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WorksheetsAP Microeconomics Review
Total questions: 12
Worksheet time: 12mins
With respect to the circular flow model, businesses provide households with which of the following?
taxes and interest
labor and taxes
goods, services, and incomes
public goods and transfer payments
A volcano erupts in Hawaii that destroys or damages many of the orchards that supply the U.S. with pineapples. What will be the effect on price and quantity of pineapples sold, assuming all else is equal?
Price will rise and quantity will also rise.
Price will drop and quantity will also drop.
Price will drop but quantity will rise.
Price will rise but quantity will drop.
A market that has few barriers to entry, in which products that are not of identical quality and style are sold, and, therefore, firms can make greater-than-normal profits for short periods of time, is BEST described as
monopolistic.
oligopolistic.
perfectly competitive.
monopolistically competitive
A breakthrough in nanotechnology allows silicon chips for computers to be produced much more quickly and cheaply. If demand for computers remains unchanged, what will be the effect upon market price and supply?
Both price and supply will rise.
Both price and supply will fall.
The supply will rise while the price falls.
The supply will fall while the price rises.
All of the following are characteristics of perfectly competitive markets EXCEPT
the firm's prices are kept confidential.
production is similar in quality.
there is a large number of buyers and sellers.
there are few barriers to entering the market.
A minimum price consumers are required to pay for a good or service.
Price Ceiling
Market Clearing Price
Equilibrium
Price Floor
A maximum price consumers are required to pay for a good or service.
Price Ceiling
Equilibrium
Market Clearing Price
Price Floor
According to the Profit Maximizing Formula, how many units should this firm produce?
2
3
4
5
Does an increase in Variable Costs affect a firm's output?
Yes
No
Maybe
Which of the following best explains why firms experience Increasing Marginal Returns?
Workers can specialize
Workers reach the limit of fixed resources
Managers motivate workers to produce more
Poor management leads to low motivation
