MIDTERM PRACTICE TEST – MICROECONOMICS:
\n1
\nAn example of an effective price ceiling would be the government setting the price of wheat at ______ per bushel when the market price is at $4.25 per bushel.<\/p>\n
\u2981 $ 3.75
\n\u2981 $ 5.00
\n\u2981 $ 7.75
\n\u2981 $12.00<\/p>\n
2
\nIf the market price of green tea is $20.00 per pound but the government will not allow green tea growers to charge more than $15.00 per pound of green tea, which of the following will happen?<\/p>\n
\u2981 Demand must eventually decrease so that the market will come into equilibrium at a price of $17.50.
\n\u2981 There will be a shortage of green tea.
\n\u2981 Supply must eventually increase so that the market will come into equilibrium at a price of $17.50.
\n\u2981 There will be a surplus of green tea.<\/p>\n
3
\nAn effective price ceiling must be set<\/p>\n
\u2981 above the equilibrium price.
\n\u2981 below the equilibrium price.
\n\u2981 at the equilibrium price.
\n\u2981 either at or above the equilibrium price.<\/p>\n
4
\nThe law of demand says that:
\n\u2981 price and quantity demanded are directly related.
\n\u2981 price and quantity demanded are inversely related.
\n\u2981 price and quantity supplied are directly related.
\n\u2981 price and quantity supplied are inversely related.<\/p>\n
Questions 5-6 refer to the following graph.<\/p>\n
<\/p>\n
5
\nEquilibrium price and quantity are:
\n\u2981 $4,120
\n\u2981 $3,120
\n\u2981 $4,150
\n\u2981 $2,150
\n6
\nAt $2, there would be a _____ in this market.
\n\u2981 surplus of 60.
\n\u2981 surplus of 30.
\n\u2981 shortage of 60.
\n\u2981 shortage of 30.<\/p>\n
7
\nAt what price would there be a surplus of 60?
\n\u2981 $2
\n\u2981 $3
\n\u2981 $4
\n\u2981 cannot say from this data.<\/p>\n
Questions 8-9 refer to the following graph.<\/p>\n
Figure 4-3<\/p>\n
8
\nRefer to Figure 4-3. A change from Point A to Point E represents a(n):
\n\u2981 increase in supply.
\n\u2981 decrease in supply.
\n\u2981 increase in quantity supplied.
\n\u2981 decrease in quantity supplied.
\n9
\nRefer to Figure 4-3. A change from Point A to Point B represents a(n):
\n\u2981 increase in supply.
\n\u2981 decrease in supply.
\n\u2981 increase in quantity supplied.
\n\u2981 decrease in quantity supplied.<\/p>\n
10
\nWhen demand increases:
\n\u2981 equilibrium price will increase, but equilibrium quantity will decrease.
\n\u2981 equilibrium price will decrease, but equilibrium quantity will increase.
\n\u2981 both equilibrium price and quantity will decrease.
\n\u2981 both equilibrium price and quantity will increase.<\/p>\n
11
\nWhen supply increases:
\n\u2981 equilibrium price will increase, but equilibrium quantity will decrease.
\n\u2981 equilibrium price will decrease, but equilibrium quantity will increase.
\n\u2981 both equilibrium price and quantity will decrease.
\n\u2981 both equilibrium price and quantity will increase.<\/p>\n
12
\nAfter widespread press reports about the dangers of contracting “mad cow disease” by consuming beef from Canada, the likely economic effect on the U.S. demand curve for beef from Canada is:
\n\u2981 no change; only the supply curve for beef is likely to be affected.
\n\u2981 a shift of the demand curve for beef to the left.
\n\u2981 a movement down along the demand curve for beef to the right.
\n\u2981 a shift of the demand curve for beef to the right.<\/p>\n
13
\nIf an increase in the price of Good X causes a decrease in the demand for Good Y, we can conclude that:
\n\u2981 the price of Good Y will increase.
\n\u2981 Goods X and Y are normal goods.
\n\u2981 Goods X and Y are substitute goods.
\n\u2981 Goods X and Y are complement goods.<\/p>\n
14
\nSugar is an important input in the production of cookies. If the price of sugar decreases, what would we expect to happen to the supply of cookies?
\n\u2981 No change
\n\u2981 Increases
\n\u2981 Decreases
\n\u2981 Disappears<\/p>\n
15
\nA severe freeze has once again damaged the Florida orange crop. The impact on the market for orange juice will be a leftward shift of:
\n\u2981 the supply curve.
\n\u2981 the demand curve, as consumers try to economize because of the shortage.
\n\u2981 both the supply and demand curves.
\n\u2981 the supply curve and a rightward shift of the demand curve, resulting in a higher equilibrium price.<\/p>\n
16
\nWhich of the following would reduce the supply of microcomputers?
\n\u2981 a technological improvement that lowers the cost of producing the computers
\n\u2981 higher wage rates for the workers that assemble the computers
\n\u2981 a reduction in the price of computer chips used to produce the computers
\n\u2981 a reduction in the price of computers.<\/p>\n
17
\nWhen the demand for a commodity decreases and its supply is vertical we can conclude that:
\n\u2981 both price and quantity will rise.
\n\u2981 price will fall while quantity remains constant.
\n\u2981 quantity will rise while price remains constant.
\n\u2981 neither price nor quantity will change.<\/p>\n
18
\nAn expectation that the p rice of housing will increase more rapidly in coming years will cause the:
\n\u2981 Quantity supplied of houses today will decrease.
\n\u2981 demand for houses today to increase.
\n\u2981 supply of houses today to increase.
\n\u2981 demand for houses today to decrease.<\/p>\n
19
\nAn increase in the demand for a commodity accompanied by a decrease in its supply will result in a(n):
\n\u2981 decrease in price and an increase in quantity.
\n\u2981 increase in both price and quantity.
\n\u2981 increase in price while the quantity can increase or decrease.
\n\u2981 decrease in price while the quantity can increase or decrease.<\/p>\n
20
\nWhich of the following would result in a higher equilibrium quantity and an ambiguous change in equilibrium price?
\n\u2981 An increase in supply and demand
\n\u2981 An increase in supply and a decrease in demand
\n\u2981 A decrease in supply and demand
\n\u2981 A decrease in supply and an increase in demand<\/p>\n
21
\nThe president of a college has been told that when they raised their tuition by 15% the previous year, total revenue from tuition remained unchanged. Assuming the change in revenue is due to the change in tuition only, the president could conclude that demand for that college, over that tuition range, must be:
\n\u2981 greater than 1.
\n\u2981 equal to 1.
\n\u2981 equal to zero.
\n\u2981 less than 1.<\/p>\n
22
\nA perfectly elastic supply curve would:
\n\u2981 be horizontal.
\n\u2981 be vertical.
\n\u2981 intersect the two axes at the origin.
\n\u2981 intersect the horizontal axis.<\/p>\n
23
\nA marketing student observes that when the price of ice cream rises by 10%, the quantity of ice cream a supplier is willing to sells rises by 5%. The student correctly concludes that the elasticity of supply for ice cream is:
\n\u2981 .5.
\n\u2981 5.
\n\u2981 .2.
\n\u2981 2.<\/p>\n
24
\nIf the supply curve intersects the vertical (price) axis, the supply curve has an elasticity:
\n\u2981 greater than one.
\n\u2981 less than one.
\n\u2981 that is indeterminate.
\n\u2981 equal to one.<\/p>\n
25
\nAssume that the income elasticity of demand for a good is greater than one. Then evaluate each of the following statements and choose the best answer from among the lettered choices below.
\n1) The good is a luxury good.
\n2) The good is a necessity.
\n3) The good is a normal good.
\n4) The good is an inferior good.
\n\u2981 Only Statements 1 and 3 are correct.
\n\u2981 Only Statement 1 is correct.
\n\u2981 Only Statement 3 is correct.
\n\u2981 Only Statement 2 is correct.
\n\u2981 Only Statement 4 is correct.<\/p>\n","protected":false},"excerpt":{"rendered":"
MIDTERM PRACTICE TEST – MICROECONOMICS: 1 An example of an effective price ceiling would be the government setting the price of wheat at ______ per bushel when the market price is at $4.25 per bushel. \u2981 $ 3.75 \u2981 $ 5.00 \u2981 $ 7.75 \u2981 $12.00 2 If the market price of green tea is […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-6526","post","type-post","status-publish","format-standard","hentry","category-economics"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/6526","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=6526"}],"version-history":[{"count":3,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/6526\/revisions"}],"predecessor-version":[{"id":6529,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/6526\/revisions\/6529"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=6526"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=6526"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=6526"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}