Question 1

Which of the following statements is a positive economic statement?

Accepted Answer

Raising the minimum wage will increase unemployment among teenagers.

Question 2

Suppose a new technology allows factories to produce cars using fewer resources. How would this affect the Production Possibilities Frontier (PPF)?

Accepted Answer

The PPF would shift outward.

Question 3

If the opportunity cost of producing 1 unit of good X is 3 units of good Y, what is the opportunity cost of producing 2 units of good X?

Accepted Answer

$$6$$

Question 4

A bakery is considering producing one more loaf of bread. The additional revenue from selling this loaf is $$2, and the additional cost is 1.50. $$According to marginal analysis, should the bakery produce the extra loaf?

Accepted Answer

Yes, because marginal benefit ($$2) exceeds marginal cost (1.50).$$

Question 5

Which of the following best describes allocative efficiency?

Accepted Answer

Resources are used so that each good is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it.

Question 6

A country can produce either 100 units of wheat or 50 units of corn with its resources. What is the opportunity cost of producing 1 unit of corn?

Accepted Answer

$$2$$ units of wheat

Question 7

Which of the following would cause a shift to the right in the demand curve for electric cars?

Accepted Answer

An increase in consumer preference for environmentally friendly vehicles.

Question 8

If the government imposes a per unit tax of $$t on $$sellers, what is the new supply equation if the original supply was $$Q_s = 2P$$?

Accepted Answer

$$Q_s = 2(P-t)$$

Question 9

Which of the following is NOT a factor of production?

Accepted Answer

Money

Question 10

Suppose the market for apples is in equilibrium at price $$P^*$$ and quantity $$Q^*. If a $$disease destroys half the apple crop, what is the likely effect on the equilibrium price and quantity?

Accepted Answer

Price increases, quantity decreases.

Question 11

A movement along the supply curve is caused by:

Accepted Answer

A change in the price of the good itself.

Question 12

If the price of a substitute good increases, what happens to the demand for the original good?

Accepted Answer

Demand for the original good increases.

Question 13

Which of the following best illustrates the concept of producer surplus?

Accepted Answer

A farmer is willing to sell corn for $$3 per bushel but sells it for 5 $$per bushel.

Question 14

If the demand for a product is given by $$Q_d = 100 - 2P$$ and the supply is $$Q_s = 4P$$, what is the equilibrium price?

Accepted Answer

$$P = 14.29$$

Question 15

Which of the following is an example of a normative statement?

Accepted Answer

The government should provide universal basic income.

Question 16

If a per unit tax is imposed on a good, what happens to the supply curve?

Accepted Answer

It shifts to the left (upward).

Question 17

Which of the following would NOT cause a shift in the supply curve for laptops?

Accepted Answer

A decrease in the price of laptops.

Question 18

If the market price is above the equilibrium price, what will result in the market?

Accepted Answer

A surplus of the good.

Question 19

Which of the following best describes the law of demand?

Accepted Answer

As the price of a good increases, the quantity demanded decreases, ceteris paribus.

Question 20

A tax is imposed on buyers of cigarettes. What is the effect on the demand curve?

Accepted Answer

The demand curve shifts to the left.

Microeconomics Exam 1 Study Guidance

Study Guide - Practice Questions

Study Guide - Flashcards