Quiz about MicroEconomics, Theory and Applications 1

Question 1

The law of demand states that an increase in the price of a good:

Accepted Answer

decreases the quantity demanded for that good.

Answer

increases the supply of that good.

Answer

increases the quantity supplied of that good.

Answer

none of these answers.

Question 2

The law of supply states that an increase in the price of a good:

Accepted Answer

increases the quantity supplied of that good.

Answer

none of these answers.

Answer

decreases the demand for that good.

Answer

decreases the quantity demanded for that good.

Question 3

If an increase in consumer incomes leads to a decrease in the demand for camping equipment,
then camping equipment is:

Accepted Answer

a substitute good

Answer

a normal good.

Answer

an inferior good.

Answer

a complementary good.

Question 4

Which of the following shifts the demand for watches to the right?

Accepted Answer

a decrease in the price of watch batteries if watch batteries and watches are complements

Answer

an increase in the price of watches

Answer

none of these answers

Answer

a decrease in consumer incomes if watches are a normal good

Question 5

An inferior good is one for which an increase in income causes a(n)

Accepted Answer

decrease in demand.

Answer

decrease in supply.

Answer

increase in demand.

Answer

increase in supply.

Question 6

If a small percentage increase in the price of a good greatly reduces the quantity demanded
for that good, the demand for that good is

Accepted Answer

price elastic.

Answer

income inelastic.

Answer

price inelastic.

Answer

unit price elastic.

Question 7

The price elasticity of demand is defined as

Accepted Answer

the percentage change in the quantity demanded of a good divided by the percentage change in the price of that good.

Answer

the percentage change in the quantity demanded divided by the percentage change in income.

Answer

the percentage change in income divided by the percentage change in the quantity demanded.

Answer

the percentage change in price of a good divided by the percentage change in the quantity demanded of that good.

Question 8

In general, a flatter demand curve is more likely to be:

Accepted Answer

price elastic

Answer

unit price elastic

Answer

none of these answers

Answer

price inelastic.

Question 9

In general, a steeper supply curve is more likely to be

Accepted Answer

price inelastic

Answer

price elastic

Answer

none of these answers

Answer

unit price elastic

Question 10

Which of the following would cause a demand curve for a good to be price inelastic?

Accepted Answer

the good is a necessity

Answer

the good is a luxury

Answer

there are a great number of substitutes for the good

Answer

the good is an inferior good

Practice Test On: MicroEconomics, Theory and Applications 1

Practice Test On:
MicroEconomics, Theory and Applications 1