Microeconomics Diagnostic Quiz
Question 1
A giffen good is a good for which
a.
b.
c.
d.
If income increases, demand decreases
If price increases, demand decreases
If price increases, demand increases
If income increases, demand increases
Question 2
An inferior good is a good for which
a.
b.
c.
d.
If income increases, demand decreases
If price increases, demand decreases
If price increases, demand increases
If income increases, demand increases
Question 3
A normal good is a good for which
a.
b.
c.
d.
If income increases, demand decreases
If price increases, demand decreases
If price increases, demand increases
If income increases, demand increases
Refer to the diagram below for the Question 4- Question 6
Question 4
At the price of P2 , there is a
a.
b.
c.
d.
Shortage
Surplus
Equilibrium
Cant tell
Question 5
Price ceiling is effective at price
a.
b.
c.
d.
P2
P1
P0
Equilibrium price
Question 6
Price Floor creates
a.
b.
c.
d.
Shortage
Surplus
Equilibrium
Inequality
Question 5
Question 6
Question 7
Short Questions
Question 1
A tax on suppliers will shift the supply curve to the right. True/False
(Give explanation and draw a diagram)
Question 2
Indifference curves can cross. True or False.
(Explain with the help of a diagram)
Question 3
Question 4
Find the price elasticity of demand for the following demand curve, when price = 10
Qd = 3x + 10
Question 5
Question 6
Question 7
Pip consumes coffee and milk in fixed proportion. 2 coffee pods for 1 cup of milk.
Price of a coffee pod is 4 and price of a cup of milk is 4. Pip has 24 to spend on the two goods.
1. How many coffee cups will he consume?
2. What is the demand for coffee pod and milk