Microeconomic Theory Final Exam
Course Introduction
Microeconomic Theory explores the foundational principles governing individual decision-making, market interactions, and the allocation of resources. The course examines consumer behavior, the theory of the firm, market structures, and the functioning of competitive and non-competitive markets. Analytical frameworks such as utility maximization, cost minimization, and equilibrium analysis are employed to understand how prices are determined and how resources are distributed in various market settings. Students will also engage with concepts like elasticity, welfare analysis, and the impact of government policies on market outcomes, providing a solid groundwork for advanced economic study and real-world application.
Recommended Textbook
ECON MICRO 6th Edition by William A. McEachern
Available Study Resources on Quizplus
21 Chapters
4209 Verified Questions
4209 Flashcards
Source URL: https://quizplus.com/study-set/3107 Page 2
Chapter 1: The Art and Science of Economic Analysis
Available Study Resources on Quizplus for this Chatper
203 Verified Questions
203 Flashcards
Source URL: https://quizplus.com/quiz/61553
Sample Questions
Q1) Which of the following is an example of a normative economic statement?
A)If the money supply falls, interest rates will rise.
B)Teenage unemployment would be lower if there were no minimum wage.
C)The quantity of shirts sold increases as the price of shirts decreases.
D)The federal government's total spending should be reduced.
E)If interest rates go up, then fewer buildings will be constructed.
Answer: D
Q2) For an economist,marginal means _____
A)incremental.
B)unimportant.
C)level or size.
D)scarcity.
E)inferior.
Answer: A
Q3) One problem with rent control is that policymakers often ignore its secondary effects.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Economic Tools and Economic Systems
Available Study Resources on Quizplus for this Chatper
209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/61554
Sample Questions
Q1) Which of the following is not a gain from the division of labor?
A)Workers' abilities are matched to tasks.
B)Workers gain experience from the repetition of the tasks.
C)Workers save time by not moving to different tasks.
D)Workers' morale increases as tasks become more specialized.
E)The introduction of labor-saving machinery is possible.
Answer: D
Q2) Refer to Table 2.3,which shows the production possibilities frontier between the production of capital goods and consumer goods in an economy.What is the opportunity cost of producing 1 unit of capital goods at point B?
A)35 units of capital goods
B)15 units of consumer goods
C)13 units of consumer goods
D)7 units of consumer goods
E)5 units of consumer goods
Answer: A
Q3) Absolute advantage is based on opportunity cost.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Economic Decision Makers
Available Study Resources on Quizplus for this Chatper
227 Verified Questions
227 Flashcards
Source URL: https://quizplus.com/quiz/61555
Sample Questions
Q1) A family with an income of $25,000 pays $3,000 in taxes per year,and a family with an income of $50,000 pays $4,000 in taxes per year.The tax plan is:
A)regressive for income levels between $25,000 and $50,000.
B)proportional for income levels above $50,000.
C)progressive for all income levels below $25,000.
D)based on the benefits-received principle.
E)proportional for income levels between $25,000 and $50,000.
Answer: A
Q2) Trade restrictions can take any of the following forms except one.Which of the following is the exception?
A)Tariffs
B)Free trade agreements
C)Quotas
D)Voluntary trade restrictions
E)Health and safety restrictions
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Demand, supply, and Markets
Available Study Resources on Quizplus for this Chatper
206 Verified Questions
206 Flashcards
Source URL: https://quizplus.com/quiz/61556
Sample Questions
Q1) If demand increases and supply decreases in a market that is in equilibrium,the equilibrium quantity will _____
A)increase while the equilibrium price will remain unchanged.
B)remain unchanged while the equilibrium price will decrease.
C)increase only if the decrease in supply is more than the increase in demand.
D)increase only if the decrease in supply is less than the increase in demand.
E)increase only if the decrease in supply is more than the decrease in demand.
Q2) Which of the following situations indicates a shortage of a product in the market to suppliers?
A)The quantity supplied exceeds the quantity demanded at a particular price.
B)The quantity demanded decreases substantially.
C)The stock of inventories of most suppliers increases.
D)The quantity demanded exceeds the quantity supplied at a particular price.
E)The price of the product declines to an all-time low.
Q3) When a market is in equilibrium,_____
A)producers earn economic profits.
B)production exhibits diminishing returns to scale.
C)market forces exert no pressure for price to change.
D)industry output is maximized.
E)market forces allow producers to charge the maximum price.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Elasticity of Demand and Supply
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/61557
Sample Questions
Q1) If elasticity is the same everywhere along the curve and the elasticity value is unchanged,the demand curve _____
A)is a linear demand curve.
B)backward-bending curve.
C)is a constant-elasticity demand curve.
D)is a revenue curve.
E)has a different elasticity value at each point along the curve.
Q2) If demand is unit elastic,a price reduction will _____
A)increase revenues.
B)reduce revenues.
C)reduce total cost.
D)have no effect on revenues.
E)increase profits.
Q3) If quantity increases by 15 percent when prices decrease 5 percent,then elasticity for this product is _____
A)15.
B)10.
C)5.
D)3.
E)1.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Consumer Choice and Demand
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61558
Sample Questions
Q1) Suppose Sally allocates her budget between two goods,A and B.She spends her entire income on a combination of A and B,for which the ratio of the marginal utility of Good A to its price exceeds the ratio of the marginal utility of Good B to its price.She can increase her total utility by buying _____
A)more A and less B.
B)more B and less A.
C)more A without changing her consumption of B.
D)less B without changing her consumption of A.
E)more B and more A.
Q2) Tyrell has $50 to spend on Good A and Good B per week.The price of Good A is $5 and that of Good B is $4.He buys six units of Good A and five units of Good B.The marginal utility of the sixth unit of Good A is 25 units,and the marginal utility of the fifth unit of Good B is 20 units.Which of the following is true?
A)He is maximizing his utility.
B)His last dollar spent on Good A exceeds the last dollar spent on Good B.
C)He is not maximizing his utility and should buy more of Good A.
D)He is not maximizing his utility and should buy more of Good B.
E)He is not maximizing his utility because he is not spending all of his income.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Production and Cost in the Firm
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61559
Sample Questions
Q1) Suppose a soccer coach has been making $25,000 per year but gives up his coaching job in order to make soccer shoes.If his revenue from the sale of these shoes is $50,000 and his materials cost $20,000,then his economic profit is equal to _____
A)$5,000.
B)$25,000.
C)$30,000.
D)$50,000.
E)$80,000.
Q2) A firm's accounting profit is equal to _____
A)total revenue minus opportunity costs.
B)total revenue plus opportunity costs.
C)total revenue minus imputed costs.
D)total revenue minus explicit costs.
E)total revenue minus explicit and implicit costs.
Q3) If marginal product is negative,total product must be negative.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Perfect Competition
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/61560
Sample Questions
Q1) A perfectly competitive firm is allocatively efficient because price is identical to marginal cost at every quantity.
A)True
B)False
Q2) At its present rate of output,Barrel O' Biscuits,a perfectly competitive firm,finds that its marginal cost exceeds its marginal revenue and its price exceeds its average variable cost.To maximize profit,the firm should _____
A)lower the price.
B)increase the price.
C)increase output.
D)decrease output.
E)produce at its current level of output.
Q3) If a perfectly competitive firm raises its price,its sales decrease to zero.
A)True
B)False
Q4) After an increase in demand in a constant-cost industry,the long-run average cost curves of firms shift upward.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Monopoly
Available Study Resources on Quizplus for this Chatper
197 Verified Questions
197 Flashcards
Source URL: https://quizplus.com/quiz/61561
Sample Questions
Q1) Refer to Exhibit 9.16,which shows the cost and revenue curves faced by a monopolist.If this monopolist practices perfect price discrimination,the maximum amount consumers are willing to pay for that unit is _____
A) a.
B) c.
C) e.
D) area aec.
E) zero.
Q2) A monopolist is said to have market power because _____
A)it faces an upward-sloping marginal cost curve.
B)it faces a downward-sloping demand curve.
C)it always earns positive profit both in the short run and the long run.
D)it charges a fixed price for its products.
E)it faces a high marginal cost of production.
Q3) Anything that prevents new firms from competing on an equal basis with existing firms in an industry is called a barrier to entry.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Monopolistic Competition and Oligopoly
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/61562
Sample Questions
Q1) Suppose a monopolistically competitive firm is earning an economic profit.The marginal revenue from selling an additional unit is $30,and the marginal cost of producing that additional unit is $23.The firm should _____
A)change neither its price nor its output level.
B)reduce its price and increase its output level.
C)increase its price and reduce its output level.
D)reduce both its price and its output level.
E)increase both its price and its output level.
Q2) Which of the following is not considered a barrier to entry?
A)economies of scale
B)patents
C)control of a scarce resource
D)licensing
E)perfect price discrimination
Q3) Firms will always achieve dominant-strategy equilibrium if game theory is used to analyze oligopoly.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Resource Markets
Available Study Resources on Quizplus for this Chatper
197 Verified Questions
197 Flashcards
Source URL: https://quizplus.com/quiz/61563
Sample Questions
Q1) Which of the following can lead to temporary differentials in resource prices?
A)an increase in the demand for a product produced by the resource
B)differences in the inherent qualities of resources
C)differences in the time and money involved in developing necessary skills
D)differences in the nonmonetary rewards of a job
E)differences in the prices of similar resources
Q2) A firm hires labor in a perfectly competitive labor market.If the wage rate is $44,the firm should hire _____
A)44 workers.
B)all units of labor whose marginal product is 44.
C)all units of labor whose marginal revenue product is $44.
D)all units of labor whose marginal revenue product is greater than or equal to $44.
E)all units of labor whose marginal revenue product is less than or equal to $44.
Q3) For a resource in a perfectly competitive resource market,marginal revenue product is equal to the price of the resource.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Labor Markets and Labor Unions
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/61564
Sample Questions
Q1) The unions of plumbers and carpenters are examples of industrial unions.
A)True
B)False
Q2) Other things equal,the supply of labor will be lower for a job that _____
A)is prestigious.
B)offers valuable on-the-job training.
C)requires advanced skills or education.
D)provides a climate-controlled work environment.
E)allows for flexible work schedules.
Q3) The highest union membership rates in the United States are _____
A)among middle-aged men.
B)among middle-aged women.
C)among service workers in the public sector.
D)in the service industries.
E)in high-technology industries.
Q4) Collective bargaining is the process by which a labor union and a firm negotiate an employment contract.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Capital, interest, entrepreneurship, and Corporate Finance
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61565
Sample Questions
Q1) Other things constant,the interest rate usually _____
A)increases with the duration of the loan.
B)decreases with the duration of the loan.
C)decreases as risk increases.
D)increases as risk decreases.
E)is constant and does not float.
Q2) Intellectual property is _____
A)a special form of capital.
B)a type of labor.
C)a special type of service.
D)cheap to produce, but expensive to transmit.
E)a kind of entrepreneurial ability.
Q3) If the annual interest rate is 4 percent,a consumer who spends $100 today _____
A)will have to return $104 to a bank.
B)will have to pay $104 next year to get the same set of goods.
C)will receive $96 from a bank next year.
D)will have to pay $96 next year to get the same set of goods.
E)is giving up the ability to spend $104 on goods next year.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Transaction Costs, asymmetric Information, and Behavioral Economics
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61566
Sample Questions
Q1) The statement "It doesn't hurt to get more information" holds true _____
A)especially when the opportunity cost of acquiring the information is high.
B)when information is less than perfect.
C)only if the marginal benefit of information is greater than the marginal cost of information.
D)only if the marginal benefit of information is equal to the marginal cost of information.
E)only if the marginal benefit of information is less than the marginal cost of information.
Q2) The asymmetric information problem arises when _____
A)the problem of the winner's curse occurs.
B)the marginal cost curve for information becomes horizontal.
C)the demand for the good will be price inelastic.
D)one side of the market has more information than the other side.
E)the marginal benefit of search curve becomes vertical.
Q3) An employer faces the problem of adverse selection while recruiting an employee for a job that requires intangible or immeasurable abilities.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Economic Regulation and Antitrust Policy
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/61567
Sample Questions
Q1) Governments often enact regulations that benefit producers because _____
A)they seek to regulate in the best interest of the public.
B)consumers have less information than producers and therefore seek government protection.
C)consumers have a strong interest in matters that affect their standard of living.
D)producers lobby, as they have a strong interest in matters that affect their specialized source of income.
E)producers seek to act in the best interest of the public.
Q2) A requirement that buyers of one service must also purchase another service from the same seller is called _____
A)exclusive dealing.
B)an interlocking merger.
C)a vertical merger.
D)a tying contract.
E)a legal agreement.
Q3) The Sherman Antitrust Act makes it unlawful for firms to collude to restrain trade.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
17
Chapter 16: Public Goods and Public Choice
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/61568
Sample Questions
Q1) Special-interest groups _____
A)increase inefficiency through poor allocation of resources in the economy.
B)increase efficiency through the redistribution of resources in the economy.
C)are efficient because of the marginal benefit to society.
D)are productive because they reduce the price level in an economy.
E)are unproductive because they raise the price level in an economy.
Q2) A good that is neither rival nor exclusive is called a(n)_____
A)private good.
B)public good.
C)quasi-private good.
D)external good.
E)open-access good.
Q3) "Voting with feet" describes _____
A)voters leaving a jurisdiction if they believe government is efficient.
B)voters leaving a jurisdiction if they believe government is inefficient.
C)pork-barrel spending.
D)competing-interest legislation.
E)special-interest legislation.
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Externalities and the Environment
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/61569
Sample Questions
Q1) A metal-stamping factory moves next to a day care center.Noise from the factory makes it impossible for the kids to nap.It would cost the factory $5 million to move,and it would cost the day care center $1 million to move.Sound insulation for the factory costs $1 million,while insulation for the day care center costs $200,000.The court initially determines that the day care center has the property right.But,on appeal,the factory is awarded the property right.Which of the following is likely to be true according to the Coase theorem?
A)The day care center would buy the insulation, a result consistent with the Coase theorem.
B)The factory would buy the insulation, a result consistent with the Coase theorem.
C)The factory would buy the insulation for the day care center, a result consistent with the Coase theorem.
D)The day care center would buy the insulation for the factory, a result inconsistent with the Coase theorem.
E)The day care center would move instead of buying insulation, a result consistent with the Coase theorem.
To view all questions and flashcards with answers, click on the resource link above.
Page 19
Chapter 18: Poverty and Redistribution
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/61570
Sample Questions
Q1) In some cases,welfare benefits ____
A)encourage people to become self-employed.
B)encourage more labor market activity.
C)exceed the income resulting from full-time employment.
D)increase total family income if the marginal tax rate exceeds 100 percent.
E)tend to increase welfare benefits as more income is earned up to the "means-test" threshold.
Q2) The requirement that firms doing business with the federal government set numerical hiring,promotion,and training goals was meant to _____
A)increase the income level of households headed by women.
B)lower the disparity in wages between white and black workers.
C)increase the demand for skilled labor.
D)organize the unskilled labor force and help them form labor unions.
E)protect the rights of workers affiliated to labor unions.
Q3) One of the reasons why household incomes differ is that the number of household members who are working differs.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 20
Chapter 19: International Trade
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/61571
Sample Questions
Q1) Regional trading bloc agreements _____
A)are not considered trade restrictions.
B)are required by World Trade Organization rules.
C)exist primarily in Russia, Africa, and South America.
D)require all nations in a specified region to trade only with other countries in the same geographic area.
E)make special trade deals between countries in that region and discriminate against countries outside the region.
Q2) When a country imposes a per-unit tariff on an imported good or service,_____
A)the price that domestic consumers pay for the import falls.
B)the quantity of the good or service imported into the country declines.
C)the quantity of the good or service imported into the country increases.
D)the price at which any supplier can sell output in the world market decreases.
E)the quantity of the good or service demanded by the consumers increases.
Q3) Japan is generally considered a closed economy.
A)True
B)False
Q4) A tariff is a tax on either imports or exports.
A)True
B)False
Page 21
To view all questions and flashcards with answers, click on the resource link above.
Chapter 20: International Finance
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/61572
Sample Questions
Q1) The exchange rate is the price of a currency in terms of another currency for exchanges of goods and services but not for financial transactions.
A)True
B)False
Q2) Any increase in the supply for foreign exchange,other things constant,will _____
A)reduce the number of foreign exchange units required to purchase dollars.
B)reduce the number of dollars required to purchase one unit of foreign exchange.
C)cause the dollar to depreciate.
D)cause the foreign currency to appreciate.
E)have no effect.
Q3) As the price of foreign exchange decreases relative to the U.S.dollar,the _____
A)products made in the United States become cheaper for foreigners.
B)goods made in foreign countries become cheaper for Americans.
C)amount of foreign currency required to purchase a unit of U.S. dollar increases.
D)U.S. demand curve for foreign exchange shifts to the right.
E)supply curve of foreign exchange to U.S. markets decreases.
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Economic Development
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/61573
Sample Questions
Q1) Which of the following is true of bilateral funding?
A)It is provided by the World Bank only.
B)It is tied to the purchase of goods and services from donor countries.
C)It includes grants and loans that are extended at very high interest rates.
D)It is provided by the International Monetary Fund only.
E)It is provided by philanthropic organizations.
Q2) In 2014,high-income economies with only about one-fifth of the world's population produced more than half of the world's output.
A)True
B)False
Q3) In 2016,middle-income economies made up _____ of the world's population,but accounted for _____ of world output.
A)84 percent; 36 percent
B)16 percent; 64 percent
C)46 percent; 70percent
D)12 percent; 2 percent
E)70 percent; 46 percent
To view all questions and flashcards with answers, click on the resource link above. Page 23