Microeconomics Unit Test Review
Chapters 4-9
Vocab to know:
Inelastic
law of demand
Law of supply
substitution effect
income effect
total revenue
market demand
schedule
elasticity of demand
ceteris paribus
1.
2.
3.
4.
5.
substitutes
inferior good
complement goods
demographics
shortage
equilibrium
rationing
disequilibrium
free market
supply shock
rent control
inventory
change in demand
minimum wage
Price ceiling
Price Floor
Yellow dog contract
Why do diminishing marginal returns occur?
What are some examples of fixed cost?
Why is supply generally said to be inelastic in the short run?
What business organization faces the greatest risk of the unlimited liability?
How do monopolistic competitive firms compete?
i. What are the forms of non-price competition?
6. In monopolistic competition, what happens when a firm begins to charge an excessive price
for its product?
7. Monopoly that the U.s government generally permits. (government monopoly and natural
monopolies)
8. What is a horizontal merge? A vertical merge?
9. Derived demand demand for labor. What is an example?
10. What are some disadvantages of a corporation?
11. Difference between a movement along a supply curve and a change in supply-what causes
both? (determinants of supply-5 of them)
i. Change in quantity supplied vs. change in supply
12. Determinants of demand (6 of them) vs. movement along the demand curve.
i. Change in quantity demanded vs change in demand
13. Who makes up the labor force?
14. Formula for Elasticity of demand and how to calculate it. Practice problem on page 157
15. Making Production Decisions Worksheet (calculating total cost, marginal cost, total revenue
and profit)