Microeconomic Concepts Test Questions – Flashcards
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An increase in the market demand for gasoline in the present, all else equal, could be caused by
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a rise in peoples' income.
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Which of these has the MOST effect on elasticity of supply?
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time to adjust
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What type of competition does this firm's promotion BEST reflect?
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non-price competition
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Which of these would MOST LIKELY cause an increase in the price of an item?
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an increase in the cost of raw materials for that item
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According to this graph, what would the approximate equilibrium price be for widgets?
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$1.75
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Of the terms listed below, which is the BEST synonym for the word "profit"?
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"earnings"
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All of these would cause a shift to the left of the demand curve EXCEPT for
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increased money supply.
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This illustrates that one function of money is to be a
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medium of exchange.
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To have demand, what must you have
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the desire and the ability to pay for the item.
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A local business woman noticed that after she had paid all the costs of conducting her business that year a substantial amount of money remained. What could she conclude?
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Her business had made a profit.
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In doing this, Leroy has become a(n)
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entrepreneur.
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In a free enterprise system, what drives individuals to risk their savings in a business venture?
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the potential for profit
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What is the name of the point at which supply and demand intersect?
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equilibrium
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How might a minimum wage law impact the supply and demand of workers?
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It might result in a surplus of supply.
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If the price for widgets was set at $4.25
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producers would discover that the price should be lowered.
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Assuming that the graph follows the normal laws of economics, the line represents
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supply.
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The new oven in Mr. Brown's bakery allows him to produce bread more efficiently and more cheaply. What is the MOST LIKELY effect?
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the price drops and the quantity demanded increases
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Which of these is MOST LIKELY a result of apartment rent controls?
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a shortage of apartments
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One difference between a manager and an entrepreneur is that an entrepreneur is willing to
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take a financial risk.
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Successful attempts to make the internal combustion engine more efficient in the 19th century resulted in an increase in the demand for
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petroleum.
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Which of these is the best economic definition of "pure competition"?
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If a drug company is granted a patent on a new medication, which result is possible?
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For an industry to be perfectly competitive, what must exist?
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What is the relationship between quantity supplied and price?
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How might firms engage in price competition?
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Which scenario BEST represents monopolistic competition?
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Which markets compete in non-price competition?
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Which factor might cause an increase in the supply of a product?
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In a market economy, why are businesses created?
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Which choice does NOT describe a basic function of money?
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If the supply of computer engineers increases at the same time that the demand for these workers decreases, what would be the MOST LIKELY effect on wages for these workers?
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Which situation is the MOST LIKELY result of a price ceiling being set below the equilibrium price?
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Money can be easily converted into goods or services. This is an example of which "function of money"?
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Washboard mussels are found along Wisconsin's portion of the Mississippi River. According to the diagram, equililbrium price occurred in which year?
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If the percent change in quantity demanded is greater than the percent change in price, what is MOST LIKELY true?
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Spi-Tech manufactures wooden handles for shovels. Which situation would MOST likely cause an increase in the supply of their handles?
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