Foundations of Microeconomics Exam Bank
Course Introduction
Foundations of Microeconomics introduces students to the essential principles and concepts that underpin the study of how individuals, households, and firms make decisions regarding resource allocation. The course explores core topics such as demand and supply, market equilibrium, elasticity, consumer and producer behavior, the influence of government intervention, and market failures. Through real-world applications and analytical models, students gain a comprehensive understanding of how microeconomic forces shape the functioning of different types of markets and influence the allocation of scarce resources in society.
Recommended Textbook
Microeconomics Principles and Applications 6th Edition by Robert E. Hall
Available Study Resources on Quizplus
18 Chapters
2377 Verified Questions
2377 Flashcards
Source URL: https://quizplus.com/study-set/1296
Page 2
Chapter 1: What Is Economics
Available Study Resources on Quizplus for this Chatper
178 Verified Questions
178 Flashcards
Source URL: https://quizplus.com/quiz/25733
Sample Questions
Q1) Microeconomics deals with which of the following?
A)the total output of an economy
B)the measurement of a nation's inflation rate
C)how producers and consumers interact in individual markets
D)how tax policies influence economic growth
E)whether wage growth will outpace inflation in the coming year
Answer: C
Q2) Economic models are used primarily to
A)predict behavior under specific circumstances
B)make an exact reproduction of one facet of the economy
C)increase the mathematical complexity and rigor of economics
D)provide simple answers to simple questions
E)give accurate forecasts of the future
Answer: A
Q3) Opportunity costs arise because of resource scarcity.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Scarcity, choice, and Economic Systems
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/25735
Sample Questions
Q1) Bill can cook dinner in 45 minutes and mow the lawn in 1.5 hours.Eileen can cook dinner in 1.5 hours and mow the lawn in 2 hours.Which of the following statements is correct?
A)Bill has both an absolute advantage and a comparative advantage in cooking dinner. B)Bill has both an absolute advantage and a comparative advantage in mowing the lawn.
C)Eileen has both an absolute advantage and a comparative advantage in cooking dinner.
D)Eileen has both an absolute advantage and a comparative advantage in mowing the lawn.
E)Bill has the comparative advantage in both cooking dinner and mowing the lawn. Answer: A
Q2) Traditional economies tend to be
A)unstable and unpredictable
B)stable,predictable,and growing
C)unstable,unpredictable,and stagnant
D)unstable and unpredictable,but growing
E)stable and predictable,but stagnant
Answer: E
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Supply and Demand
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/25736
Sample Questions
Q1) If the market for a good is initially in equilibrium and there is a rightward shift of the demand curve,then
A)the equilibrium price will fall
B)there will be a rightward movement along the supply curve
C)the supply curve will also shift to the right
D)the supply curve will shift to the left
E)the demand curve will shift back as consumers react to the higher equilibrium price
Answer: B
Q2) Evan left a job in which he was earning $75,000 a year for one he liked better but pays only $50,000 a year.Around the same time as the job switch,Evan needed to buy a new car.Had he kept his old job he would have bought a new car but instead he was forced to buy a used car.Therefore
A)used cars are normal goods for Evan
B)new cars are inferior goods for Evan
C)the supply curve for new cars shifted to the left
D)new and used cars are complements
E)used cars are inferior goods for Evan
Answer: E
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: Working With Supply and Demand
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/25737
Sample Questions
Q1) In Figure 4-2,if the government imposes a price ceiling of $4,the result will be
A)equilibrium
B)excess supply
C)no different than before the price ceiling is imposed
D)excess demand
E)the demand shifts leftward and supply shifts rightward
Q2) If an excise tax is imposed on shoes,
A)government tax revenue will fall
B)the market price of shoes will decrease
C)the supply curve will shift downward
D)the equilibrium quantity demanded will decrease
E)the equilibrium quantity supplied will increase
Q3) Federal subsidies to higher education benefit
A)only the student
B)only universities
C)both universities and students
D)neither universities nor students
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Elasticity
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/25738
Sample Questions
Q1) If the elasticity of demand is much greater than the elasticity of supply,a subsidy awarded to demanders will
A)benefit the demanders more than the suppliers
B)benefit the suppliers more than the demanders
C)the benefit of the subsidy will be equally shared between the demanders and the suppliers
D)allow the demanders to be the only ones who will benefit
E)Without more information as to the amount of the subsidy,who will benefit more can not be determined
Q2) The price elasticity of demand measures the
A)responsiveness of a good's price to a change in quantity demanded
B)adaptability of suppliers when a change in demand alters the price of a good
C)responsiveness of quantity demanded to a change in a good's price
D)adaptability of buyers when there is a change in demand
E)responsiveness of quantity supplied to a change in quantity demanded
Q3) If a change in price does not lead to any change in revenue,then demand over that range of prices is inelastic.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Consumer Choice
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/25739
Sample Questions
Q1) A technological change that enables a student to learn more French in the same amount of study time
A)causes the budget line to rotate inward
B)causes an outward,parallel shift of the budget line
C)shifts the "demand curve" inward
D)is equivalent to a increase in the "price" of an hour spent studying French
E)makes the student better off
Q2) The feature of preferences that "more is better"
A)is a logical consequence of transitivity
B)is shared by most people,most of the time.
C)implies that 5 apples will always be preferred to 4 oranges
D)implies that 5 apples will always be preferred to 5 oranges
E)means that,when dining,people always try to eat as much as they possibly can
Q3) A utility-maximizing consumer will
A)consume at a point on her budget line
B)consume each good until its marginal utility is zero
C)adjust her consumption pattern so that the marginal utilities of all goods are equal
D)consume more of a good only if its price rises
E)stop consuming any good whose price rises
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Production and Cost
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/25740
Sample Questions
Q1) If minimum efficient scale is small relative to the maximum potential market,
A)relatively large firms will have a cost advantage over relatively small firms
B)the market price will be low
C)relatively small firms will have a cost advantage over relatively large firms
D)the market price will be high
E)only one firm will survive in the long run.
Q2) Which of the following is true about the relationships among various cost curves?
A)When MC exceeds ATC,ATC must be rising.
B)When MC exceeds ATC,ATC could be rising or falling.
C)When ATC is falling,MC must exceed ATC.
D)When TC is rising,MC must exceed TC.
E)TC falls when AFC falls.
Q3) When firms become so large that they have to add additional layers of management and decision making becomes more cumbersome,
A)economies of scale are said to occur
B)marginal cost begins to fall in the short run
C)marginal cost begins to rise in the short run
D)the long-run average total cost curve is flat
E)the long-run average total cost curve slopes upward
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: How Firms Make Decisions: Profit Maximization
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/25741
Sample Questions
Q1) Profit maximization occurs at the quantity where marginal cost equals marginal revenue.
A)True
B)False
Q2) In the long run,if a firm's total cost exceeds its total revenue at all output levels,it should
A)always exit the industry
B)always continue operating
C)increase the amount of its fixed inputs
D)increase the proportion of its total cost that is fixed
E)maximize the difference between its marginal revenue and its marginal cost
Q3) Consider the firm shown in Figure 8-6.If there is an increase in fixed cost,then
A)the TR curve will rotate upward
B)the TR curve will shift to the right
C)the TR curve will be unaffected
D)the TC curve will shift downward
E)profits will rise
Q4) Economic profit is another name for accounting profit.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Perfect Competition
Available Study Resources on Quizplus for this Chatper
250 Verified Questions
250 Flashcards
Source URL: https://quizplus.com/quiz/25742
Sample Questions
Q1) If expansion of an industry's output causes a downward shift of firms' average total cost curves,
A)each firm earns a long-run economic profit
B)all of the following are correct
C)there will be long-run economic profits
D)it is a decreasing-cost industry
E)it is an increasing-cost industry
Q2) In a perfectly competitive market,the good or service cannot differ substantially among sellers.
A)True B)False
Q3) In order for a firm to face a perfectly elastic demand curve,it must
A)be a large firm selling a standardized product
B)be a small producer selling a standardized product
C)be a small producer;its product may or may not be standardized
D)be a large producer selling a non-standardized product
E)sell a standardized product,but the size of the firm is irrelevant
Q4) In a perfectly competitive market,the market demand curve is horizontal.
A)True B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: B:Perfect Competition
Available Study Resources on Quizplus for this Chatper
5 Verified Questions
5 Flashcards
Source URL: https://quizplus.com/quiz/25743
Sample Questions
Q1) Which of the following is not a characteristic of a perfectly competitive market
A)buyers and sellers are well informed about the market
B)standardized product
C)many buyers and few sellers
D)easy exit out of the industry
E)easy entry into the industry
Q2) In a perfectly competitive market,a technological advance allows all firms to earn higher economic profits in the long run.
A)True
B)False
Q3) One of the defining characteristics of a perfectly competitive market is
A)both buyers and sellers are well informed about the market
B)a small number of buyers
C)high barriers to entry
D)a small number of buyers but a large number of sellers
E)buyers are better informed about the market than sellers
Q4) Diminishing marginal returns are the reason why some industries have positively-sloped long-run average cost curves.
A)True
B)False
Page 12
To view all questions and flashcards with answers, click on the resource link above.
Chapter 11: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
192 Verified Questions
192 Flashcards
Source URL: https://quizplus.com/quiz/25734
Sample Questions
Q1) Consider an industry with 5 firms.Firm A has sales of $6 mil. ,firm B has sales of $12 mil. ,firm C has sales of $30 mil. ,firm D has sales of $50 mil.and firm E has sales of $2 mil.The Herfindahl-Hirschman index for this industry is
A)3580
B)3584
C)2500
D)3400
E)unknown,not enough information to tell
Q2) Which of the following is an example of a cartel?
A)AFL-CIO
B)OPEC
C)United Auto Workers Union
D)NATO
E)Organization of American States
Q3) The monopolistically competitive firm shown in Figure 11-4
A)achieves a break-even outcome as its best alternative
B)earns an economic profit in the long run
C)suffers an economic loss in the long run
D)shuts down since it suffers an economic loss
E)produces at the minimum point of its LRATC curve
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 11: Monopoly
Available Study Resources on Quizplus for this Chatper
214 Verified Questions
214 Flashcards
Source URL: https://quizplus.com/quiz/25744
Sample Questions
Q1) The firm depicted in Figure 10-21 will have
A)an economic loss
B)all of the following
C)total variable cost of $25,000
D)total cost of $43,750
E)total fixed cost of $18,750
Q2) In the short run,a monopoly should shut down whenever
A)marginal revenue exceeds marginal cost
B)price is less than average total cost
C)total revenue is less than total cost
D)price exceeds the ratio of marginal cost to average cost at the optimal output
E)price is less than average variable cost everywhere
Q3) The monopolist in Figure 10-32 is currently operating in
A)the short run.
B)the long run.
C)the short run or the long run.
D)the very long run.
Q4) For a monopolist,marginal revenue is lower than price.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 12: Labor Markets
Available Study Resources on Quizplus for this Chatper
97 Verified Questions
97 Flashcards
Source URL: https://quizplus.com/quiz/25745
Sample Questions
Q1) Which of the following would prevent a labor market from being classified as perfectly competitive?
A)It is difficult for new workers to enter the market.
B)All workers have the same abilities.
C)Exiting the market is easy for workers who are currently in the market.
D)Both buyers and sellers of labor are well-informed about market conditions.
E)Each firm hires only a tiny fraction of the total labor in the market.
Q2) Both marginal revenue and marginal revenue product refer to the gains to the firm from employing one additional worker.
A)True
B)False
Q3) In a perfectly competitive labor market
A)all firms are wage takers
B)all firms are wage searchers
C)all firms sell their output at a constant price
D)none of the firms that demand labor can be monopolists
E)some firms may be able to influence the wage rate as long as most firms cannot
Q4) The wage rate is constant along a firm's labor demand curve.
A)True
B)False
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: B: Labor Markets
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/25732
Sample Questions
Q1) Unions attempt to raise wage rates for their members by
A)reducing the supply of the product their members produce
B)lowering barriers to entry so their members have greater opportunities
C)reducing the demand for labor so there are fewer nonunion competitors
D)negotiating a higher-than-competitive wage rate
E)lowering the marginal product of nonunion labor
Q2) The Earned Income Tax Credit
A)is targeted to poor families
B)is less targeted to poor families than the minimum wage
C)is just a different name for the minimum wage
D)operates on the labor market in exactly the same as the minimum wage
Q3) Each of the following,except one,is an example of a nonmonetary job characteristic.Which is the exception?
A)the monthly wage
B)safety
C)potential for advancement
D)required physical exertion
E)leisure activities available in the surrounding community
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Capital and Financial Markets
Available Study Resources on Quizplus for this Chatper
114 Verified Questions
114 Flashcards
Source URL: https://quizplus.com/quiz/25746
Sample Questions
Q1) Stretchy Socks,Inc. ,is expected to earn $2,000,000 in after-tax profits each year forever.The interest rate is 0.1.What is the total value of all shares of stock in Stretchy Socks?
A)$1,818,182
B)$2,000,000
C)$16,528,926
D)$18,181,818
E)$20,000,000
Q2) The fact that the supply curve for a given firm's bond is vertical reflects the fact that
A)at any given point in time there are a fixed number of those bonds in existence. B)firms adjust the number of bonds they issue on a daily basis C)investors do not adjust their portfolios when interest rates change D)government limits the amount of bonds a company can issue
Q3) The supply curve for a particular bond is vertical.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 15: Economic Efficiency and the Competitive Ideal
Available Study Resources on Quizplus for this Chatper
80 Verified Questions
80 Flashcards
Source URL: https://quizplus.com/quiz/25747
Sample Questions
Q1) Economic efficiency requires that Pareto improvements still be possible.
A)True
B)False
Q2) At any quantity at which the demand curve lies above the supply curve,
A)economic efficiency is achieved
B)the cost of producing the last unit exceeds its value to some consumer
C)marginal cost exceeds the market price
D)the market is Pareto efficient
E)the value of the last unit to some consumer exceeds the cost of producing it
Q3) A welfare loss in a market
A)is the dollar difference between consumer surplus and producer surplus
B)is measured as the area above the market price and to the left of the market quantity
C)is the dollar value of potential benefits not achieved due to inefficiency in that market
D)is typically due to government intervention in that market
E)is typically minimized when a government sets a ceiling price
Q4) Economic efficiency requires all Pareto improvements to be made.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 16: Governments Role in Economic Efficiency
Available Study Resources on Quizplus for this Chatper
115 Verified Questions
115 Flashcards
Source URL: https://quizplus.com/quiz/25748
Sample Questions
Q1) A monopoly's
A)supply curve is the same as its marginal cost curve
B)supply curve is the same as its marginal revenue curve
C)marginal cost curve is downward sloping
D)demand curve is horizontal
E)marginal revenue curve is downward sloping
Q2) Negative externalities produce inefficiency but positive externalities do not.
A)True
B)False
Q3) If consumption of a good by one person imposes costs on a party other than the producer,
A)the consumption creates a positive externality
B)the good is a public good
C)the consumption creates a negative externality
D)too little of the good is produced from society's point of view
E)the market will correct the problem if left alone
Q4) Price-fixing agreements among competing firms are a violation of the Clayton Antitrust Act.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 19
Chapter 17: Comparative Advantage and the Gains From International Trade
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/25749
Sample Questions
Q1) If Country A can produce a good at a lower opportunity cost than Country B can, A)there are benefits from trade
B)Country A has an absolute advantage in producing the good
C)economic efficiency has been achieved
D)Country A does not have a comparative advantage in producing the good E)Country A can sell the good for a higher price abroad
Q2) International trade occurs whenever
A)two nations have achieved internal economic efficiency
B)one of the trading nations is self-sufficient
C)one nation can profit from trade at the expense of another
D)two nations can benefit from trading with each other
E)labor is cheaper in one country than in another
Q3) A tax that is imposed on each unit of an imported good is known as a(n)
A)quota
B)ad valorem quota
C)implicit quota
D)tariff
E)subsidy
To view all questions and flashcards with answers, click on the resource link above. Page 20