Top 80+ Solved MicroEconomics, Theory and Applications 1 MCQ Questions Answer
Q. The law of demand states that an increase in the price of a good:
a. increases the supply of that good.
b. decreases the quantity demanded for that good.
c. increases the quantity supplied of that good.
d. none of these answers.
Q. The law of supply states that an increase in the price of a good:
a. none of these answers.
b. increases the quantity supplied of that good.
c. decreases the demand for that good.
d. decreases the quantity demanded for that goo
Q. If an increase in consumer incomes leads to a decrease in the demand for camping equipment,then camping equipment is:
a. a normal good.
b. an inferior good.
c. a substitute good
d. a complementary goo
Q. Which of the following shifts the demand for watches to the right?
a. an increase in the price of watches
b. none of these answers
c. a decrease in the price of watch batteries if watch batteries and watches are complements
d. a decrease in consumer incomes if watches are a normal good
Q. An inferior good is one for which an increase in income causes a(n)
a. decrease in supply.
b. increase in demand.
c. increase in supply.
d. decrease in deman
Q. If a small percentage increase in the price of a good greatly reduces the quantity demandedfor that good, the demand for that good is
a. income inelastic.
b. price inelastic.
c. price elasti
d. unit price elastic.
Q. The price elasticity of demand is defined as
a. the percentage change in the quantity demanded divided by the percentage change in income.
b. the percentage change in income divided by the percentage change in the quantity demanded.
c. the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good.
d. the percentage change in price of a good divided by the percentage change in the quantity demanded of that goo
Q. In general, a flatter demand curve is more likely to be:
a. price elastic
b. unit price elastic
c. none of these answers
d. price inelastic.
Q. In general, a steeper supply curve is more likely to be
a. price elastic
b. none of these answers
c. unit price elastic
d. price inelastic
Q. Which of the following would cause a demand curve for a good to be price inelastic?
a. the good is a luxury
b. there are a great number of substitutes for the good
c. the good is a necessity
d. the good is an inferior good
Q. If the cross-price elasticity between two goods is negative, the two goods are likely to be:
a. substitutes
b. complements
c. necessities
d. luxuries
Q. If there is excess capacity in a production facility, it is likely that the firm’s supply curve is:
a. price inelastic
b. none of these answers
c. unit price elastic
d. price elastic
Q. If the income elasticity of demand for a good is negative, it must be:
a. an elastic good
b. an inferior good
c. a normal good
d. a luxury good
Q. Which of the following would decrease the supply of wheat?
a. a decrease in the price of pesticides
b. an increase in the demand for wheat
c. a rise in the price of wheat
d. an increase in the price of corn
Q. Which of the following defines marginal utility?
a. the change in total utility divided by the price of a product
b. the maximum amount of satisfaction from consuming a product
c. the total satisfaction received from consuming as much of the product that isavailable for consumption
d. the additional satisfaction received from consuming one more unit of a product