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WorksheetsMicroeconomics Unit Test Review 2
Total questions: 25
Worksheet time: 24mins
Name
Class
Date
1.
If the government decided to subsidize the production of bobble-head dolls
a)
the supply curve will shift to the left.
b)
the supply curve will shift to the right.
c)
the demand for bobble-heads will decrease.
d)
the demand for bobble-heads will equal the supply.
2.
Why is there no competition in a monopoly?
a)
There are no close substitutes.
b)
There are too many substitutes.
c)
Prices are set by the government.
d)
The government forbids competition.
3.
Which of these is TRUE of substitute products?
a)
An increased price for one will always result in an increased price for the other.
b)
An increased price for one will always result in an increased price for the other.
c)
A decrease in price for one will usually result in an increased demand for the other.
d)
A decrease in the price for one will usually result in a decrease in demand for the other.
4.
Which example BEST demonstrates the effect of artificial price controls on supply and demand?
a)
Both rent controls and minimum wage laws result in shortages.
b)
Both rent controls and minimum wage laws result in surpluses.
c)
Rent controls result in surpluses and minimum wage laws result in shortages.
d)
Rent controls result in shortages and minimum wage laws result in surpluses.
5.
VOCABULARY: Government payments to encourage or protect a certain type of economic activity.
a)
Subsidy
b)
Supply
c)
Price Ceiling
d)
Minimum Wage
6.
VOCABULARY: The lowest legal wage that can be paid to workers.
a)
Minimum Wage
b)
Price Ceiling
c)
Subsidy
d)
Price-Fixing
7.
VOCABULARY:The combination of desire, ability, and willingness to buy a product.
a)
Demand
b)
Supply
c)
Equilibrium Price
d)
Price Floor
8.
VOCABULARY: Market structure where only a few very large sellers dominate an industry.
a)
Monopoly
b)
Oligopoly
c)
Supply
d)
Demand
9.
VOCABULARY: The amount of any given commodity available for sale at a given time.
a)
Subsidy
b)
Demand
c)
Supply
d)
Price Floor
10.
VOCABULARY: The lowest legal price that can be paid for a good or service.
a)
Price Floor
b)
Price Ceiling
c)
Minimum Wage
d)
Subsidy
11.
VOCABULARY: A maximum legal price that can be charged for a product.
a)
Price Floor
b)
Price Ceiling
c)
Subsidy
d)
Minimum Wage
12.
VOCABULARY: Real or perceived differences between competing products in the same industry.
a)
Price-Fixing
b)
Supply
c)
Demand
d)
Product Differentiation
13.
By limiting the amount of diamonds in circulation, and over-advertising the message that diamonds are the best representation of one’s expression of love, the De Beers Diamond Co. was effectively manipulating what two factors of economics?
a)
Rise and Run
b)
Risk and Reward
c)
Surplus and Shortage
d)
Supply and Demand
14.
When too many watermelons are harvested, a market might be said to have a ‘surplus’, because more watermelons are produced then are demanded. What is likely to happen to the price of watermelons under these conditions?
a)
The price would fall
b)
The price would stay the same
c)
The price would rise
d)
None of the Above
15.
Which of the following market structures is characterized by 1) a large number of buyers and sellers who exchange identical products, 2) the number of sellers is so large that no single seller is large enough to affect the price of their goods, and 3) the market is generally easy to enter or leave?
a)
Perfect Competition
b)
Monopolistic Competition
c)
Oligopoly
d)
Monopoly
16.
Which of the following reasons best suggests why Oligopolies tend to happen in Aircraft and Automobile manufacturing industries?
a)
Laws state that only a certain amount of manufacturers are allowed
b)
House prices in Detroit are too low for more people to move there
c)
Entering those industries is very expensive and requires engineering expertise
d)
New companies must pay a fee to enter into those industries
17.
Why are some Monopolies allowed to exist in our society?
a)
Geography: it may be the only business in a given area
b)
Government: only the government provides certain services
c)
Utilities: sometimes only 1 company owns the utilities in an area
d)
All of the Above
18.
A change in quantity demanded is shown
a)
at various points on the demand curve
b)
with a new demand curve drawn above or below the original demand curve
c)
with a vertical line
19.
Which of the following is the definition for sole proprietorship
a)
business investment that involves renting or leasing another successful business model
b)
unincorporated business owned and run by a single person who has rights to all profits and unlimited liability for all debts of the firm; most common form of business organization in the United States
c)
unincorporated business owned and operated by two or more people who share the profits and have unlimited liability for the debts and obligations of the firm
d)
form of business organization recognized by law as a separate legal entity with all the rights and responsibilities of an individual, including the right to buy and sell property, enter into legal contracts, and to sue and be sued
20.
Which type of business organization has the advantage of limited liability but the disadvantage of less control over business decisions?
a)
perfect competition
b)
partnership
c)
sole proprietorship
d)
corporation
21.
Which of the following is a disadvantage of a corporation?
a)
it is easy to raise financial capital using stocks, bonds, or loans.
b)
the double taxation of corporate profits. Profits are taxed the first time when the corporation pays income taxes. The profits are taxed a second time when shareholders pay taxes on their dividends.
c)
it is easy to get a charter to start a corporation.
d)
Owners and shareholders have total control over what happens with the business.
22.
In what type of business organization is each owner personally liable for all business debts, even if the debts were created by other owners?
a)
corporation
b)
partnership
c)
proprietorship
d)
S corporation
23.
How is a general partnership organized?
a)
Every partner shares equally in both responsibility and liability
b)
The doctors, lawyers, or accountants who form a general partnership hire others to run the partnership
c)
No partner is responsible for the debts of the partnership beyond his or her investment
d)
Only one partner is responsible for the debts of the partnership
24.
Partners who are only responsible up to the extent of their investment
a)
limited partnership
b)
trading partnership
c)
non-trading partnership
d)
special partnership
25.
Shortest lifespan
a)
Sole Proprietorship
b)
Partnership
c)
Corporation
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