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Microeconomics

Total questions: 10

Worksheet time: 10mins

Name
Class
Date
1.

The problem of unlimited desires and limited resources is the problem of

a)

wants

b)

marginal benefit

c)

scarcity

d)

free enterprise

2.

When economists look at supply and demand schedules and/or supply and demand curves, what are the only two variables examined?

a)

Price and Demand

b)

Price and Supply

c)

Price and Quantity

d)

Price and Equilibrium Point

3.
What does a production possibility curve show?
a)
The prices of two types of products being produced
b)
The quantity of capital and consumer goods that people would like to be produced
c)
The maximum combination of two types of goods that can be produced with given resources.
d)
The relative profitability of capital and consumer goods 
4.

This graph demonstrates

a)

A shift in the Supply Curve

b)

A higher market price after the shift of the Demand Curve

c)

A lower market price after the shift of the Demand Curve

d)

No change in the market quantity after the shift of the Demand Curve

5.

When you buy a PlayStation instead of an X-Box because the price of the PlayStation went up, this is an example of what?

a)

Complements

b)

Substitutions

c)

Elasticity

d)

Economics

6.

In this supply & demand schedule, what would happen if the price of the socks was set at $2.50 a pair?

a)

All socks would sell because it would be the equilibrium price.

b)

a shortage.

c)

a surplus.

d)

No socks would be produced because it would be the equilibrium price.

7.

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?

a)

Both price and supply will rise.

b)

Both price and supply will fall.

c)

The supply will rise while the price falls.

d)

The supply will fall while the price rises.

8.

Beef is a normal good and people's incomes fall. At the same time a bumper corn crop reduces the cost of feeding steers. These changes result in

a)

A) an increase in the equilibrium quantity of beef.

b)

an increase in the equilibrium quantity of beef if the shift in the demand curve is larger than the shift in the supply curve.

c)

an increase in the equilibrium quantity of beef if the shift in the demand curve is smaller than the shift

in the supply curve.

d)

no change in the equilibrium quantity of beef.

9.

If a good is “normal,” then an increase in income will result in

a)

a lower market price.

b)

a decrease in the demand for the good.

c)

an increase in the demand for the good.

d)

no change in the demand for the good.

10.

Suppose that demand decreases AND supply decreases. What would you expect to occur in the market for the good?

a)

Both equilibrium price and equilibrium quantity would increase.

b)

Equilibrium price would decrease, but the impact on equilibrium quantity would be ambiguous.

c)

Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

d)

Equilibrium price would increase, but the impact on equilibrium quantity would be ambiguous.