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WorksheetsMid Test Micro Economic
Total questions: 86
Worksheet time: 2hrs 47mins
The term ceteris paribus means ________.
A) when other things all change
B) equal access to public transportation
C) other things being equal
D) for better or worse
The task of economic science is to ________.
A) tell us what is good for us
B) help us understand how the economic world works
C) make moral choices about things like drugs
D) save the earth from the overuse of natural resources
The statement that ________ is a positive statement.
A) the price of gasoline is too high
B) too many people in the United States have no health care insurance
C) the price of sugar in the United States is higher than the price in Australia
D) more students should study economics
Which of the following is NOT a factor of production?
A) the water used to cool a nuclear power plant.
B) the wages paid to workers.
C) the effort of farmers raising cattle.
D) the management skill of a small business owner.
The fact that people with higher incomes get to consume more goods and services addresses
the ________ question.
A) "how"
B) "where"
C) "for whom"
D) "when"
Which of the following is a macroeconomic topic?
A) why plumbers earn more than janitors
B) the reasons for the rise in average prices
C) whether the army should buy more tanks or more rockets
D) the reasons for a rise in the price of orange juice
Which of the following is a microeconomic topic?
A) the reasons for a decline in average prices
B) the reasons why Kathy buys less orange juice
C) the cause of why total employment may decrease
D) the effect of the government budget deficit on inflation
Which is the most accurate definition of the study of economics? Economics is the study of
A) the distribution of surplus goods to those in need.
B) affluence in a morally bankrupt world.
C) ways to reduce wants to eliminate the problem of scarcity.
D) the choices we make because of scarcity.
As an economic concept, scarcity applies to
A) neither time nor money.
B) both money and time.
C) time but not money.
D) money but not time.
In broad terms the difference between microeconomics and macroeconomics is that
A) microeconomics studies the effects of government taxes on the national unemployment
rate.
B) macroeconomics studies the effects of government regulation and taxes on the price of
individual goods and services whereas microeconomics does not.
C) they use different sets of tools and ideas.
D) microeconomics studies decisions of individual people and firms and macroeconomics
studies the entire national economy.
From 8 p.m. to 10 p.m., Susan can attend a movie, study, or talk with friends. Suppose that
Susan decides to go to the movie but thinks that, if she hadn't, she would otherwise have talked
with friends. The opportunity cost of attending the movie is
A) two hours of time.
B) studying.
C) talking with friends and studying.
D) talking with friends.
Wages for workers producing Walkmans and similar products will rise next year. Walkman Watch
asks you to predict the effect of this change in next year's market for Walkmans. You predict that
the major effect will be that the
A) demand curve for a Walkman will shift leftward.
B) supply curve for a Walkman will shift rightward.
C) supply curve for a Walkman will shift leftward.
D) demand curve for a Walkman will shift rightward.
In the figure above, which movement reflects an increase in demand?
A) from point a to point e
B) from point a to point c
C) from point a to point b
D) from point a to point d
In the figure above, which movement reflects a decrease in demand?
A) from point a to point d
B) from point a to point e
C) from point a to point c
D) from point a to point b
In the figure above, which movement reflects a decrease in quantity demanded but NOT a
decrease in demand?
A) from point a to point c
B) from point a to point e
C) from point a to point d
D) from point a to point b
In the figure above, which movement reflects how consumers would react to an increase in the
price of a non-fruit snack?
A) from point a to point b
B) from point a to point d
C) from point a to point c
D) from point a to point e
The most fundamental economic problem is
A) security.
B) the fact the United States buys more goods from foreigners than we sell to foreigners.
C) health.
D) scarcity.
Scarcity requires that people must
A) trade.
B) compete.
C) cooperate.
D) make choices.
The question "Should movies or compact discs be produced?" is an example of the
A) "how" question.
B) "who" question.
C) "where" question.
D) "what" question.
Because we face scarcity, every choice involves
A) the question "what."
B) money
C) giving up something for nothing.
D) an opportunity cost
The term used to emphasize that making choices in the face of scarcity involves a cost is
A) utility cost.
B) opportunity cost.
C) accounting cost.
D) substitution cost.
The loss of the highest-valued alternative defines the concept of
A) entrepreneurship.
B) scarcity.
C) marginal benefit.
D) opportunity cost.
Opportunity cost means
A) the accounting cost minus the marginal benefit.
B) the highest-valued alternative forgone.
C) the monetary costs of an activity.
D) the accounting cost minus the marginal cost.
In the figure above, which movement reflects an increase in the price of a substitute for fruit
snacks?
A) from point a to point d
B) from point a to point e
C) from point a to point b
D) from point a to point c
In the figure above, which movement reflects an increase in the price of a complement for fruit
snacks?
A) from point a to point b
B) from point a to point d
C) from point a to point e
D) from point a to point c
In the figure above, which movement reflects how consumers would react to an increase in the
price of a fruit snack that is expected to occur in the future?
A) from point a to point b
B) from point a to point e
C) from point a to point c
D) from point a to point d
In the figure above, which movement reflects an increase in income if fruit snacks are an inferior
good?
A) from point a to point d
B) from point a to point c
C) from point a to point b
D) from point a to point e
A fall in the price of lemons from $10.50 to $9.50 per bushel increases the quantity demanded from
19,200 to 20,800 bushels. The price elasticity of demand is
A) 1.25.
B) 1.20.
C) 8.00.
D) 0.80.
The elasticity of demand along the demand curve shown in the above figure is constant and equal
to 1. Thus,
A) area 0BCF equals area 0AGF.
B) area 0BCF equals area 0ADE.
C) area 0BCF equals area FGDE.
D) area ABCG equals area 0AGF.
The figure above illustrates a linear demand curve. By comparing the price elasticity in the $2 to $4
price range with the elasticity in the $8 to $10 range, you can conclude that the elasticity is
A) the same in both price ranges.
B) greater in the $8 to $10 range when the price rises but greater in the $2 to $4 range when the
price falls.
C) greater in the $8 to $10 range.
D) greater in the $2 to $4 range.
The figure above illustrates a linear demand curve. If the price falls from $8 to $6,
A) the quantity demanded will increase by less than 20 percent.
B) total revenue will remain unchanged.
C) total revenue will increase.
D) total revenue will decrease.
The figure above illustrates a linear demand curve. In the range from $8 to $6,
A) the demand is unit elastic.
B) the demand is price inelastic.
C) the demand is price elastic.
D) more information is needed to determine if the demand is price elastic, unit elastic, or
inelastic.
A fall in the price of cabbage from $10.50 to $9.50 per bushel increases the quantity demanded from
18,800 to 21,200 bushels. The price elasticity of demand is
A) 1.20.
B) 0.80.
C) 8.00.
D) 1.25.
The above figure shows a linear (straight-line) deman
A) increases.
B) increases and then decreases.
C) decreases and then increases.
D) decreases.
The figure above illustrates a linear demand curve. If the price falls from $6 to $4,
A) total revenue will decrease.
B) total revenue will increase.
C) quantity demanded will increase by more than 100 percent.
D) total revenue will remain unchanged.
Suppose that the quantity of root beer demanded declines from 103,000 gallons per week to 97,000
gallons per week as a consequence of a 10 percent increase in the price of root beer. The price
elasticity of demand is
A) 1.66.
B) 6.00.
C) 0.60.
D) 1.40.
The figure above illustrates a linear demand curve. In the price range from $8 to $6, demand is
________ and in the price range $4 to $2, demand is ________.
A) elastic; inelastic
B) inelastic; inelastic
C) elastic; elastic
D) inelastic; elastic
The figure above illustrates a linear demand curve. If the price rises from $6 to $8 demand is
________ and if the price falls from $8 to $6 demand is ________.
A) inelastic; inelastic
B) elastic; inelastic
C) elastic; elastic
D) inelastic; elastic
The price elasticity of demand is 5.0 if a 10 percent increase in the price results in a ________
decrease in the quantity demanded.
A) 10 percent
B) 50 percent
C) 2 percent
D) 5 percent
A cost that has already been made and cannot be recovered is called a
A) marginal cost.
B) fixed cost.
C) variable cost.
D) sunk cost.
At point e in the above figure, the marginal product of labor definitely
A) is at its maximum.
B) is less than the average product of labor.
C) equals the average product of labor.
D) is greater than the average product of labor.
In the figure above,
A) f is an efficient point.
B) g is an efficient point.
C) d is an efficient point.
D) there are no efficient points.
In the above figure, the most efficient way to produce 15 units is to hire
A) 5 workers.
B) 3 workers.
C) 4 workers.
D) 2 worker.
In the figure above, the marginal product of the second worker is
A) 10 units.
B) 2 units.
C) 5 units.
D) 1 units.
The long run is a time frame in which
A) the quantities of all resources are fixed.
B) the quantities of all resources can be varied.
C) the quantities of some resources are fixed and the quantities of other resources can be varied.
D) all costs are sunk costs.
The marginal product of labor is the increase in total product from a
A) one dollar increase in the wage rate, while holding the price of capital constant.
B) one unit increase in the quantity of labor, while also increasing the quantity of capital by one
unit.
C) one unit increase in the quantity of labor, while holding the quantity of capital constant.
D) one percent increase in the wage rate, while also increasing the price of capital by one percent.
The marginal product of labor is the change in total product from a one-unit increase in
A) the wage rate.
B) both the quantity of labor and the quantity of capital employed.
C) the quantity of labor employed, holding the quantity of capital constant.
the quantity of capital employed, holding the quantity of labor constant.
The above figure represents the market for french fries at fast food joints. If the price of potatoes
rises and simultaneously people become concerned that french fries can cause heart attacks
A) the demand curve for french fries will shift from D2 to D1 and the supply curve of french fries
will shift from S2 to S1.
B) the demand curve for french fries will shift from D2 to D1 and the supply curve of french fries
will not shift.
C) the demand curve for french fries will not shift, and the supply curve of french fries will shift
from S1 to S2.
D) the demand curve for french fries will shift from D2 to D1 and the supply curve of french fries
will shift from S1 to S2.
The figure above represents the market for candy. People become more concerned that eating
candy causes them to gain weight, which they do not like. As a result, the
A) demand curve will not shift, and the supply curve shifts from S1 to S2.
B) demand curve shifts from D1 to D2and the supply curve shifts from S1 to S2.
C) demand curve shifts from D2 to D1 and the supply curve shifts from S2 to S1.
D) demand curve shifts from D2 to D1 and the supply curve will not shift.
In the above figure, after the second worker is hired, the marginal product of labor is
A) constant.
B) increasing.
C) zero.
D) diminishing.
At point d in the above figure, the average product of labor equals
A) approximately 1.
B) 3.75.
C) 15.
D) 4.
In the above figure, the average product of labor at point c is
A) 5.
B) 2.
C) 10.
D) None of the above answers are correct.
The above figure represents the market for oil. Because of the development of a new deep sea
drilling technology the
A) demand curve shifts from D1 to D2 and the supply curve shifts from S1 to S2.
B) demand curve shifts from D1 to D2 and the supply curve will not shift.
C) demand curve will not shift, and the supply curve shifts from S1 to S2.
D) demand curve will not shift, and the supply curve shifts from S2 to S1.
The above figure represents the market for oil. When terrorists blow up a major refinery the
A) demand curve for oil will not shift, and the supply curve for oil shifts from S2 to S1.
B) demand curve for oil shifts from D1 to D2 and the supply curve for oil will not shift.
C) demand curve for oil shifts from D1 to D2 and the supply curve for oil shifts from S2 to S1.
D) demand curve for oil will not shift, and the supply curve for oil shifts from S1 to S2.
The above figure represents the market for bicycles. When there is a physical fitness craze the
A) demand curve for bicycles shifts from D1 to D2.
B) demand curve for bicycles shifts from D2 to D1.
C) supply curve of bicycles shifts from S1 to S2.
D) demand curve and the supply curve of bicycles do not shift.
In the above figure, an inefficient point is
A) a.
B) f.
C) g.
D) e.
In the above figure, an unattainable point is
A) a.
B) e.
C) f.
D) g.
In the above figure, the most efficient way to produce 10 units is to hire
A) 1 worker.
B) 5 workers.
C) 2 workers.
D) 3 workers.
In the above table, the average fixed cost of producing 15 units of output is
A) $6.66.
B) $0.50.
C) $2.00.
D) $8.66.
In the above figure, which of the following statements is FALSE?
A) Average fixed cost decreases as output decreases.
B) The vertical gap between curves B and C equals marginal fixed cost.
C) Curve A is the marginal cost curve.
D) The vertical gap between curves B and C gets smaller as AFC decreases.
In the above figure, which of the following statements is FALSE?
A) The total fixed cost curve is curve C.
B) Total variable cost and total cost both increase as output increases.
C) The vertical gap between curves A and B is equal to average fixed cost.
D) Marginal cost is equal to the slope of curve A.
In the above table, the total fixed cost is
A) $30.
B) $50.
C) $20.
D) $0.
In the above table, the total fixed cost at 3 units of output is
A) $30.
B) $60.
C) $90.
D) $0.
In the above table, when output increases from 8 to 12 units, the marginal cost of one of those 4
units is
A) $1.20.
B) $15.00.
C) $5.00.
D) $2.00.
Using the data in the above table, the average fixed cost of producing 16 units is
A) $1.54 a unit.
B) $2.22 a unit.
C) $1.11 a unit.
D) $1.25 a unit.
Using the data in the above table, when the firm increases its output from 4 to 9 units, the marginal
cost of a unit is
A) $5.00 a unit.
B) $7.00 a unit.
C) $4.00 a unit.
D) $6.00 a unit.
In the above table, the average variable cost of producing 14 units of output is
A) $0.175.
B) $7.86.
C) $5.71.
D) $10.00.
In the above table, the average total cost of producing 14 units of output is
A) $5.71.
B) $7.00.
C) $7.86.
D) $6.75.
In the above figure, the marginal cost curve is curve
A) A.
B) B.
C) C.
D) D.
A firm's average variable cost is $60, its total fixed cost is $3,000, and its output is 600 units. Its
average total cost is
A) more than $64.
B) between $58 and $62.
C) between $62 and $64.
D) less than $58.
A firm's average variable cost is $90, its total fixed cost is $10,000, and its output is 1,000 units. Its
total cost is
A) more than $105,00
B) less than $85,000.
C) between $95,000 and $105,000.
D) between $85,000 and $95,000.
A firm's average total cost is $80, its fixed cost is $1000, and its output is 100 units. Its average
variable cost
A) is between $40 and $60.
B) is more than $60.
C) is less than $40.
D) cannot be determined without more information.
A firm's marginal cost is $30, its average total cost is $50, and its output is 800 units. Its total cost of
producing 801 units is
A) between $40,050 and $40,080.
B) greater than $40,080.
C) less than $40,000.
D) between $40,000 and $40,050.
A firm's marginal cost is $82, its average total cost is $50, and its output is 800 units. Its total cost of
producing 801 units is
A) greater than $40,080.
B) between $40,050 and $40,080.
C) less than $40,000.
D) between $40,000 and $40,050.
A firm's output is 80 units, its marginal cost is $42, its average variable cost is also $42, and its
average fixed cost is $10. The slope of its average fixed cost curve is
A) positive but the precise slope cannot be calculated.
B) positive and the slope is between 0 and 1.50.
C) negative.
D) not able to be calculated without more information
Demand is income elastic if
A) an increase in income will not affect the quantity demanded.
B) a small percentage increase in income will result in a large percentage increase in quantity
demanded.
C) the good in question has close substitutes.
D) a large percentage increase in income will result in a small percentage increase in quantity
demanded.
The income elasticity of demand is high for
A) shelter.
B) luxuries.
C) clothing.
D) food
To say that turnips are inferior goods means that the income elasticity
A) is definitely greater than 1.
B) is negative.
C) is positive but could be greater than or less then (or equal to) 1.
D) is definitely between 0 and 1.
An increase in Abigail's income decreases her demand for cassette tapes. For her, cassette tapes are
A) a complement to any good.
B) a normal good.
C) an inferior good.
D) a substitute good.
Goods whose income elasticities are negative are called
A) superior goods.
B) inferior goods.
C) normal goods.
D) complements
A 10 percent increase in income has caused a 5 percent decrease in the quantity demanded. The
income elasticity is
A) 0.5.
B) -2.0.
C) 2.0.
D) -0.5.
Deb's income has just risen from $950 per week to $1,050 per week. As a result, she decides to
increase the number of movies she attends each month by 5 percent. Her demand for movies is
A) income inelastic.
B) income elastic.
C) represented by a vertical line.
D) represented by a horizontal line.
Fred's income has just risen from $940 per week to $1,060 per week. As a result, he decides to
purchase 9 percent more steak per week. The income elasticity of Fred's demand for steak is
A) 0.75.
B) 1.33.
C) 0.90.
D) 1.00.
Joan's income has just risen from $940 per week to $1,060 per week. As a result, she decides to
purchase 12 percent more lettuce per week. The income elasticity of Joan's demand for lettuce is
A) 1.33.
B) 0.90.
C) 1.00.
D) 0.75.
During the summer you have made the decision to attend summer school, which precludes
you from working at your usual summer job in which you normally earn $6,000 for the
summer. Your tuition cost is $3,000, books and supplies cost $300, and room and board cost
$1,000. The opportunity cost of attending summer school is
A) $3,300.
B) $4,300.
C) $6,000.
D) $10,300.
On Saturday morning, you rank your choices for activities in the following order: go to the
library, work out at the gym, have breakfast with friends, and sleep late. Suppose you decide to
go to the library. Your opportunity cost is
A) working out at the gym, having breakfast with friends, and sleeping late
B) zero because you do not have to pay money to use the library.
C) working out at the gym.
D) not clear because not enough information is given.
