Title: Micro 1.1 1. In the market below, what would be true at a price of $6? a. There is excess demand (a shortage) of 10 units. b. The market is in equilibrium. *c. There is excess supply (a surplus) of 20 units. Title: Micro 1.2 2. At which of the following prices will there be excess demand (a shortage)? a. $6 b. $5 c. $4 *d. $3
2 Title: Micro 1.3 3. Which of the following statements is true? a. The market is in equilibrium at a price of $9. *b. There is excess demand (a shortage) at a price of $3. c. There is excess supply (a surplus) at a price of $6. Title: Micro 1.4 4. Which of the following statements is true? *a. The market is in equilibrium at a price of p 1 and a quantity of Q 1. b. There is excess supply (a surplus) at a price of p 1. c. There is excess demand (a shortage) at a price of p 1. Title: Micro 1.5 5. Suppose that currently in some market the quantity demanded is greater than the quantity supplied. Which of the following will happen to price? a. Price will not change. *b. Price will increase. c. Price will decrease.
3 Title: Micro 2.1 6. Suppose that you read in the newspaper that the price of motorcycles has decreased while the quantity has increased. What is the most likely cause? a. Demand has increased b. Demand has decreased *c. Supply has increased d. Supply has decreased Title: Micro 2.2 7. The graph below represents the market for mopeds. Which of the following would cause the change depicted below? a. An increase in the price of steel used to make mopeds. b. High gas prices make the high mileage mopeds attractive. c. A decrease in consumer incomes. *d. An increase in the number of moped producers.
4 Title: Micro 2.3 8. Which of the following could explain the change depicted in the market below. a. An increase in the income of consumers (assuming that the good is normal). b. An increase in the price of a substitute product. c. An increase in the number of consumers in the market. *d. All of the above are possible explanations. Title: Micro 2.4 9. If you observe that the price of chocolate is decreasing and the quantity is decreasing, which of the following is the likely cause? a. Demand has increased *b. Demand has decreased c. Supply has increased d. Supply has decreased Title: Micro 2.5 10. If you observe that the price of milk is increasing and the quantity is decreasing, which of the following is the likely cause? a. Demand has increased b. Demand has decreased c. Supply has increased *d. Supply has decreased
5 Title: Micro 3.1 11. Which of the following would make the price of coffee increase? a. An increase in the price of cream, a complement to coffee. b. A decrease in the number of coffee drinkers. c. A decrease in the cost of producing coffee. d. A decrease in consumer incomes (assuming that coffee is a normal good). *e. A news report that coffee may decrease the risk of some diseases. Title: Micro 3.2 12. A new wonder diet sweeps though America which results in a dramatic loss in weight. The key to the diet is to eat unlimited amounts of red meat (beef), but no poultry or carbohydrate-rich foods. As millions of Americans switch to the new diet, there will be: *a. an increase in the demand for beef, leading to a shift to the right in the demand curve of beef and higher beef prices. b. an increase in the demand for beef, leading to a shift to the right in the demand curve of beef and lower beef prices. c. a decrease in the supply of beef, leading to a shift to the left in the supply curve of beef and higher beef prices. d. a decrease in the demand for beef, leading to a shift to the left in the demand curve of beef and higher beef prices. Title: Micro 3.3 13. Which of the following could make the price of pens at the bookstore increase? a. a requirement that all exams be completed in pen b. an increase in the price of ink c. an increase in the price of pencils, a close substitute d. a and b *e. a, b, and c Title: Micro 3.4 14. Steel is an input needed to make automobiles. Suppose that the price of steel increases. What will happen to the price and quantity of automobiles? a. Price increase, quantity increase *b. Price increase, quantity decrease c. Price decrease, quantity decrease d. Price decrease, quantity increase
6 Title: Micro 4.1 15. The figure below shows the cost curves for a profit maximizing firm. Using information labeled in the figure, when the price is $15 the profits of the firm are. *a. 100 b. 40 c. 200 d. 15 e. 300 Title: Micro 4.2 16. The graph below represents a perfectly competitive firm. If the market price is $15, how much should the firm produce to maximize their profits? a. 5 b. 15 *c. 18 d. 20 e. 32
7 Title: Micro 4.3 17. What should a perfectly competitive firm do to maximize their profits? a. Produce where total revenues are maximized. b. Produce where total costs are minimized. *c. Produce where price equals marginal cost. d. Produce where average costs are minimized. Title: Micro 4.4 18. The table below presents the output, marginal revenue (MR), and marginal cost (MC) of a firm. If the firm is currently producing 14 units, what would you recommend they do to maximize profits? Quantity Marginal Revenue (MR) 12 9 5 13 9 6 14 9 7 15 9 8 16 9 9 17 9 10 a. Increase quantity to 15 b. Decrease quantity to 12 c. Continue producing a quantity of 14 *d. Increase quantity to 16 Marginal Cost (MC) Title: Micro 4.5 19. A firm operates in a perfectly competitive market. Currently, its average (total) cost is 10, its marginal cost is 12 and the price is 10. What should the firm do to maximize profit? a. Increase its quantity *b. Decrease its quantity c. Keep its quantity the same
8 Title: Micro 5.1 20. Suppose that you are operating a monopoly. What should you do to maximize your firm s profits? a. Produce where total revenues are maximized. *b. Produce where marginal revenue equals marginal cost. c. Produce where total costs are minimized. d. Produce where marginal cost is minimized. Title: Micro 5.2 21. The graph below represents a monopolist. What price and quantity should the firm choose to maximize profits? a. price of $5, quantity of 14 *b. price of $7, quantity of 10 c. price $9, quantity of 14 d. price of $2, quantity of 18
9 Title: Micro 5.3 22. Consider the monopolist pictured below. To maximize profits, the firm should choose a. price = p 3, quantity = q 3 *b. price = p 4, quantity = q 2 c. price = p 5, quantity = q 4 d. price = p 2, quantity = q 2 Title: Micro 5.4 23. The graph below represents a profit-maximizing monopolist. What are the firm s profits? a. 0 b. 20 *c. 30 d. 90
10 Title: Micro 5.5 24. The table below provides the quantity, price, marginal cost and marginal revenue of a monopolist. If the firm is currently producing 5 units, what would you recommend they do to maximize profits? Quantity Price Marginal Revenue Marginal Cost 0 27 -- -- 1 24 24 2 2 21 18 6 3 18 12 12 4 15 6 20 5 12 0 30 6 9-6 42 7 6-12 56 8 3-18 72 9 0-24 90 a. Increase quantity to 9 *b. Decrease quantity to 3 c. Continue producing of quantity of 5 d. Decrease quantity to 1
11 Title: Micro 6.1 25. Which of the following is (are) a characteristic of perfectly competitive markets? a. No barriers to entry. b. A large number of firms. c. All firms produce identical, or nearly identical, products. d. Firms are price-takers. *e. All of the above are characteristics. Title: Micro 6.2 26. Which of the following is (are) a characteristic of a monopolistic market? *a. High barriers to entry. b. There are many firms in the market. c. Firms in the market are price-takers. d. All of the above are characteristics. Title: Micro 6.3 27. Compared to a competitive market, we know that a monopolistic market will have a. a higher price and higher quantity *b. a higher price and a lower quantity c. a lower price and a lower quantity d. a lower price and a higher quantity Title: Micro 6.4 28. Competition in markets tends to a. lower prices and lower quantities *b. lower prices and increase quantities c. increase prices and increase quantities d. increase prices and lower quantity
12 Title: 7.1 29. In the market below, a price ceiling at $3 will *a. cause excess demand (a shortage) of 10 units b. cause excess supply (a surplus) of 10 units c. will not affect the price and quantity Title: 7.2 30. In the market below, a price floor at $6 will a. cause excess demand (a shortage) of 20 units *b. cause excess supply (a surplus) of 20 units c. will not affect the price and quantity
13 Title: 7.3 31. In the market below, a quota at a quantity of 15 units will a. cause price to fall to $3 *b. cause price to rise to $5 c. will not affect the price Title: 7.4 32. The graph below represents a competitive market. Which of the following government interventions would decrease the efficiency of the market? a. a price ceiling at $2 b. a price floor at $5 c. a quota at 10 units d. a tax of $2 *e. a, b, c, and d
14 Title: 7.5 33. Suppose that the government places a $2 tax in the market below. What will be the new price that consumers pay? a. $2 b. $3 c. $4 *d. $5 e. $6
15 Title: 8.1 34. Recently, the government considered adding a tax on CDs. If this tax was enacted, then: a. there would be no effect on consumption or the prices paid by consumers of CDs. *b. consumers would pay a higher price and producers would sell less CDs than before the tax. c. consumers would pay a lower price and producers receive a higher price for CDs than before the tax. d. there would be an increase in economic activity due to the tax Title: 8.2 35. A tax affects a. buyers only b. sellers only *c. both buyers and sellers Title: 8.3 36. A tax in a competitive market a. increases the price consumers pay b. lowers the quantity bought and sold c. causes inefficiency in the absence of externalities d. a and b *e. a, b and c Title: 8.4 37. Which of the following government interventions will increase the market quantity? a. A tax b. A price floor c. A price ceiling *d. A subsidy e. A quota Title: 8.5 38. A binding quota in a competitive market a. increases the price consumers pay b. lowers the quantity bought and sold c. causes inefficiency d. a and b *e. a, b and c
16 Title: 9.1 39. It is appropriate for governments to intervene in markets to help efficiency in which of the following situations: a. The presence of externalities b. The presence of a public good *c. Both a and b d. It is never appropriate for the government to intervene in markets to improve efficiency Title: 9.2 40. The government ALWAYS makes markets worse off (less efficient) no matter the circumstance a. True *b. False Title: 9.3 41. In what circumstances could government interventions increase the efficiency of a market? a. If there is an externality b. If the market is not competitive c. If the good is a public good *d. a, b, and c e. None of the above, government interventions always decrease inefficiency Title: 9.4 42. Suppose that a market currently has a negative externality. What should the government do to improve efficiency? *a. Enact a policy to lower the quantity in the market b. Enact a policy to increase the quantity in the market c. Do nothing, government interventions always decrease efficiency Title: 9.5 43. Consider the market for some public good. If we rely on the private market to provide the good then which of the following would we expect to happen? a. The efficient amount of the public good will be provided. b. Too much of the public good will be provided. *c. Too little of the public good will be provided.
17 Title: Year in school 50. Please select your year of school. *a. Freshmen b. Sophomore c. Junior d. Senior Title: College 51. Please select the college in which you are a student. If you have not yet selected a major, please choose the college that you intend to enroll in. *a. College of Architecture and Environmental Design b. College of the Arts c. College of Arts and Sciences d. College of Business Administration e. College of Communication and Information f. College of Education, Health and Human Services g. Other college h. I do not know Title: College of Business 52. Are you pursuing or do you intend to pursue a major or minor in the college of business? a. Yes b. No Title: Business Major/Minor 53. If you are pursuing, or intend to pursue, a major or a minor in the College of Business which major or minor have you/will you choose? *a. Accounting b. Economics c. Entrepreneurship d. Finance e. Management f. Marketing g. Other business major or minor h. I am not pursuing a major or a minor in the College of Business Title: Business Second Major/Minor 54. If you are pursuing, or intend to pursue, a secondary major or a minor in the College of Business which major or minor have you/will you choose? *a. Accounting b. Economics c. Entrepreneurship d. Finance e. Management f. Marketing g. Other business major or minor h. I am not pursuing a second major or minor in the College of Business
Title: Expected Grade 55. What grade do you expect to receive in this course? *a. A b. B c. C d. D e. F 18