Microeconomics Exam Bank
Course Introduction
Microeconomics is the branch of economics that analyzes the behavior and decision-making processes of individual agents, such as consumers, firms, and governments, within specific markets. This course explores fundamental concepts including supply and demand, market equilibrium, elasticity, consumer choice theory, production and costs, and various market structures such as perfect competition, monopoly, and oligopoly. Students will develop an understanding of how resources are allocated, how prices are determined, and how market participants respond to incentives, enabling them to critically evaluate real-world economic issues and policies from a micro-level perspective.
Recommended Textbook
Microeconomics 4th Edition by David Besanko
Available Study Resources on Quizplus
17 Chapters
1037 Verified Questions
1037 Flashcards
Source URL: https://quizplus.com/study-set/2902 Page 2
Chapter 1: Analyzing Economic Problems
Available Study Resources on Quizplus for this Chatper
48 Verified Questions
48 Flashcards
Source URL: https://quizplus.com/quiz/57803
Sample Questions
Q1) Comparative statics
A) examines how exogenous variables change as endogenous factors change.
B) examines how endogenous variables change as exogenous factors change.
C) presents a comparison of two separate markets at a single point in time.
D) is often rendered useless because exogenous variables can never be expected to remain constant for long.
Answer: B
Q2) Which of the following represents an example of normative analysis?
A) How will the equilibrium price of coffee be affected by drought?
B) How will a government subsidy affect the quantity demanded of public housing?
C) What is the best method for allocating tax revenues?
D) How will a tax cut affect a typical consumer's disposable income?
Answer: C
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Demand and Supply Analysis
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/57804
Sample Questions
Q1) If demand is elastic,an increase in price
A) will increase total revenue
B) will decrease total revenue
C) will have an indeterminate effect on total revenue
D) will decrease total profit
Answer: B
Q2) An income elasticity of demand for milk of 0.1 could mean that
A) as income rises by 10 percent, quantity demanded rises by 1 percent.
B) as income rises by 100 percent, quantity demanded rises by 1 percent.
C) as income rises by 20 percent, quantity demanded rises by 10 percent.
D) as income rises by 50 percent, quantity demanded rises by 25 percent.
Answer: A
Q3) What is the elasticity of the following demand curve? QP<sup>2</sup> = 100 Answer: \(\varepsilon\)<sub>Q,P</sub> = -2.
To view all questions and flashcards with answers, click on the resource link above.
4
Chapter 3: Consumer Preferences and the Concept of Utility
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/57805
Sample Questions
Q1) An indifference curve represents
A) a two-dimensional "slice" of a three-dimensional total utility function.
B) varying levels of a total utility function.
C) constant marginal utility.
D) the slope of marginal utility.
Answer: A
Q2) Which of the following statements is false?
A) Marginal utility may be negative.
B) Marginal utility is the slope of total utility.
C) If the more is better assumption is satisfied, total utility will increase as consumption increases.
D) If the more is better assumption is satisfied, the marginal utility from consuming the second unit must be greater than the marginal utility from consuming the first unit.
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: Consumer Choice
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/57806
Sample Questions
Q1) If food is on the x-axis and clothing is on the y-axis,using the information in problem 1 above, the consumer is at the A) point of maximum indifference.
B) y-intercept.
C) interior of the budget constraint. D) origin.
Q2) A corner point solution is always the optimum for a consumer when A) a unique point of tangency exists between the consumer's indifference curve and the budget line
B) the consumer has straight line (constant slope) indifference curves
C) there is no unique point of tangency between the consumer's indifference curves and the budget line and the consumer does not have straight line indifference curves. D) the consumer is indifferent to both goods equally.
Q3) Suppose all prices double and income triples.The budget line
A) will become steeper.
B) will become flatter.
C) will shift in toward the origin.
D) will shift out from the origin.
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: The Theory of Demand
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/57807
Sample Questions
Q1) Which of the following is held constant along an income-consumption curve?
A) Income.
B) Consumption of all goods.
C) The price of all goods other than the good of interest.
D) The prices of all goods.
Q2) One way to measure the opportunity cost of an hour of leisure is
A) the wage rate that an individual could earn for that hour.
B) the cost of going to a restaurant every evening to eat.
C) the cost of visiting a museum just for fun.
D) the cost of the cleaning service that I hire to clean my house because I work 50 hours per week.
Q3) One way of thinking of consumer surplus might be described as
A) the total value of the sum of the difference of all consumers' willingness to pay for an item relative to the actual cost of the item in the market.
B) the excess amount that consumers earn relative to the poverty line.
C) the level of satisfaction that consumers reach from consuming an item.
D) the excess of consumer demand relative to supply.
To view all questions and flashcards with answers, click on the resource link above.
Page 7
Chapter 6: Inputs and Production Functions
Available Study Resources on Quizplus for this Chatper
70 Verified Questions
70 Flashcards
Source URL: https://quizplus.com/quiz/57808
Sample Questions
Q1) The rate at which one input can be exchanged for another input without altering the level of output is called the
A) marginal product curve.
B) average product curve.
C) marginal rate of technical substitution.
D) law of diminishing marginal productivity.
Q2) Given the production function Q = L<sup>2</sup>,calculate the average product of labor for L = 2,and also calculate the marginal product of labor between L = 1 and L = 2.
A) The average product of labor is 2 and the marginal product of labor is 2.
B) The average product of labor is 1 and the marginal product of labor is 3.
C) The average product of labor is 3 and the marginal product of labor is 2.
D) The average product of labor is 2 and the marginal product of labor is 3.
Q3) Factors of production are
A) inputs and outputs.
B) outputs only
C) inputs only
D) the minimum set of inputs that can produce a certain fixed quantity of output.
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Costs and Cost Minimization
Available Study Resources on Quizplus for this Chatper
64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/57809
Sample Questions
Q1) The "equal bang per buck" condition refers to the firm equating A) marginal revenue with marginal cost.
B) the marginal productivity of the last dollar spent on labor with the marginal productivity of the last dollar spent on capital.
C) the marginal productivity of capital with the marginal productivity of labor.
D) the cost of capital with the cost of labor.
Q2) Sunk costs do not
A) matter.
B) affect business shutdown decisions.
C) affect business start-up decisions.
D) cost as much as marginal costs.
Q3) A small business owner is planning to purchase a new office computer for $1,000.The opportunity cost of purchasing this computer is
A) $900
B) $1,000
C) $1,100
D) Unknown, since we don't know the owner's next best alternative.
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Cost Curves
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/57810
Sample Questions
Q1) For a firm,let total cost be TC(Q) = 160+10Q<sup>2</sup> and marginal cost be MC(Q) = 20Q.What is the minimum efficient scale for this firm?
A) 0
B) 2
C) 4
D) indeterminate
Q2) When the output elasticity of total cost is less than one,
A) Marginal cost is less than average cost and average cost decreases as Q increases.
B) Marginal cost is less than average cost and average cost increases as Q increases.
C) Marginal cost is greater than average cost and average cost decreases as Q increases.
D) Marginal cost is greater than average cost and average cost increases as Q increases.
To view all questions and flashcards with answers, click on the resource link above.
10
Chapter 9: Perfectly Competitive Markets
Available Study Resources on Quizplus for this Chatper
57 Verified Questions
57 Flashcards
Source URL: https://quizplus.com/quiz/57811
Sample Questions
Q1) Identify the truthfulness of the following statements. I.Economic rent may equal economic profit.
II.Economic rent may exceed economic profit.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.
Q2) Which of the following is not a characteristic of perfect competition?
A) The industry is fragmented.
B) Firms produce undifferentiated products.
C) Consumers have imperfect information.
D) Firms have equal access to resources.
Q3) Economic rent can be defined as
A) always the same as economic profit.
B) the maximum amount that firms would be willing to pay for a fixed input.
C) the minimum amount that firms actually have to pay for a fixed input.
D) the difference between the maximum amount that firms would be willing to pay for a fixed input and the minimum amount that firms actually have to pay for that input.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Competitive Markets
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/57812
Sample Questions
Q1) In a perfectly competitive market,an import quota
A) sets a minimum level of production that domestic firms must produce.
B) sets a minimum level of imports for a country.
C) sets a maximum level of production that domestic firms may produce.
D) sets a maximum level of imports into a country.
Q2) The domestic market for calculators is perfectly competitive and is in equilibrium.Domestic demand is given by Q<sup>d</sup> = 100 - P and domestic supply is given by Q<sup>s</sup> = 4P.The world price for calculators is $10.How many units of calculators will be imported?
A) 0
B) 10
C) 30
D) 50
Q3) **Suppose the government sets a price ceiling of $50 in this market.What is the minimum level of deadweight loss with the price ceiling?
A) 7,500
B) 3,750
C) 1,875
D) 937.50
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Monopoly and Monopsony
Available Study Resources on Quizplus for this Chatper
66 Verified Questions
66 Flashcards
Source URL: https://quizplus.com/quiz/57813
Sample Questions
Q1) When comparing a monopoly with a perfectly competitive equilibrium,moving from a situation of perfect competition to monopoly leads to a
A) deadweight gain.
B) deadweight loss.
C) net economic benefit.
D) welfare improvement.
Q2) As a monopolist's demand curve becomes more inelastic,
A) the profit-maximizing price goes up.
B) the profit-maximizing price goes down.
C) the optimal mark-up of price over marginal cost goes down.
D) average revenue falls.
Q3) A monopoly market is one with
A) one buyer and one seller.
B) one buyer and many sellers.
C) many buyers and one seller.
D) many buyers and many sellers.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Capturing Surplus
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/57814
Sample Questions
Q1) *If the firm does not bundle the products,what single price should the firm charge for product A to maximize profit?
A) 500
B) 800
C) 900
D) 1,000
Q2) The reason that profit-maximizing firms willingly incur the added expense of advertising is that they hope that successful advertising will increase profits by
A) increasing average costs.
B) increasing marginal costs.
C) increasing supply.
D) increasing demand.
Q3) *If the firm bundles the products,what single price should the firm charge for the bundle to maximize profit?
A) 600
B) 800
C) 1,000
D) 1,200
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Market Structure and Competition
Available Study Resources on Quizplus for this Chatper
61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/57815
Sample Questions
Q1) All of the following statements are true except:
A) Perfect competition can only exist in industries with a large number of firms.
B) A monopoly market structure cannot exist in an industry with an undifferentiated product.
C) Monopolistic competition implies that each firm has some ability to differentiate its product.
D) Oligopoly can exist in industries with differentiated and undifferentiated products.
Q2) What of the following is completely true in long run,monopolistically competitive equilibrium?
A) the slope of the demand and average cost curves are the same, P = MC, and MC = MR.
B) the slope of the demand and average cost curves are negative, P > MC, and MC > MR
C) the slope of the demand and average cost curves are positive, P > MC, and MC = MR
D) the slope of the demand and average cost curves are the same, P > MC, and MC = MR.
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Game Theory and Strategic Behavior
Available Study Resources on Quizplus for this Chatper
51 Verified Questions
51 Flashcards
Source URL: https://quizplus.com/quiz/57816
Sample Questions
Q1) *In Game 6 above,
A) Player A choosing A1 and Player B choosing B1 is a Nash equilibrium.
B) Player A choosing A2 and Player B choosing B2 is a Nash equilibrium.
C) there is no Nash equilibrium.
D) there are multiple Nash equilibria in pure strategies.
Q2) Pure strategy
A) is a specific choice of a strategy from the player's possible strategies in the game, whereas a mixed strategy is a choice between quantity and price optimization.
B) is a specific choice of a strategy outside of the player's possible strategies in the game, whereas a mixed strategy is a choice among two or more pure strategies according to pre-specified probabilities.
C) is a specific choice of a strategy outside of the player's possible strategies in the game, whereas a mixed strategy is a choice between quantity and price optimization.
D) is a specific choice of a strategy from the player's possible strategies in the game, whereas a mixed strategy is a choice among two or more pure strategies according to pre-specified probabilities.
To view all questions and flashcards with answers, click on the resource link above.
16
Chapter 15: Risk and Information
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/57817
Sample Questions
Q1) Consider four lotteries,A,B,C,and D,all with an expected value of $100.The associated standard deviations of the lotteries are: A is 10,B is 15,C is 5,and D is 20.Which lottery is the riskiest?
A) Lottery A
B) Lottery B
C) Lottery C
D) Lottery D
Q2) A decision tree is
A) a diagram that describes the options available to a decision marker as well as the certain events that can occur at each point in time.
B) a diagram that helps the observer calculate the expected value, variance and standard deviation of a probability distribution.
C) not applicable to making decisions under conditions of uncertainty.
D) a diagram that describes the options available to a decision marker as well as the risky events that can occur at each point in time.
To view all questions and flashcards with answers, click on the resource link above.
17
Chapter 16: General Equilibrium Theory
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/57818
Sample Questions
Q1) Identify the truthfulness of the following statements. I.If country A has a comparative advantage over country B in the production of good X,then the opportunity cost of producing good X in country A is lower than in country B.
II.If country A has a comparative advantage over country B in the production of good X,then country A cannot gain from trade with country B.
A) Both I and II are true.
B) Both I and II are false.
C) I is true; II is false.
D) I is false; II is true.
Q2) The input contract curve represents:
A) All consumption good allocations in an Edgeworth box that are exchange efficient.
B) all input allocations in an Edgeworth box for inputs that are input efficient.
C) All possible combinations of consumption goods that can be produced in an economy given the economy's available supply of inputs.
D) the different combinations of capital and labor inputs that will produce a given level of output for a particular good.
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Externalities and Public Goods
Available Study Resources on Quizplus for this Chatper
55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/57819
Sample Questions
Q1) Suppose a particular national park imposes a voluntary contribution system for entrants of the park.It is suggested that all entrants pay something and there is an estimate given that $5 per user on average will be sufficient to pay for the expenses of maintaining the park.It is most likely that
A) everybody that enters the park will pay a sufficient amount to make sure that expenses are covered.
B) nobody who uses the park will contribute anything and the expenses will not be covered.
C) some users of the park will not pay anything and will act as trespassers.
D) some users of the park will not pay anything and will act as free riders.
Q2) Which of the following is a key feature of a public good?
A) The good is rival in its consumption, but a consumer cannot be excluded from the good.
B) The good is non-rival in its consumption and a consumer cannot be excluded from the good.
C) The good is non-rival in its consumption, but a consumer can be excluded from the good.
D) The good is rival in its consumption and a consumer can be excluded from the good.
To view all questions and flashcards with answers, click on the resource link above.
Page 19