MICROECONOMICS QUIZ

1. Economics is a social science that studies the choices that individuals,

businesses, governments, and entire societies make in the presence of

____________.
necessity
scarcity
efficiency
poverty

2. Which of the following questions is an example of a microeconomic

question?
What is the effect of an increase in the quantity of money on the price level?
What is the effect of a decrease in the price of chocolate chip cookies on the
quantity purchased of doughnuts?
What is the effect of an increase in government spending on economic growth?
What is the relationship between the unemployment rate and the inflation rate?

3. Which of the following questions is an example of a macroeconomic

question?
What is the impact of the development of a
vaccine against lyme disease?
What is the effect of a decrease in the
availability of chocolate chips on the market
for chocolate chip cookies?
How does an increase in the price of crude
oil affect the market for minivans?
What is the effect of an increase in the
price of housing on the cost of living?

4. All of the following categories

are factors of production except

____________.
money
entrepreneurship
capital
land

5. __________ is the level of consumption that people enjoy, on the

average, and is measured by average income per person.

The cost of living
The business cycle
The standard of living
Profit

6. The amount of money that it takes to buy the goods and services that a

typical family consumes is ____________.

the cost of living
income
the standard of living

inflation

7. A business cycle can be described as ___________ followed by

___________ followed by ___________ followed by ___________.

an expansion; a peak; a depression; a trough
an inflation; a peak; a recession; a trough
an inflation; a peak; a deflation; a trough
an expansion; a peak; a recession; a trough

8. The highest-valued alternative that we give up to get something is the

____________.
opportunity cost
incentive
marginal cost
marginal benefit

9. A graphical relationship between two variables that move in the same

direction is called a ____________ relationship.

positive
negative
linear
inverse

10. The slope of a straight line ____________.

equals the value measured on the y-axis divided by the value measured on the xaxis
is constant
increases as the value of the variable measured on the x-axis increases
increases as the value of the variable measured on the x-axis decreases

11. The amount that consumers plan to buy during a given time period at a

particular price is the ____________.

quantity demanded
demand
quantity supplied
supply

12. When the price of a good or service rises, ceteris paribus, its

opportunity cost ____________.

falls
cannot be determined
remains the same
rises

13. When the price of a good rises, ceteris paribus, people cannot afford to

buy all the things they previously bought so they buy less. This is called
the ____________ effect.
substitution
quantity
price
income

14. Willingness and ability-to-pay is a measure of ____________.

efficiency
opportunity cost

marginal cost
marginal benefit

15. If the price of a good falls, then the demand for its complement will

___________.
decrease
remain the same
decrease initially and then increase
increase

16. A good whose demand increases as income increases is a

____________.
normal good
substitute
complement
inferior good

17. If the price of a good falls, ceteris paribus, there is a _______________

the supply curve.

movement down along
leftward shift of
movement up along
rightward shift of

18. All of the following are likely to cause an increase in the supply of beef

except ____________.
a fall in feed grain that is fed to cattle
an increase in the demand for chicken
an increase in the number of cattle ranchers
an increase in the demand for leather goods

19. A market moves toward its equilibrium through adjustments in

____________.
supply
demand
price

incentives

20. In the market for chocolate chip cookies, an increase in demand will

result in ___________.
an increase in price and a decrease in quantity
a decrease in both price and quantity
an increase in both price and quantity
a decrease in price and an increase in quantity

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