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WorksheetsMicroeconomics Exam 21-22
Total questions: 29
Worksheet time: 15mins
What is a basic principle of the law of demand?
The higher the price, the more people will want the good.
Everyone has a limited income that they will spend.
When a good’s price is lower, people will buy more of it.
Services are of interest in the same way that goods are.
The price of movie tickets in a town has risen from $7 to $9. What is the most likely effect of the change in price?
The demand curve for movie tickets will move right.
The quantity demanded of movie tickets will increase.
The demand curve for movie tickets will move left.
The quantity demanded of movie tickets will decrease.
If the price of orange juice doubles, people will buy another type of juice. Why is this?
Orange juice has many compliment goods.
Orange juice has many substitute goods.
Orange juice is an inelastic good.
Orange juice is an inferior good.
When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?
Market supply price
equilibrium
excess demand
price floor
Which of the following is true about a shareholder in a corporation?
A shareholder may not share in the earnings of that corporation.
A shareholder may not transfer his share to another party without permission.
A shareholder is liable for any debts accumulated by that corporation.
A shareholder in a public corporation is limited liability part owner of that corporation.
Study the information in hr image and use it to answer the following question: Of the following, which situation would cause the shift of the supply curve from S1 to S2?
The government reduces subsidies to
wheat farmers.
Firms exit the wheat industry.
Drought reduces industry output by
25%.
New fertilizers increase wheat crop
growth and harvest.
Read the excerpt from a New York Times article “Justice Department Moves to Block Merger of AT&T and T-Mobile” and answer question below.
WASHINGTON – The Justice Department on Wednesday sued to block the proposed $39 billion merger between the cellphone giants AT&T and T-Mobile USA, arguing that keeping them separate would preserve competition in the wireless industry and even help save jobs of American workers.
In a lawsuit filed in Federal District Court here, the Justice Department argued that the proposed deal, which would join the nation’s second- and fourth-largest wireless phone carriers, would result in higher prices and give consumers fewer innovative products. The companies disputed those assertions…
Question: The above scenario is most closely associated with which of the following economic concepts?
Free Market Economies
Price Control
The government’s role in a market economy
Barriers to Entry
What happens to a market in equilibrium when there is a supply surplus?
Excess supply means that producers will make less
Quantity demanded will exceed quantity supplied, so the price will drop.
Quantity supplied will exceed quantity demanded, so the price will drop.
Under-supply means that the good will become very expensive.
The legal concept of limited liability is important in which of the following types of business organizations?
corporations
monopolies
partnerships
sole proprietorship
On which kinds of goods do governments generally place price ceilings?
those that are cheap but could become more expensive without the ceiling
those that are not necessary but have become customary
those that are essential and cheap
those that are essential but too expensive for some consumers
This question is about the supply of corn. Which of the following would cause the supply curve for corn to shift leftward ?
an increase in the price of farming equipment & supplies
a change in consumer tastes in favor of cornbread
an increase in consumer incomes
a decrease in the price of fertilizer
In response to rising car traffic, demand for bicycles has increased. The new equilibrium point will show
more bicycles sold, but at a higher price.
fewer bicycles sold, but at a higher price.
more bicycles sold, but at a lower price.
fewer bicycles sold, but at a higher price.
Which market can be described as firms selling similar but different products, with price leadership, and interdependence?
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
The Statler family is the single owner of Hi-Tech Computers. Its store sells computers to the general public. Ron Statler is the president and runs the company; his son Jason works in the store. Digital World, a national chain whose stock trades on the stock market, opened a new store near Hi-Tech Computers. To keep its customers, Hi-Tech reduced the prices on its computers. Sales tripled and Hi-Tech’s entire computer inventory sold out. In order to raise cash to buy more computers, Hi-Tech applied for a business loan using the family’s property assets for collateral. Digital World soon closed its store and moved its inventory to a larger Digital World store in another city.
Based on the scenario, which statement BEST describes the two companies?
Hi-Tech Computers is a partnership, and Digital World is a corporation.
Hi-Tech Computers is a sole proprietorship, and Digital World is a corporation.
Digital World is a partnership of investors, and Hi-Tech Computers is a family partnership.
Digital World is a sole proprietorship of entrepreneurs, and Hi-Tech Computers is incorporated.
According to the cartoon, when a legal minimum wage is established above the equilibrium wage in the labor market
there will be decreased unemployment and a demand for labor
the quantity of labor demanded by firms will increase
there will be increased unemployment rate and a surplus of available labor
employers will have an incentive to use more labor and less capital
Minimum wage is an example of
Price Ceiling
Price Floor
Price Subsidy
None of the answers are correct
Why do price ceilings create shortages?
The government set price is below the equilibrium, so quantity demanded is greater than the quantity supplied
The government set price is below the equilibrium, so quantity demanded is less than quantity supplied
The government set price is above the equilibrium, so quantity demanded is less than quantity supplied
The government set price is above the equilibrium price, so quantity demanded is greater than the quantity supplied
Firms in which market structure have the most market & pricing power?
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
Many firms selling similar but different products with some price control describes which market structure?
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
According to the Circular Flow Diagram, the flow of goods and services to consumers is illustrated by flow _____
4 to 2
8 to 6
2 to 5
6 to 1
The flow of rent, wage, and interest is illustrated by flow ____
4 to 2
8 to 6
2 to 5
6 to 1
The flow of the factors of production is illustrated by flow ____
4 to 2
8 to 6
5 to 7
2 to 5
The flow of revenue is illustrated by flow ____
1 to 3
8 to 6
5 to 7
2 to 5
Ash and Gary open up a sports training company. They pooled their capital together and share the liability and profits. This represents a/an
Sole Proprietorship
Partnership
Oligopoly
Corporation
Assuming the demand remains the same, and the supply for iPhones is reduced, what will happen to the equilibrium price of iPhones?
Equilibrium price will increase
Equilibrium price will decrease
Quantity demanded will decrease
Market clearing price will fall
The market for labor is the __________ market.
Factor
Product
Perfectly Competitive
Wage
The above cartoon depicts market forces setting the market clearing price for the good
The above cartoon depicts a price floor
The above cartoon depicts a perfectly competitive market
The above cartoon depicts a price ceiling
A recent headline reads: “New study reveals eating pizza ensures college graduation.” However, there has been a shortage of pizza ingredients resulting in significant price increase for sauce, cheese, and pepperoni!
In the market for pizza on college campuses and in college towns, what will happen to demand, supply, equilibrium price, and equilibrium quantity?
Increase Demand; No change in Supply; Increase in Price; Increase in Quantity
No change in Demand; Increase in Supply; Increase in Price; Decrease in Quantity
Increase in Demand; Decrease in Supply; Increase in Price; Decrease in Quantity
Decrease in Demand; Increase in Supply; Increase in Price; Unknown Change in Quantity
*There are many buyers and sellers
*All the products sold are identical
*The buyers of the product are very informed
*It is very easy to get into and out of the market
This list MOST LIKELY describes which kind of market structure?
oligopoly
monopoly
monopolistic competition
pure competition
