Introduction to Microeconomics (ECO-341)
Quiz#1
Student ID: ________________
Time: 30 Mins
Q#1 Pick whether the following statements are concepts of Microeconomics or Macroeconomics
S. No
1
Statement
Predicting how consumers will react to higher gasoline
prices
2
Analyzing the consequences of a free trade agreement
between two countries
3
Identifying the least-cost method of producing
textbooks
Microeconomics
Macroeconomics
Q#2 Which of the following would be an opportunity Cost of going to College?
A.
B.
C.
D.
The Tuition Cost of College
Non-Tuition Expenses incurred during college
The student debt accumulated during college
Four years if foregone earnings in the labor market
Q#3 Which of the following changes would most likely increase the price of CDs?
A.
B.
C.
D.
A decrease in the cost of CD production
An economic recession that reduces the incomes of all individuals
An increase in the price of cheese
A decrease in the popularity of online music streaming services
Q#4 Which of the following is not a characteristic of a perfectly competitive industry?
A.
B.
C.
D.
The industry consists of many small firms producing similar products
Producers set the price of their products freely
There is no government intervention in the industry
Economic profit is driven to almost zero due to competition
Q#5 What impact will higher lumber costs have on the market for new homes?
A.
B.
C.
D.
Demand curve would shift outward
Demand curve would shift inward
Supply curve would shift inward
Supply curve would shift outward
Q#6 How would I show the impact of higher gas prices on the market for hybrid autos? (Considering hybrid autos
substitutes of traditional fuel autos)
Q#7. Which graph best captures the "story" behind
the following headline "oil prices fall on news of
higher Saudi oil shipments." The graphs are the
picture of the market for oil.
A
B
C
D
E
Q#8 Which of the following headlines doesn't seem to make sense given what we have learned about supply and
demand?
A.
B.
C.
D.
"oil prices rise as deep freeze continues"
"SUV prices rise with higher gas prices "
"lower chip prices push computer prices down "
"increased immigration pushes service worker wages lower"
Q#9 An increase in the price of a product will reduce the amount of it purchased because:
A.
B.
C.
D.
supply curves are upsloping
the higher price means that real incomes have risen
consumers will substitute other products for the one whose price has risen
consumers substitute relatively high-priced for relatively low-priced products.
Q#10 Which of the following would not shift the demand curve for beef?
A. a widely publicized study which indicates beef increases one's cholesterol
B. a reduction in the price of cattle feed
C. an effective advertising campaign by chicken producers
D. a change in the incomes of beef consumers
Q#11 If the price of K declines, the demand curve for the complementary product J will:
A. Shift to the left
B. Decrease
C. Shift to the right
D. Remain unchanged
Q#12 Refer to the diagram. A price of $20 in this market will result in:
A. Equilibrium
B. A shortage of 50 units
C. A shortage of 100 units
D. A surplus of 50 units
E. A surplus of 100 units
Q#13 Which of the above diagrams illustrate(s) the
effect of a decrease in incomes upon the market for
secondhand clothing?
A. A & C
B. A only
C. B only
D. C only
Q#14 Why does a demand curve slope downward?
Q#15 A new battery for electric cars has been introduced. It will allow a car to go 100 miles farther than the current
batteries. What will happen to the supply? Illustrate graphically.