Introduction to Microeconomics MCQs

Introduction to Microeconomics MCQs

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1: The colloid osmotic pressure in the capillary is caused by __________.

A.   Proteins in the blood

B.   Blood pressure

C.   Both

D.   None

2: Mc is a _____-shaped curve due to the law of diminishing returns.

A.   U

B.   Upward-sloping.

C.   Downward-sloping.

D.   Horizontal

3: If demand is inelastic, the tax burden falls primarily on the _____ and deadweight loss is _____.

A.   Buyer,small

B.   Seller,big

C.   Buyer,big

D.   Seller,small

4: Planned economies rely heavily on ________ to make most economic decisions.

A.   The government

B.   Market

C.   Private individuals

D.   All of the above

5: When a minimum wage is set above the equilibrium wage rate, _______.

A.   Have no effect because the equilibrium level of employment is not affected by a minimum

B.   Wage above the equilibrium wage.

C.   Create a surplus of labor.

D.   Create a lower wage rate for skilled workers than for unskilled workers.

E.   Create a shortage of labor

6: When opportunity cost is positive, economic profit ______ accounting profit.

A.   Is less than

B.   Is greater than

C.   Is equal to

D.   None of the above

7: If the fed wants to increase the money supply, it will _____ treasury securities.

A.   Buy

B.   Sell

C.   Buy & sell

D.   None of the above

8: Normal profits in a perfectly competitive industry refer to ______ run profits.

A.   Entry; exit

B.   MR = MC

C.   P = MC

D.   Zero long

9: A giffen good is one in which the _____ curve is _____ sloped.

A.   Elastic.

B.   Demand; positively

C.   Greater than one.

D.   Rise according to the income effect

10: When unskilled teens earn less than college graduates, society answers the ________ question.

A.   How

B.   What

C.   For whom

D.   Why

E.   Social interest versus

11: The price of paper increases by a lot. book producers respond by supplying _____ books.

A.   More

B.   Fewer

C.   The

D.   Same

12: The gnp accounts for the aggregate of all goods and services produced by americans ____________.

A.   Regardless of location

B.   In the U.S

C.   In North America

D.   In North and South America

13: A person who charges a price that is determined by buying and sales decisions is a _____.

A.   Price taker

B.   Single seller

C.   Price setter

14: In the ____________, households receive goods and services and pay firms for them.

A.   Labor market

B.   Financial capital market

C.   Savings market

D.   Goods & services market

15: In the goods market, firms ________ and households ________.

A.   Supply goods and services; supply goods and services

B.   Supply goods and services; purchase goods and services

C.   Purchase goods and services; supply goods and services

D.   Purchase goods and services; supply goods and services

16: The most common pattern for marginal utility is ____________________.

A.   Diminishing marginal utility

B.   A budget constraint model

C.   A long-term perspective theoretical model

D.   Substitute consumption

17: There is no supply curve with any model other than ____________ which has a horizontal demand line.

A.   Pure competition

B.   Opportunity

C.   Implicit

D.   Explicit

18: Accountants use only ________ costs in their computations of cost.

A.   Opportunity

B.   Implicit

C.   Explicit

D.   Variable

19: _________ is (are) the largest implicit cost of operating a business.

A.   Profit

B.   Loss

C.   None

20: A supply curve that has a __________ slope represents a more elastic supply curve.

A.   Steeper

B.   Perfectly vertical

C.   Flatter

D.   One cannot conclude anything about elasticity from the slope of a supply curve

21: As production moves up, the average cost per unit decreases because ________.

A.   Fixed costs are spread over more units

B.   Of increasing diseconomies of scale

C.   Variable costs decrease

D.   Revenue increases

22: In a competitive market equilibrium the ________ equals the ________ of the last unit sold.

A.   Total profit; marginal benefit

B.   Total cost; marginal cost

C.   Profit; selling price

D.   Marginal benefit; marginal cost

23: If demand is inelastic, a price ________ causes ________ in total revenue.

A.   Decrease, decrease

B.   Decrease, increase

C.   Increase, decrease

D.   None of the above

24: If people have ______ income, they will purchase more of an "inferior"good.

A.   Less

B.   More

C.   Dosen't effect

D.   None of these

25: If the price elasticity of demand is equal to 2, the good has _____ demand.

A.   Elastic

B.   Inelastic

C.   No

D.   None of these

26: The amount of an increase in income is called the _________ income.

A.   Average

B.   Axable

C.   Marginal

D.   Utility

27: Individual consumers supply ____ and purchase ____.

A.   Factors of production; final goods and services

B.   Final goods and services; factors of production

C.   Goods markets; resource markets

28: The supply curve represents the _____ price at which a firm is willing to _____.

A.   Minimum; sell various quantities of a good

B.   Maximum; sell various quantities of a good

C.   Sell various quantities of a good; minimum

D.   Sell various quantities of a good; maximum

29: A ______ is the difference between the regular selling price of an item and its discounted price.

A.   Sales price variance

B.   Product price variance

C.   Both a and b

D.   None of the above

30: Diminishing returns begin to occur with the hiring of the _________ unit of labor.

A.   Second

B.   Third

C.   Seventh

D.   Fourth

31: Each point on the demand curve represents the quantity demanded at a specific ______.

A.   Price

B.   Production level

C.   Profit

D.   Supply level

32: The location of a firm will be a _________ factor of production in ________ run.

A.   Variable; the short

B.   Fixed; both the short and long

C.   Variable; the long

D.   Fixed; the long

33: Forms of money in the united states consist of paper money, coins, and _____.

A.   Bartering

B.   Minting

C.   Checking account balances

34: The ______________ is the average tendency to save income at a given income level.

A.   APC

B.   APS

C.   MPC

D.   MPS

35: The business cycle occurs because ______.

A.   Potential GDP is​ increasing, and increases in aggregate demand cannot keep pace with increases in​ long-run aggregate supply

B.   The Fed is constantly increasing the quantity of money

C.   Aggregate demand and​ short-run aggregate supply​ fluctuate, but the money wage rate does not adjust quickly enough to keep real GDP at potential GDP

D.   The government is constantly trying to produce an inflationary​ gap, but expenditures in the economy cannot keep pace with the​ government's agenda

36: Firms, households, and governments use the credit market for borrowing. The credit demand curve shows the relationship between the quantity of credit demanded and the real interest rate. the credit demand curve slopes downward because ____________.

A.   Government borrowing increases when budget deficits​ increase, and vice versa.

B.   A​ lender's ability to make loans falls as the real interest rate rises.

C.   A higherhigher real interest rate reducesreduces a borrowing​ firm's profit and hence its willingness to borrow.

D.   Households seek to borrow more when their outlook for the future improves.

37: The gap between ______ is the output gap.

A.   Real GDP and potential​ GDP

B.   Real GDP equals potential GDP

C.   Exceeds

D.   Rarely at full employment

38: The two types of goods and services produced are _______. an example of _______.

A.   Consumption goods and services and capital goods; consumption good

B.   Factors of production, households; consumption good

C.   Entrepreneurship, interest; consumption good

D.   None of these

39: A market economy will produce _____ without any government regulation.

A.   Too little pollution

B.   Too much pollution

C.   The socially optimal amount of pollution

D.   The amount of pollution that maximizes total surplus

40: A market with well-established rules and structure is a(n) _______ market.

A.   Used clothing

B.   Formal

C.   Inverse

D.   Movement