MICROECONOMICS PRACTICE

Source: Tùm lum

1. Resources are:
A. scarce for households but plentiful for economies.
B. plentiful for households but scarce for economies.
C. scarce for households and scarce for economies.
D. plentiful for households and plentiful for economies.
2. Economics is the study of:
A. production methods.
B. how society manages its scarce resources.
C. how households decide who performs which tasks.
D. the interaction of business, government and households
3. What you give up to obtain an item is called your
A. Opportunity cost
B. Explicit cost
C. Monetary cost
D. Direct cost
4. Your opportunity cost of going to a theatre is
A. The price of the ticket
B. The price of the ticket plus the cost of any soda and popcorn you buy at
the theater
C. The total cash expenditure needed to go to the movie plus the value of
your time
D. Zero, if you enjoy the movie and consider it a worthwhile use of time
and money
5. If demand is linear (a straight line), then price elasticity of demand is
A. The upper portion is more elastic than the lower point.
B. The upper portion is less elastic than the lower point.
C. inelastic throughout.
D. constant along the demand curve.
E. elastic throughout.

6. If there is no tax placed on the product in this market, consumer surplus is

 the area:

A. C + D + F.
B. A.
C. A + B + E.
D. D + C + B.
E. A + B + C.
7. Producers were compensated for meeting output targets rather than for selling
their products. In this context, what economic incentives did producers have?
A. To produce good quality products so that society would benefit from the
resources used
B. To conserve on costs, so as to maintain efficiency in the economy
C. To produce enough to meet the output target, without regard for quality
or cost
D. To produce those products that society desires most
8. If an increase in the price of blue jeans leads to an increase in the demand for
tennis shoes, then blue jeans and tennis shoes are
A. complements.
B. inferior goods.
C. normal goods.
D. none of these answers.
E. substitutes.
9. When determining the actual costs of attending college, which part of your
room and board expenses should be factored in?
A. Your full room-and-board expenses should always be included.
B. None of your room-and-board expenses should ever be included.
C. You should include only the amount by which your room-and-board
expenses exceed the income you earn while attending college.
D. You should include only the amount by which your room-and-board
expenses exceed the expenses for rent and food if you were not in college
10. 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 along its demand
curve.
C. decreases the demand for that good.
D. increases the quantity supplied of that good along its supply
curve.

11. If an increase in the price of a good has no impact on the total revenue in that
market, demand must be
a. all of these answers.
b. price inelastic. P,TR cung dau
c. unit price elastic.
d. price elastic. P,TR trai dau

12. Linh goes to the CGV cinema, where tickets usually cost $9. She intends to
see a movie for which she has a $3 discount coupon that is only applicable to
that film and is set to expire that day. However, when she arrives, she meets a
friend who suggests watching a new release instead. There is only one screening
time remaining for both movies, and they are scheduled to start and end at the
same time. If Linh decides to watch the new release with her friend, what would
her opportunity cost be?
A. The amount she values the first movie + $3
B. The amount she values the first movie + $9
C. $3
D. $9
13. Imagine that after graduating from college, Thảo secure a job at a bank with
an annual salary of $30,000. After two years in that position, you have the
chance to enroll in a one-year graduate program, which would mean leaving your
job. Which of the following factors should not be considered when calculating
your opportunity cost?
A. The cost of tuition and books to attend the graduate program
B. The $30,000 salary that you could have earned if you retained your job
at the bank C. The $45,000 salary that you will be able to earn after having
completed your graduate program
D. The value of insurance coverage and other employee benefits you
would have received if you retained your job at the bank
14. 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. none of these answers.
e. the percentage change in price of a good divided by the percentage
change in the quantity demanded of that good.

15. If the price of a good is above the equilibrium price,

a. there is a surplus and the price will rise.
b. there is a shortage and the price will fall.
c. there is a shortage and the price will rise.
d. the quantity demanded is equal to the quantity supplied and the price
remains unchanged.
e. there is a surplus and the price will fall.

16. Which of the following does not represent an opportunity cost for Nghĩa in
attending school?
A. The money he could have earned by working if he had not gone to
college.
B. The party he could have enjoyed if he had not stayed in to study for his
exam.
C. The nap he could have enjoyed if he had not attended class.
D. The money he spends on his food while attending school.
17. For most students, the earnings they give up to attend college are
A. A minor cost when compared to the costs of tuition, room and board,
and the like.
B. The single largest cost of their education.
C. About equal to the costs of room and board at college.
D. Not considered true costs by an economist.
18. Trade-offs are required because wants are unlimited and resources are
a. economical.
b. unlimited.
c. efficient.
d. marginal.
e. scarce.
19. A rational person does not act unless
a. the action is ethical.
b. the action produces marginal costs that exceed marginal benefits.
c. the action produces marginal benefits that exceed marginal costs.
d. the action makes money for the person.
20. Suppose you find €20. If you choose to use the €20 to go to a football match,
your opportunity cost of going to the game is
a. nothing, because you found the money.
b. €20 (because you could have used the €20 to buy other things) plus
the value of your time spent at the game.
c. €20 (because you could have used the €20 to buy other things) plus
the value of your time spent at the game, plus the cost of the dinner
you purchased at the game.
d. €20 (because you could have used the €20 to buy other things).
22. Since people respond to incentives, we would expect that, if the average
salary of accountants increases by 50% while the average salary of teachers
increases by 20%, then
a. fewer students will take degree courses in accounting and more will
take education courses.
b. fewer students will take degree courses in education and more will
take accounting courses.
c. fewer students will attend university.
d. none of these answers.
23. 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.
24. Although pollution regulations lead to a cleaner environment and enhanced
health benefits, they also result in decreased incomes for the owners, workers,
and customers of the regulated firms. This statement demonstrates the principle
that
A. Trade can make everyone better off
B. Rational people think at the margin
C. People face tradeoffs
D. People respond to incentives
25. Economists use the word equality to describe a situation in which
EQUALITY >< EFFICIENCY
A. Each member of society has the same income.
B. Each member of society has access to abundant quantities of goods
and services, regardless of his or her income.
C. Society is getting the maximum benefits from its scarce resources.
D. Society's resources are used in an equal manner
26. Which of the following involve a trade-off?
a. Taking a nap
b. All of these answers involve trade-offs.
c. Watching a football game on Saturday afternoon
d. Going to university
e. Buying a new car
27. A price change causes the quantity demanded of a good to decrease by 30%,
while the total revenue of that good increases by 15%. The demand curve is:
A. perfectly inelastic
B. inelastic
C. unitary elastic
D. elastic
E. perfectly elastic
28. The price of a good rises from $8 to $12, and the quantity demanded falls
from 110 to 90 units. The price elasticity is:
A. 1/5
B. ½
C. 2
D. 5
Use this table for questions from 29 to 34:

Price (millions/ unit) 5 10 15 20 25 30

Quantity Demanded 100 90 80 70 60 50

(unit)

Quantity Supplied (unit) 40 50 60 70 80 90

29. The equilibrium price is:

A. 15 B. 20 C. 25 D. 70
30. The equilibrium quantity is:
A. 70 B. 65 C. 20 D. 15
31. The demand function is:
A. QD = 2P – 110
B. QD = -2P – 110
C. QD = 2P + 110
D. QD = -2P + 110
32. The supply function is:
A. QS = 2P – 110
B. QS = 2P + 30
C. QS = 2P + 110
D. QS = -2P – 30
33. If the government takes 5 millions per unit, the new equilibrium price is:
A. 22,5 B. 30 C. 17,5 D. 55
34. If the government supports 10 millions per unit, the new equilibrium price is:
A. 30 B. 15 C. 20 D. 25

35. Give QD = 180 – 3P; QS = 30 + 2P. If the government impose a tax on this
product, the equilibrium quantity will decrease to 78. The tax is:
A. 5
B. 12
C. 10
D. 3