WorksheetsMicroeconomics 2
Total questions: 12
Worksheet time: 9mins
Microeconomics is the branch of economics that deals with which of the following topics?
The behavior of individual consumers
Unemployment and interest rates
The behavior of individual firms and investors
B and C
A and C
A Rolling Stones song goes: ʺYou canʹt always get what you want.ʺ This echoes an important
theme from microeconomics. Which of the following statements is the best example of this
theme?
Consumers must make the best purchasing decisions they can, given their limited incomes.
Workers do not have as much leisure as they would like, given their wages and working
conditions.
Workers in planned economies, such as North Korea, do not have much choice over jobs
Firms in market economies have limited financial resources.
Economics is about the allocation of scarce resources. Which of the following is NOT an
example of economic scarcity?
If Steve goes to see the movie Master and Commander on Saturday, he will not be able to afford buying ice cream.
If Jenny studies for her economics quiz this evening, she will not have time to walk her dog.
If General Motors increases its production of SUVs this year, it will have to spend more on advertising.
If Borders Books increases the number of titles it carries, it will have to reallocate shelf space to accommodate the new titles.
Which of the following is a positive statement?
The President of the United States ought to be elected by a direct vote of the American people rather than the Electoral College.
A fundamental assumption of the economic theory of consumer behavior is that consumers always prefer having more of any good to having less of it.
Because many adults cannot afford to go to college, tax credits for tuition should be introduced.
all of the above
none of the above
Which of the following is a normative statement?
The taxes paid by the poor should be reduced in order to improve the income distribution in the U.S.
State governments should not subsidize corporations by training welfare recipients.
Presidential candidates should not be given funds from the federal government to run campaigns.
The sea otter should not be allowed to spread into Southern California coastal waters, because it will reduce the value of fisheries
all of the above
The trade-offs facing consumers include:
how to allocate income across goods and serves.
how to allocate income between consumption and savings
both A and B
none of the above
Which of the following is NOT an application of supply and demand analysis?
Understanding changing world economic conditions and their effects on prices
Evaluating the effects of government price controls on the agricultural industry
Determining how taxes affect aggregate consumption spending patterns
all of the above
none of the above
A supply curve reveals:
the quantity of output consumers are willing to purchase at each possible market price.
the difference between quantity demanded and quantity supplied at each price.
the maximum level of output an industry can produce, regardless of price.
the quantity of output that producers are willing to produce and sell at each possible market price.
Plastic and steel are substitutes in the production of body panels for certain automobiles. If the price of plastic increases, with other things remaining the same, we would expect:
the price of steel to fall.
the demand curve for steel to shift to the right.
the demand curve for plastic to shift to the left.
nothing to happen to steel because it is only a substitute for plastic.
the demand curve for steel to shift to the left.
Which of the following would shift the demand curve for new textbooks to the right?
A fall in the price of paper used in publishing texts
A fall in the price of equivalent used textbooks
An increase in the number of students attending college
A fall in the price of new textbooks.
When an industryʹs raw material costs increase, other things remaining the same,
the supply curve shifts to the left.
the supply curve shifts to the right.
output increases regardless of the market price and the supply curve shifts upward.
output decreases and the market price also decreases.
Which of the following events will cause a leftward shift in the supply curve of gasoline?
A decrease in the price of gasoline
An increase in the wage rate of refinery workers
Decrease in the price of crude oil
An improvement in oil refining technology
all of the above
