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Microeconomics Domain Exam
1.
For most products and services, increased price results in
A. Demand for fewer products
B. Demand for more products
C. Reduced demand for substitutes
D. Increased demand for compliments
2.
An increase in the price of milk causes a decrease in the
demand for cereal. The two products are
A. Substitutes
B. Complements
C. Unrelated
D. Demand elastic
3.
Because a modest price increase has little or no effect,
the demand for the product is
A. Complementary
B. Elastic
C. Inelastic
D. Unit Elastic
A.
B.
C.
D.
An increase in quantity demanded
A decrease in quantity demanded
An increase in supply
A decrease in price
6.
When a customer’s need for a product is not urgent,
demand tends to be
A. Inelastic
B. Unit elastic
C. Complementary
D. Elastic
7.
According to this demand curve, if the price of movie
videos increases from $14 to $16, the quantity
demanded will
A. Fall from 600 to 400
B. Rise from 400 to 600
C. Fall from 400 to 200
D. Rise from 200 to 400
8.
Which of the following choices could cause movement
shown in the graph?
A. An increase in the price of film
Demand Schedule
for CD's
Price
10
12
14
16
18
20
4.
5.
Quantity
1100
900
700
500
300
100
If you were to graph this demand schedule, the demand
curve would be
a. Slope upward from left to right
b. Slope downward from left to right
c. Be horizontal
d. Be vertical
What does the movement on this graph represent?
Microeconomics Domain Exam
B. A decrease in the price of film
C. An increase in the price of cameras
D. A decrease in the price of cameras
Price
Original
Demand Curve
New
Demand Curve
$80
0
1
$70
2
5
$60
4
8
$50
7
10
$40
12
15
$30
15
22
11. The change from the old demand curve to the new
demand curve shown in the table represents a(n)
A. Increase in demand
B. Increase in supply
C. Decrease in demand
D. No change in demand
9.
If the price of petrol were reduced from 2.7 to 2 what
type of regulation would be present? What would be the
result?
A. Price ceiling, surplus
B. Price ceiling; shortage
C. Price floor; surplus
D. Price floor; shortage
12. The law of supply states
A. When the price goes up the quantity
supplied goes down
B. When the price goes up the quantity
supplied goes up
C. The higher the price, the smaller the
demand.
D. When the price goes down the quantity
demanded goes down.
13. If a drought in Florida reduces the amount of oranges
grown, then
A. The demand curve of Florida oranges shifts
to the left
B. The demand curve of Florida oranges shifts
to the right
C. The supply curve of Florida oranges shifts to
the left
D. The supply curve of Florida oranges shifts to
the right
10. Which of the following choices could cause movement in
the graph?
A. A decrease in income
B. An increase in population
C. An increase in the price of a substitute
D. A decrease in the price of a compliment
14. If incomes increase, then the ________ for luxury cars
________
A. Supply; decreases
B. Supply; increases
C. Demand; increases
D. Demand; decreases
15. Market equilibrium is determined by
A. The producers in the market
B. The largest consumers in the market
C. The consumers in the market
D. All producers and consumers together
Quantity Demanded
Microeconomics Domain Exam
16. If there is a surplus of a product, we can conclude that
A. The product’s price is above equilibrium
B. The product’s price is tool low for
equilibrium
C. Quantity demanded exceeds quantity
supplied
D. The product’s price will rise
17. If it is discovered that sitting in front of a computer
regularly causes something called “zombie sickness” then
in the demand for computers will
A. Decrease causing a decrease in equilibrium
price.
B. Increase causing an increase in equilibrium
price.
C. Not change.
D. Decrease causing an increase in equilibrium
price.
18. The price elasticity of demand for a product measures
A. How responsive producers are to a price
change
B. How much price changes given a change in
demand
C. The slope of the demand curve for that
product
D. How responsive consumers are to a price
change
19. When economists say the supply of a product has
decreased, they mean that
A. A greater quantity will be produced at any
price
B. The price is too high for equilibrium
C. A smaller quantity will be produced at any
price
D. Demand was too high for producers to
make a profit
20. If the income of consumers declines due to rampant
crime, what will be the most likely effect on the
equilibrium price and quantity of candy?
A. Both price and quantity demanded will fall
B. Both price and quantity demanded will rise
C. Price will increase and quantity demanded
will decrease
D. Price will decrease and quantity demanded
will increase
21. A price ceiling is
A. A minimum price set by government. It
causes a surplus if effective
B. A maximum price set by government. It
causes a shortage is effective
C. The equilibrium price
D. A maximum price set government. It causes
a surplus if effective
22. A price floor is
A. A minimum price set by government. It
causes a surplus if effective
B. The equilibrium price
C. A minimum price set by government. It
causes a shortage if effective
D. A maximum price set by government. It
causes a surplus if effective.
23. Pure (perfect) competition is characterized by all of the
following EXCEPT
A. A small number of buyers and sellers
B. Well-informed buyers and sellers
C. Identical products
D. Independent buyers and sellers
24. A market structure in which a few very large sellers
dominate the entire industry
A. Monopoly
B. Oligopoly
C. Perfect competition
D. Pure competition
25. A monopoly’s prices are determined by
A. Competing firms
B. Market equilibrium
C. Perfect competition
D. The monopoly itself
26. Monopolistic competition and perfect competition are
similar in all aspects except ___.
A. Many firms in the industry
B. Little influence over the price
C. Use of product differentiation
D. Easy entry into the market
Microeconomics Domain Exam
27. Non-Price competition is
A. The use of advertising, celebrities, and
sweepstakes to increase interest in a
product.
B. Used to create real or imagined differences
between products.
C. Used in merging product lines.
D. Using collusion to increase profits
28. In which market structure does a firm have greatest
control over its product’s price?
A. perfect competition
B. monopoly
C. Oligopoly
D. monopolistic competition
30. What letter on the graph represents the proper location
for the market structure “oligopoly”?
A. W
B. X
C. Y
D. Z
29.On which kinds of goods do governments generally place
price ceilings?
a.
b.
c.
those that are not necessary but have
become customary
those that are essential and cheap
those that are essential but too expensive
for some customers
Fresh
Tomatoe
s
Can the
purchas
e be
delayed
?
Are
adequat
e
substitu
tes
availabl
e?
Does
purchas
e use a
large
portion
of
income?
Yes
.
Products
Gasolin Gasolin
e from a
e in
particul general
ar
station
Yes
No
Service
s of
medica
l
doctor
s
No
Butte
r
31. Which products shown in the table are likely to have
elastic demand?
A. Gasoline in general, services of medical
doctors
B. Fresh tomatoes, gasoline from a particular
gas station, butter
C. Fresh tomatoes, gasoline in general, butter
D. Gasoline from a particular station, gasoline
in general, butter
Yes
32. Which market structure sometimes involves price fixing,
price wars, and collusion?
A. monopoly
Yes
Yes
No
No
Yes
B.
Perfect competition
C.
Oligopoly
D. Monopolistic competition
E.
No
Yes
Yes
Yes
no
33. Which of the following determines the elasticity of
supply?
A. Are there adequate substitutes?
B.
Can the purchase be delayed?
C.
Does it take up a large portion of income?
D. Nature of production
Microeconomics Domain Exam
SSEMI1 The student will describe how
households, businesses, and governments are
interdependent and interact through flows of
goods, services, and money.
a. Illustrate by means of a circular flow
diagram, the Product market; the Resource
market; the real flow of goods and services
between and among businesses,
households, and government; and the flow
of money. 31, 33, 40, 41, 45
b. Explain the role of money and how it
facilitates exchange. 34, 37(charact of
money), 44, 49 (store of value)
SSEMI2 The student will explain how the Law of
Demand, the Law of Supply, prices, and profits
work to determine production and distribution in
a market economy.
a. Define the Law of Supply 12, 20
b. Define the Law of Demand. 1, 4, 14
c. Describe the role of buyers and sellers in
determining market clearing price. 15
d. Illustrate on a graph how supply and
demand determine equilibrium price and
quantity.
e. Explain how prices serve as incentives in a
market economy.
Microeconomics Domain Exam
SSEMI3 The student will explain how markets,
prices, and competition influence economic
behavior.
a. Identify and illustrate on a graph factors
that cause changes in market supply 13
a. “ demand. 2, 5, 7, 8, 10, 11, 17, 21
b. Explain and illustrate on a graph how price
floors create surpluses 16, 23
a. price ceilings create shortages. 9,
22, 38
c. Define price elasticity of demand 3, 5, 19,
42
and supply. 51
SSEMI4 The student will explain the organization
and role of business and analyze the four types of
market structures in the U.S. economy.
a. Compare and contrast three forms of
business organization— 46, 47, 48
a. sole proprietorship 25
b. partnership 26, 27
c. corporation. 18, 24(charter), 43
b. Explain the role of profit as an incentive for
entrepreneurs.
c. Identify the basic characteristics of 32, 35
(non-price comp),
a. Monopoly 30, 36
b. Oligopoly 29, 39
c. monopolistic competition
d. pure competition. 28