Microeconomics Midterm Exam 2020

Economics is the study of
A. Production technology
B. Consumption decisions
C. How society decides what, how, and for whom to produce
D. The best way to run society

The opportunity cost of a good is:
A. The theme lost in finding it
B. The quantity of other goods sacrificed to get another unit of that good
C. The utility of the good
D. The loss of interest in using savings

A market can accurately be described as:
A. A place to buy things
B. A place to sell things
C. The process by which prices adjust to get another good
D. A place where buyers and sellers meet

Microeconomics is concerned with:
A. The economy as a whole
B. The electronics industry
C. The study of individual economic behavior
D. The interactions within the entire economy

Firms produce output using land, labor, entrepreneurship, and:
A. Capital
B. Investment
C. Interest
D. Economic rent

If a diagram of a line shows that lower values on the vertical line are associated with higher values on the horizontal line, this is an example of:
A. A nonlinear relationship
B. A positive relationship
C. A scatter diagram
D. A negative relationship(inverse)

When we know the quantity of a product that buyers are able to purchase at each possible price, we know:
A. Demand
B. Supply
C. Excess Demand
D. Excess Supply

When a market is in equilibrium:
A. Buyers spend all their money
B. Quantity demanded equals quantity supplied
C. Everything is not sold
D. Excess demand exists

The demand for textbooks is given by the equation: Q= 20,000 - 100P and the supply is given by the equation Q= 2,000 + 200P. What is the equilibrium price and quantity?
A. P 80, Q 600
B. P 20, Q 400
C. P 95, Q 475
D. None of the above

A demand curve can shift because of changing:
A. Incomes
B. Price of related goods
C. Tastes of consumers
D. All of the above

A supply curve is directly affected by:
A. Technology
B. Input costs
C. Government regulations
D. All of the above

If a price increase of good "A" increases the quantity demanded of good "B" then good "B" is a:
A. Substitute good
B. Complementary good
C. Inferior good
D. Bargain

An increase in consumer income will increase demand for a __________ but decrease demand for a _______________
A. Substitute good, inferior good
B. Normal good, inferior good
C. Inferior good, normal good
D. Normal good, complementary good

The price elasticity of demand measures:
A. The responsiveness of quantity demanded to a change in price
B. How far a demand curve shifts
C. A change in price
D. A change in quantity demanded

Economists assume that people consume goods and services to achieve maximum:
A. Status
B. Prestige
C. Utility
D. Self-esteem

The extra-utility from consuming one more unit of a good is called:
A. Marginal Utility
B. Average utility
C. Marginal product
D. Surplus utility

The increase in total cost when one more unit is produced is known as:
A. Marginal cost
B. Opportunity cost
C. Limited cost
D. Average cost

When the demand for goods and services is drawn as a graph:
A. Price is measured on the vertical axis
B. Quantity is measured on the horizontal axis
C. The resulting curve has a negative slope
D. All of the above
E. None of the above

A shift to the right in the demand curve occurs when:
A. Suppliers place more goods on the market
B. The price of the good rises
C. Consumers want to buy more than before at a given price
D. The price of the good falls

Which of the following is likely to result in a shift in the supply curve for dresses?
A. An increase in consumer prices
B. A reduction in tariffs that allows manufactures of dresses to import more cloth at cheaper prices than before
C. An increase in dress prices
D. Higher prices for skirts, pants, and blouses

A market will experience a ______ when the price is above the equilibrium, and a ___________ when the price is below equilibrium.
A. Shortage, shortage
B. Surplus, surplus
C. Shortage, surplus
D. Surplus, shortage

If the demand curve for steak shifts to the right, the most likely explanation is:
A. The price of cattle feed has fallen
B. The price of steak has fallen
C. Cattle production has fallen
D. Consumer income has risen

A movement along the demand curve as price changes, is called:
A. A change in quantity demanded
B. A change in demand
C. A change in Equilibrium
D. A change in shifting

Which of the following goods would have the most inelastic demand curve at any point in time?
A. Jewelry
B. Big Macs
C. Electricity
D. Pork Chops

Which of the following goods will have the most elastic demand?
A. Electricity
B. Gasoline
C. Restaurant meals
D. Insulin for diabetics

The amount a firm spends on purchased inputs to produce a given level of output is:
A. Equal to total cost
B. Greater than total cost
C. Less than total cost
D. Equal only to total labor cost

Which of the following is a fixed cost to a farmer?
A. Gasoline
B. Fertilizer
C. Mortgage payments
D. Seed

Which of the following is a variable cost to an airline?
A. Insurance
B. Property taxes
C. Jet Fuel
Rent or airport space

Which of the following is correct?
A. AC = AFC/Q
B. AC = AFC + AVC
C. AC = MFC + MVC
D. TFC + TMC = MFC + MVC

Total cost of production includes
A. Only direct dollars spent for labor and materials
B. All dollar expenditures on all inputs
C. Dollar costs of inputs plus the opportunity costs of inputs
D. Dollar cost less taxes

Marginal fixed cost is always:
A. Zero
B. Near zero
C. Quite low
D. Quite high
E. Variable, depending on the product