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WorksheetsIntroduction of Microeconomic
Total questions: 18
Worksheet time: 14mins
A marginal change is one that
is not important for public policy.
incrementally alters an existing plan.
makes an outcome inefficient.
does not influence incentives.
Governments may intervene in a market economy in
order to
correct a market failure due to externalities.
protect property rights.
achieve a more equal distribution of income.
No one above
If a nation has high and persistent inflation, the mostlikely explanation is....
the central bank creating excessive amounts of
money.
unions bargaining for excessively high wages.
the government imposing excessive levels of taxation.
firms using their monopoly power to enforce exces-sive price hikes.
You win $250 in a basketball pool. You have a choice
between spending the money now and putting it
away for a year in a bank account that pays 6 percent
interest. What is the opportunity cost of spending the
$250 now?
(a)
A point inside the production possibilities frontier is
efficient but not feasible.
feasible but not efficient.
both efficient and feasible.
neither efficient nor feasible.
Which of the following is a positive, rather than a normative, statement?
Law X will reduce national income.
Law X is a good piece of legislation.
Congress ought to pass law X.
The president should veto law X.
A change in which of the following will NOT shift the
demand curve for hamburgers?
the price of hot dogs
the price of hamburgers
the price of hamburger buns
the income of hamburger consumers
Movie tickets and film streaming services are
substitutes. If the price of film streaming increases,
what happens in the market for movie tickets?
The supply curve shifts to the left.
The supply curve shifts to the right.
The demand curve shifts to the left.
The demand curve shifts to the right.
If the economy goes into a recession and
incomes fall, what happens in the markets for
inferior goods?
Prices and quantities both rise.
Prices and quantities both fall.
Prices rise and quantities fall.
Prices fall and quantities rise.
The discovery of a large new reserve of crude oil will
shift the ________ curve for gasoline, leading to a
________ equilibrium price.
(a)
A life-saving medicine without any close substitutes
will tend to have...
a small elasticity of demand.
a large elasticity of demand.
a small elasticity of supply.
a large elasticity of supply.
The ability of firms to enter and exit a market over
time means that, in the long run,...
the demand curve is more elastic.
the demand curve is less elastic.
the supply curve is more elastic.
the supply curve is less elastic.
An increase in the price of a good will decrease the total revenue producers receive if (a)
The price of a good rises from $8 to $12, and the
quantity demanded falls from 110 to 90 units.
Calculated with the midpoint method, the price
elasticity of demand is...
(a)
In a market with a binding price ceiling, an increase
in the ceiling will ________ the quantity supplied,
________ the quantity demanded, and reduce the
________.
increase, decrease, surplus
decrease, increase, surplus
increase, decrease, shortage
decrease, increase, shortage
Which of the following would increase quantity
supplied, increase quantity demanded, and decrease
the price that consumers pay?
the imposition of a binding price floor
the removal of a binding price floor
the passage of a tax levied on producers
the repeal of a tax levied on producers
Jen values her time at $60 an hour. She spends
2 hours giving Colleen a massage. Colleen was
willing to pay as much at $300 for the massage, but
they negotiate a price of $200. In this transaction
consumer surplus is $20 larger than producer
surplus.
consumer surplus is $40 larger than producer
surplus.
producer surplus is $20 larger than consumer
surplus.
producer surplus is $40 larger than consumer
surplus.
An efficient allocation of resources maximizes
consumer surplus.
producer surplus.
consumer surplus plus producer surplus.
consumer surplus minus producer surplus.
