VEE MICROECONOMICS FINAL TEST 2026\2027.
The function for market demand of smart phones for a given year is given by the following
function:
Qsp^D = 1000 - Psp + 0.025I
Where Psp is the price of smart phones and I is the average consumer's annual income (in $).
Over the past year, 2,000 smart phones have been produced at a price of $500 apiece. If the
average income is $40,000, the market can most accurately be described as:
A. Having an excess supply of 500 smart phones
B. Being in equilibrium
C. Having an excess demand of 500 smart phones
Answer: A (Having an excess supply of 500 smart phones)
Qsp^D = 1000 - 500 + 0.025*40,000 = 1500
2000 - 1500 = 500 excess supply
At market equilibrium, total consumer surplus is most likely:
A. Positive
B. Negative
C. Zero
Answer: A (Positive)
The function for market demand of smart phones for a given year is given by the following
function:
Qsp^D = 1 - 0.001Psp + 0.000025I
Where Psp is the price of smart phones and I is the average consumer's annual income.
Keisha has an annual income of $30,000. If the smart phone price increases from $300 to $500,
how many fewer smart phones per year would Keisha purchase?
,VEE MICROECONOMICS FINAL TEST 2026\2027.
A. 0.2
B. 0.4
C. 0
D. 0.6
Answer: A (0.2)
Qsp^D = 1 - 0.001(300) + 0.000025(30,000) = 1.45
Qsp^D = 1 - 0.001(500) + 0.000025(30,000) = 1.25
1.45 - 1.25 = 0.2
The market for personal computers would most accurately be considered a:
A. Factor market
B. Intermediate market
C. Goods market
Answer: C (Goods market)
The market for labor would most accurately be considered a:
A. Factor market
B. Intermediate market
C. Goods market
Answer: A (Factor market)
During which auction do bidders learn the most information about each other's preferences?
A. Ascending price
B. Sealed bid
C. Dutch auction
Answer: A (Ascending price)
Equilibrium stability most typically refers to an equilibrium not changing if:
A. Prices change
B. The product changes
C. Demand functions change
Answer: A (Prices change)
The function for market demand of smart phones for a given year is given by the following
function:
, VEE MICROECONOMICS FINAL TEST 2026\2027.
Qsp^D = 1 - 0.001Psp + 0.000025I
Where Psp is the price of smart phones and I is the average consumer's annual income.
If Keisha has an annual income of $30,000, the vertical intercept of the demand curve is closest
to?
A. 1,750
B. 1,500
C. 1,215
Answer: A (1,750)
Qsp^D = 1 - 0.001Psp + 0.000025(30,000) = 1.75 - 0.001Psp
=> Psp = 1,750 - 1000Qsp^D
Unic Technology is a mainframe computer retailer. In an effort to increase profit, Unic increases
the price on their computers by 10%. Unfortunately, their market analysis was incorrect, and
more customers left than they expected. As a result, Unic decided its best option was to lower the
prices back to the original value. Upon doing so, all the customers returned.
This situation most accurately represents which economic principle:
A. Unstable equilibrium
B. Stable equilibrium
C. Partial equilibrium
Answer: B (Stable equilibrium)
The demand curve tends to have what type of slope?
A. Upward
B. Downward
C. Level
Answer: B (Downward)
What typically happens when there is excess supply?
A. Prices decrease
The function for market demand of smart phones for a given year is given by the following
function:
Qsp^D = 1000 - Psp + 0.025I
Where Psp is the price of smart phones and I is the average consumer's annual income (in $).
Over the past year, 2,000 smart phones have been produced at a price of $500 apiece. If the
average income is $40,000, the market can most accurately be described as:
A. Having an excess supply of 500 smart phones
B. Being in equilibrium
C. Having an excess demand of 500 smart phones
Answer: A (Having an excess supply of 500 smart phones)
Qsp^D = 1000 - 500 + 0.025*40,000 = 1500
2000 - 1500 = 500 excess supply
At market equilibrium, total consumer surplus is most likely:
A. Positive
B. Negative
C. Zero
Answer: A (Positive)
The function for market demand of smart phones for a given year is given by the following
function:
Qsp^D = 1 - 0.001Psp + 0.000025I
Where Psp is the price of smart phones and I is the average consumer's annual income.
Keisha has an annual income of $30,000. If the smart phone price increases from $300 to $500,
how many fewer smart phones per year would Keisha purchase?
,VEE MICROECONOMICS FINAL TEST 2026\2027.
A. 0.2
B. 0.4
C. 0
D. 0.6
Answer: A (0.2)
Qsp^D = 1 - 0.001(300) + 0.000025(30,000) = 1.45
Qsp^D = 1 - 0.001(500) + 0.000025(30,000) = 1.25
1.45 - 1.25 = 0.2
The market for personal computers would most accurately be considered a:
A. Factor market
B. Intermediate market
C. Goods market
Answer: C (Goods market)
The market for labor would most accurately be considered a:
A. Factor market
B. Intermediate market
C. Goods market
Answer: A (Factor market)
During which auction do bidders learn the most information about each other's preferences?
A. Ascending price
B. Sealed bid
C. Dutch auction
Answer: A (Ascending price)
Equilibrium stability most typically refers to an equilibrium not changing if:
A. Prices change
B. The product changes
C. Demand functions change
Answer: A (Prices change)
The function for market demand of smart phones for a given year is given by the following
function:
, VEE MICROECONOMICS FINAL TEST 2026\2027.
Qsp^D = 1 - 0.001Psp + 0.000025I
Where Psp is the price of smart phones and I is the average consumer's annual income.
If Keisha has an annual income of $30,000, the vertical intercept of the demand curve is closest
to?
A. 1,750
B. 1,500
C. 1,215
Answer: A (1,750)
Qsp^D = 1 - 0.001Psp + 0.000025(30,000) = 1.75 - 0.001Psp
=> Psp = 1,750 - 1000Qsp^D
Unic Technology is a mainframe computer retailer. In an effort to increase profit, Unic increases
the price on their computers by 10%. Unfortunately, their market analysis was incorrect, and
more customers left than they expected. As a result, Unic decided its best option was to lower the
prices back to the original value. Upon doing so, all the customers returned.
This situation most accurately represents which economic principle:
A. Unstable equilibrium
B. Stable equilibrium
C. Partial equilibrium
Answer: B (Stable equilibrium)
The demand curve tends to have what type of slope?
A. Upward
B. Downward
C. Level
Answer: B (Downward)
What typically happens when there is excess supply?
A. Prices decrease
