Principles of Microeconomics Final review part 1 (old stuff)

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Posted on

May 22nd, 2023

question

(1) Scarcity exists:

answer

only when an economy is not able to operate at a point on its production possibilities frontier

question

(4) Which of the following is a positive microeconomic statement?

answer

Ceteris paribus, consumers respond to an increase in the price of a product by decreasing quantity demanded

question

(6) In order to move from PPF1 to PPf2, this economy needs:

answer

an increase in the resources and/or technology used to produce both consumer and capital goods

question

(7) If this economy is on PPF1, production is efficient at point(s):

answer

B, C, & D

question

(8) Market economies are characterized by all of the following except:

answer

government control of capital

question

(10) In a market economy:

answer

the interaction of individual demanders and suppliers determines output prices

question

(11) Any point on a production possibilities frontier represents:

answer

efficient production

question

(15) An outward shift of a production possibilities frontier illustrates that:

answer

economic growth has occurred

question

(17) The opportunity cost of 1 car is:

answer

1boat for Country A and 2 boats for Country B

question

(18) If both countries produce the good for which each has a comparative advantage, Country A will produce _ and Country B will produce _

answer

cars; boats

question

(22) According to the law of demand, an increase in the price of orange juice will, ceteris paribus:

answer

decrease the quantity demanded of orange juice

question

(23) For a normal good, a decrease in consumer income leads to:

answer

a decrease in demand and a decrease in both equilibrium price and quantity

question

(24) Which of the following would lead to a decrease in the supple of desk top computers, ceteris paribus?

answer

An increase in the wages paid to desk top computer factory workers

question

(25) If cotton clothing becomes more popular at the same time that the supply of cotton decrease, the the basic supple and demand analysis predicts that:

answer

the equilibrium price of cotton clothing will increase but the change in the equilibrium quantity of cotton clothing cannot be determined from the information given.

question

(26) Ceteris paribus, an increase in the supply of a product leads to:

answer

a decrease in the equilibrium price of the product and an increase in the equilibrium quantity of the product

question

(27) In the market for used cars, a shortage of used cars would, ceteris paribus:

answer

put upward pressure on the price of used cars

question

(28) A market price of $20 per dozen of roses will lead to a:

answer

shortage of 200 dozen red roses

question

(29) The equilibrium price of a dozen red roses in the market is:

answer

$30 because the quantity supplies of red roses is equal to the quantity demanded of red roses at $30 per dozen of red roses

question

(30) The demand for potato hips will increase in response to all of the following except:

answer

an increase in the number of firms producing potato chips

question

(31) The responsiveness of buyers to change in the price of a product is measured by:

answer

price elasticity of demand

question

(33) If quantity demanded is 30 when price is $3 and quantity demanded is 20 when price is $5, then total revenue _ if price increases from $3 to $5, implying that demand is _.

answer

increases; inelastic

question

(34) The demand for generic shampoo is likely to be:

answer

elastic if there are lots of good substitutes for generic shampoo abailable

question

(35) If a 5% increase in the price of a product results in a 10% decrease in the quantity demanded of the product, then the absolute value of the price elasticity of demand coefficient is _ and demand is said to be _

answer

2; elastic

question

(36) If a seller want to increase revenue from the sale of a product with a price elasticity of demand coefficient of 1.6, then the seller should:

answer

decrease price because demand is elastic

question

(38) Demand that is perfectly elastic graphs as a(n)

answer

horizontal line

1 of 25

question

(1) Scarcity exists:

answer

only when an economy is not able to operate at a point on its production possibilities frontier

question

(4) Which of the following is a positive microeconomic statement?

answer

Ceteris paribus, consumers respond to an increase in the price of a product by decreasing quantity demanded

question

(6) In order to move from PPF1 to PPf2, this economy needs:

answer

an increase in the resources and/or technology used to produce both consumer and capital goods

question

(7) If this economy is on PPF1, production is efficient at point(s):

answer

B, C, & D

question

(8) Market economies are characterized by all of the following except:

answer

government control of capital

question

(10) In a market economy:

answer

the interaction of individual demanders and suppliers determines output prices

question

(11) Any point on a production possibilities frontier represents:

answer

efficient production

question

(15) An outward shift of a production possibilities frontier illustrates that:

answer

economic growth has occurred

question

(17) The opportunity cost of 1 car is:

answer

1boat for Country A and 2 boats for Country B

question

(18) If both countries produce the good for which each has a comparative advantage, Country A will produce _ and Country B will produce _

answer

cars; boats

question

(22) According to the law of demand, an increase in the price of orange juice will, ceteris paribus:

answer

decrease the quantity demanded of orange juice

question

(23) For a normal good, a decrease in consumer income leads to:

answer

a decrease in demand and a decrease in both equilibrium price and quantity

question

(24) Which of the following would lead to a decrease in the supple of desk top computers, ceteris paribus?

answer

An increase in the wages paid to desk top computer factory workers

question

(25) If cotton clothing becomes more popular at the same time that the supply of cotton decrease, the the basic supple and demand analysis predicts that:

answer

the equilibrium price of cotton clothing will increase but the change in the equilibrium quantity of cotton clothing cannot be determined from the information given.

question

(26) Ceteris paribus, an increase in the supply of a product leads to:

answer

a decrease in the equilibrium price of the product and an increase in the equilibrium quantity of the product

question

(27) In the market for used cars, a shortage of used cars would, ceteris paribus:

answer

put upward pressure on the price of used cars

question

(28) A market price of $20 per dozen of roses will lead to a:

answer

shortage of 200 dozen red roses

question

(29) The equilibrium price of a dozen red roses in the market is:

answer

$30 because the quantity supplies of red roses is equal to the quantity demanded of red roses at $30 per dozen of red roses

question

(30) The demand for potato hips will increase in response to all of the following except:

answer

an increase in the number of firms producing potato chips

question

(31) The responsiveness of buyers to change in the price of a product is measured by:

answer

price elasticity of demand

question

(33) If quantity demanded is 30 when price is $3 and quantity demanded is 20 when price is $5, then total revenue _ if price increases from $3 to $5, implying that demand is _.

answer

increases; inelastic

question

(34) The demand for generic shampoo is likely to be:

answer

elastic if there are lots of good substitutes for generic shampoo abailable

question

answer

2; elastic

question

(36) If a seller want to increase revenue from the sale of a product with a price elasticity of demand coefficient of 1.6, then the seller should:

answer

decrease price because demand is elastic

question

(38) Demand that is perfectly elastic graphs as a(n)

answer

horizontal line

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