Quiz 01 1- Microeconomics is the branch of economics that dealswith which of the
ID: 1250596 • Letter: Q
Question
Quiz 01
1- Microeconomics is the branch of economics that dealswith which of the
following topics?
A. The behavior of individual consumers.
B. Unemployment and interest rates.
C. The behavior of individual firms and investors.
D. The behavior of individual consumers, firms andinvestors.
2- Which of the following statements would you considerto be a normative
one?
A. Faster economic growth should result if an economy has ahigher level of
investment.
B. Changing the level of interest rates is a better way ofmanaging the
economy than using taxation and government expenditure.
C. Higher levels of unemployment will lead to higher levels ofinflation.
D. The average level of growth in the economy was faster in the1990s than
the 1980s.
3- Which of the following is a positivestatement?
A. When the price of a good goes up, consumers buy less ofit.
B. When the price of a good goes up, firms produce more ofit.
C. When the Federal government sells bonds, interest rates riseand private
investment is reduced.
D. All of the given options.
4- Suppose an industrious student (hoping to improve thegrade on an
upcoming economics exam) organizes a study group byreserving a
meeting room, compiling study materials, and attractingfellow students.
This student would most likely be which of the followingfactors of
production?
A. Land.
B. Labor.
C. Capital.
D. Entrepreneurship.
5- The two opposing forces that reach balance in themarket equilibrium
are:
A. Government and scarcity.
B. Competition and monopoly.
Quiz 01 ECO402
Spring 2009 VU
C. Demand and supply.
D. Science and policy.
6- A supply curve reveals:
A. The quantity of output consumers are willing to purchase ateach possible
market price.
B. The difference between quantity demanded and quantitysupplied at each
price.
C. The maximum level of output an industry can produce,regardless of price.
D. The quantity of output that producers are willing to produceand sell at
each possible market price.
7- The demand for books is: Qd= 60 - 2P
The supply of books is: Qs= 3P
Refer to the above Scenario, What is the equilibriumprice of books?
A. 5
B. 10
C. 12
D. 20
8- Assume that steak and potatoes are complements. Whenthe price of
steak goes up, the demand curve forpotatoes
A. Shifts to the left.
B. Shifts to the right.
C. Remains constant.
D. Shifts to the right initially and then returns to itsoriginal position.
9- Coffee and cream:
A. Are both luxury goods.
B. Are complements.
C. Are both more inelastic in demand in the long run than in theshort run.
D. Have a positive cross price elasticity ofdemand.
Quiz 01 ECO402
Spring 2009 VU
10- The price of good A goes up. As a result the demandfor good B shifts
to the right. From this, we can infer that:
A. Good A is used to produce good B.
B. Good B is used to produce good A.
C. Goods A and B are substitutes.
D. Goods A and B are complements.
11- Production possibilities analysis assumesthat:
A. Resources and technology increase with production.
B. Resources are used to produce thousands of goods.
C. Extra resources are saved for emergency use.
D. Resources are used in a technically efficient way.
12- If an economy is producing inside theproduction-possibilities curve,
then it has:
A. Unemployment.
B. Full employment.
C. Economic growth.
D. Economic efficiency.
13- "Utility" is most closely related to theterm:
A. Useless.
B. Require.
C. Necessary.
D. Satisfaction.
14- Economists use the term marginal utility tomean:
A. Additional satisfaction gained divided by additional cost ofthe last unit.
B. Total satisfaction gained when consuming a given number ofunits.
C. Additional satisfaction gained by the consumption of one moreunit of a
good.
D. The process of comparing marginal units of all goods whichcould be
purchased.
16- Indifference curves are convex to the origin becauseof:
A. Transitivity of consumer preferences.
B. The assumption of a diminishing marginal rate ofsubstitution.
C. The assumption that more is preferred to less.
D. The assumption of completeness.
17- Engel curve slopes backward bendingfor:
A. Normal goods.
B. Inferior goods.
C. Giffen goods.
D. All of the given options.
Quiz 01 ECO402
Spring 2009 VU
Good Y
45°
Good X
A
18- Ali's preferences for good X and good Y are shown inthe diagram
below.
Based on the above figure, it can be inferredthat:
A. Ali does not consider good X as "good”.
B. Ali will never purchase any of good Y.
C. Ali regards good X and good Y as perfect substitutes.
D. Ali regards good X and good Y as perfect complements.
19- Ahmad's preferences for good X and good Y are shownin the diagram
below.
Quiz 01 ECO402
Spring 2009 VU
Based on the above figure, it can be inferredthat:
A. Ahmad does not consider good X as "good”.
B. Ahmad will never purchase any of good Y.
C. Ahmad regards good X and good Y as perfect substitutes.
D. Ahmad regards good X and good Y as perfect complements.
20- If the quantity of good a (Qa) is plotted along thehorizontal axis, the
quantity of good b (Qb) is plotted along the verticalaxis, the price of good
a is Pa, the price of good b is Pb and the consumer'sincome is I, then the
slope of the consumer's budget constraint willbe:
A. -Qa / Qb
B. -Qb / Qa
C. -Pa / Pb
D. -Pb / Pa
Explanation / Answer
1 d 2 c 3 b 4 d 5 d 6 c 7 a 8 c 9 b 10 c 11 a 12 c 13 d 14 a 15 d 16 d 17 d 18 b 19 b 20 dRelated Questions
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