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Micro Final Practice (Exam 1 Questions)

tran.melissa2015
Quiz by tran.melissa2015, updated more than 1 year ago
tran.melissa2015
Created by tran.melissa2015 over 5 years ago
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Practice quiz for final. this quiz only includes multiple choice from exam 1.

Resource summary

Question 1

Question
If the price decreases in the region of the demand curve between points B and C, we can expect total revenue to ...
Image:
d32849f5-f544-4141-9bd3-80ce9507977b (image/png)
Answer
  • first increase, then decrease until total revenue is maximized.
  • decrease.
  • increase.
  • stay the same.

Question 2

Question
Which of the following examples does NOT illustrate the principle represented by the adage, "There is no such thing as a free lunch"?
Answer
  • Melissa needs to pay her rent and her electric bill.
  • Robert must decide between studying for his psychology exam and working at his part-time job.
  • Lisa can spend her money on a new smart phone or on a weekend trip.
  • Kevin must choose between buying a new flat screen television and buying his textbooks for his semester.

Question 3

Question
Which of the following is an example of something economists study?
Answer
  • Mitch chooses to work overtime to earn extra income for his family.
  • The unemployment rate in the US has fallen by 2% in the last few years.
  • Megan sells her physics textbook from last semester to her roommate for half the price of a new textbook.
  • All are correct.

Question 4

Question
Which of the following could be the price elasticity of demand for a good for which an increase in price would increase revenue?
Answer
  • 1
  • 1.8
  • 0.3
  • None are correct.

Question 5

Question
Which of the following changes would NOT shift the demand curve for a good or service?
Answer
  • A change in expectations about the future price of the good or service.
  • A change in the price of the good or service.
  • A change in the price of a related good or service.
  • A change in income.

Question 6

Question
When the price is $15, total revenue is...
Image:
57af949f-5206-417d-8383-b83693c83816 (image/jpeg)
Answer
  • $2,500
  • $3,500
  • $4,500
  • $1,500

Question 7

Question
Using the midpoint method, when price falls from $8 to $4, the price elasticity of demand is...
Image:
b60fe676-45bb-445e-8ee7-cf547d6a4d99 (image/png)
Answer
  • 2.33
  • 1
  • 0.67
  • 0.43

Question 8

Question
Which of the following could result in a movement from Point B to Point Z?
Image:
ce942e14-69fc-420b-803b-dd4e1a0151a3 (image/jpeg)
Answer
  • A) a change in the number of restaurant meals demanded
  • B) A change in the price of a restaurant meal
  • C) a change in income
  • Both A and B are correct

Question 9

Question
An economy's production of 2 goods is efficient if...
Answer
  • the goods are produced using only some of society's available resources.
  • it is impossible to produce more of one good without producing less of the other.
  • all members of society consume equal portions of the goods.
  • the opportunity cost of producing more of one good is zero.

Question 10

Question
Assume the market for tennis balls if perfectly competitive. When one tennis ball producer exits the market,...
Answer
  • the price of tennis ball increases.
  • there is no longer a market for tennis balls.
  • the price of tennis balls decreases.
  • the price of tennis balls does not change.

Question 11

Question
Economists believe that production possibilities frontiers are often bowed because...
Answer
  • of improvements in technology.
  • opportunity costs are constant.
  • resources are not completely adaptable.
  • trade-offs inevitably create unemployment.

Question 12

Question
Which of the following is most likely an inferior good?
Answer
  • and airline ticket
  • gasoline
  • an antique car
  • a bus ticket

Question 13

Question
Assume that a college student purchases only Ramen noodles and textbooks. If Ramen noodles are an inferior good and textbooks are a normal good, then the substitution effect associated with a decrease in the price of a textbook, by itself, will result in...
Answer
  • a decrease in the consumption of textbooks and a decease in the consumption of Ramen noodles.
  • a decrease in the consumption of textbooks and an increase in the consumption of Ramen noodles.
  • an increase in the consumption of textbooks and a decrease in the consumption of Ramen noodles.
  • an increase in the consumption of textbooks and an increase in the consumption of Ramen noodles.

Question 14

Question
The price elasticity of demand measures how much...
Answer
  • quantity demanded responds to a change in price.
  • quantity demanded responds to a change in income.
  • demand responds to a change in supply.
  • price responds to a change in demand.

Question 15

Question
Hold Jared's preferences for pizza and Pepsi constant. Suppose Jared's income, as well as the prices of pizza and Pepsi, double. As a result,...
Answer
  • both Jared's indifference curves and his budget constraint change.
  • Jared's indifference curves change, but his budget constraint does not change.
  • Neither Jared's indifference curves nor his budget constraint change.
  • Jared's budget constraint changes, but his indifference curves do not change.

Question 16

Question
The law of demand states that, other things equal, when the price of a good...
Answer
  • rises, the quantity demanded of the good rises.
  • falls, the quantity demanded of the good rises.
  • falls, the demand for the good rises.
  • rises, the demand for the good falls.

Question 17

Question
Which of the following could be the price elasticity of demand for a good for which a decrease in price would decrease revenue?
Answer
  • 1
  • 1.8
  • 0.8
  • 2.4

Question 18

Question
Which of the following price changes would result in no change in sellers' total revenue?
Image:
f232532d-2713-4062-ae72-7b68eab15e1d (image/jpeg)
Answer
  • The price decreases from $27 to $24.
  • The price increases from $15 to $21.
  • The price increases from $18 to $21.
  • The price decreases from $24 to $18.

Question 19

Question
The 2 basic reasons why economists often appear to give conflicting advice to policymakers are differences in...
Answer
  • opinions and values.
  • scientific judgement and education.
  • scientific judgement and values.
  • opinions and education.

Question 20

Question
This economy CANNOT produce at which point(s)?
Image:
d7c88ba9-403d-49a8-9026-f526d26a5120 (image/jpeg)
Answer
  • Q, S, T
  • Q, S
  • S
  • Q

Question 21

Question
After much consideration, you have chosen Cancun over Ft. Lauderdale as your Spring Break destination this year. However, Spring Break is still months away, and you may reverse this decision. Which of the following event would prompt you to reverse this decision?
Answer
  • The marginal benefit of going to Ft. Lauderdale decreases.
  • The marginal benefit of going to Cancun increases.
  • The marginal cost of going to Ft. Lauderdale decreases.
  • The marginal cost of going to Cancun decreases.

Question 22

Question
Which of the following is an example of a positive, as opposed to normative, statement?
Answer
  • Inflation is more harmful to the economy than unemployment is.
  • When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.
  • Prices rise when the government prints too much money.
  • If welfare payments increase, the world will be a better place.

Question 23

Question
You have $36 to spend on good X and good Y. If good X costs $6 and good Y costs $12, your budget constraint is...
Image:
c661d842-17a5-4bdd-9521-3d08ce861903 (image/jpeg)
Answer
  • CD
  • BD
  • AB
  • DE

Question 24

Question
A budget constraint illustrates the...
Answer
  • purchases made by consumers.
  • consumption bundles that a consumer can afford.
  • prices that a consumer chooses a pay for products he consumes.
  • consumption bundles that give a consumer equal satisfaction.

Question 25

Question
Efficient production is represented by which point(s)?
Image:
e4e97936-fcf9-4fd1-9e71-acb48da23c78 (image/jpeg)
Answer
  • A, B, D
  • A, B
  • A, B, C
  • C

Question 26

Question
Last year, Tess bought 5 handbags when her income was $54,000. This year, her income is $60,000, and she purchased 7 handbags. Holding other factors constant, it follows that Tess's income elasticity of demand is about...
Answer
  • 3.17, and Tess regards handbags as inferior goods.
  • 3.17, and Tess regards handbags as normal goods.
  • 0.32, and Tess regards handbags as inferior goods.
  • 0.32, and Tess regards handbags as normal goods.

Question 27

Question
Which of the following would cause the supply curve to shift from Supply A to Supply C in the market for beach towels?
Image:
378822ba-a7db-412f-a408-18e66e792a74 (image/jpeg)
Answer
  • an increase in the price of beach towels
  • a decrease in the number of firms selling beach towels
  • a decrease in the price of cotton
  • an expectation by firms that the price of beach towels will increase in the very near future

Question 28

Question
The movement from Point A to Point B on the graph is caused by...
Image:
c090a544-975a-4ecd-ad59-f5d441109fbd (image/jpeg)
Answer
  • a decrease in the price of the good.
  • an increase in the price of the good.
  • an advance in production technology.
  • a decrease in input prices.

Question 29

Question
The opportunity cost of moving from Point J to Point L is...
Image:
04049989-44cb-4694-bec6-8ade3c253893 (image/jpeg)
Answer
  • 2 cups of coffee.
  • 2 donuts.
  • 2 donuts and 2 cups of coffee.
  • 6 cups of coffee.

Question 30

Question
Normative statements are...
Answer
  • descriptive, whereas positive statements are perspective.
  • backward-looking, whereas positive statements are forward-looking.
  • forward-looking, whereas positive statements are backward-looking.
  • prescriptive, whereas positive statements are descriptive.
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