this graph?
a)
inputs become more expensive
b)
the number of firms decreases
c)
technology improves production
d)
taxes increase
39.
What does the movement shown on this graph represent?
a)
a change in supply
b)
a change in quantity supplied
c)
the law of diminishing returns
d)
a shift in the market supply curve
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