1
Microeconomics Final Exam
With Correct Questions and
Detailed Answers | Graded A+
(unit 2)
A downward sloping demand curve can be explained by
I. diminishing marginal utility
II. diminishing marginal returns
III. the substitution effect
IV. the income effect - Correct Answer-I, III, and IV only
Which of the following will not change the demand for oranges? - Correct Answer-A
change in the price of oranges
If there is an increase in demand for a good, what will most likely happen to the price
and quantity of the good exchanged? - Correct Answer-Price increase, Quantity increase
If hot dogs are an inferior good, an increase in income will result in - Correct Answer-a
decrease in demand for hot dogs
An increase in the price of gasoline will cause the demand curve for tires to shift in
which direction? - Correct Answer-To the left, because gasoline and tires are
complements
Assume that coal is a normal good. If the price of coal increases and the quantity sold
increases, which of the following is consistent with these observations? - Correct
Answer-The price of oil increased, oil and coal being substitutes
During a football game, it starts to rain and the temperature drops. The senior class,
which runs the concession stand and is studying economics, reaises the price of coffee
from 50 cents to 75 cents a cup. They sell more than ever before. Which answer explains
this? - Correct Answer-The demand for coffee increased.
Which of the following statements best reflects the law of diminishing marginal utility?
- Correct Answer-"I couldn't eat another doughnut if you paid me."
1
, 2
Which of the following will not cause the demand curve for athletic shoes to shift? -
Correct Answer-A decrease in the price of athletic shoes
Assume that the demand for apples is downward sloping. If the price of apples falls
from $.80 to $.65 per pound, which of the following will occur? - Correct Answer-A
larger quantity of apples will be demanded
On the graph above, what area represents consumer surplus when the price is $10? -
Correct Answer-C
If the cost of producing automobiles increases, equilibrium quantity and consumer
surplus will most likely change in which of the following ways? - Correct Answer-Price
increase, Quantity decrease, Consumer Surplus decrease
Compare with 2000 and 2001. Which of the following statements is (are) true?
I. Demand has increased
II. Quantity demanded has increased
III. Supply has increased
IV. Quantity supplied has increased
V. Supply has decreased - Correct Answer-I and IV only
Producer surplus is the - Correct Answer-amount the seller is paid less the cost of
production
During the 1990s, the price of VCRs fell by about 30%, and quantity sold decreased by
the same amount. The demand for VCRs must - Correct Answer-have shifted to the left
Which of the following will occur if a legal price floor is placed on a good below its free-
market equilibrium? - Correct Answer-The equilibrium price will ration the good
A marketing survey shows that gate receipts would increase if the price of tickets to a
summer rock concert increased, even though the number of tickets sold would fall.
What does this imply about the price elasticity of demand for concert tickets? - Correct
Answer-Demand is inelastic
According to the graph above, which of the following will occur if a legal price ceiling is
imposed at price X? - Correct Answer-Shortages will occur
Which of the following statements about price controls is true? - Correct Answer-Price
ceilings and price floors result in a misallocation of resources
2
Microeconomics Final Exam
With Correct Questions and
Detailed Answers | Graded A+
(unit 2)
A downward sloping demand curve can be explained by
I. diminishing marginal utility
II. diminishing marginal returns
III. the substitution effect
IV. the income effect - Correct Answer-I, III, and IV only
Which of the following will not change the demand for oranges? - Correct Answer-A
change in the price of oranges
If there is an increase in demand for a good, what will most likely happen to the price
and quantity of the good exchanged? - Correct Answer-Price increase, Quantity increase
If hot dogs are an inferior good, an increase in income will result in - Correct Answer-a
decrease in demand for hot dogs
An increase in the price of gasoline will cause the demand curve for tires to shift in
which direction? - Correct Answer-To the left, because gasoline and tires are
complements
Assume that coal is a normal good. If the price of coal increases and the quantity sold
increases, which of the following is consistent with these observations? - Correct
Answer-The price of oil increased, oil and coal being substitutes
During a football game, it starts to rain and the temperature drops. The senior class,
which runs the concession stand and is studying economics, reaises the price of coffee
from 50 cents to 75 cents a cup. They sell more than ever before. Which answer explains
this? - Correct Answer-The demand for coffee increased.
Which of the following statements best reflects the law of diminishing marginal utility?
- Correct Answer-"I couldn't eat another doughnut if you paid me."
1
, 2
Which of the following will not cause the demand curve for athletic shoes to shift? -
Correct Answer-A decrease in the price of athletic shoes
Assume that the demand for apples is downward sloping. If the price of apples falls
from $.80 to $.65 per pound, which of the following will occur? - Correct Answer-A
larger quantity of apples will be demanded
On the graph above, what area represents consumer surplus when the price is $10? -
Correct Answer-C
If the cost of producing automobiles increases, equilibrium quantity and consumer
surplus will most likely change in which of the following ways? - Correct Answer-Price
increase, Quantity decrease, Consumer Surplus decrease
Compare with 2000 and 2001. Which of the following statements is (are) true?
I. Demand has increased
II. Quantity demanded has increased
III. Supply has increased
IV. Quantity supplied has increased
V. Supply has decreased - Correct Answer-I and IV only
Producer surplus is the - Correct Answer-amount the seller is paid less the cost of
production
During the 1990s, the price of VCRs fell by about 30%, and quantity sold decreased by
the same amount. The demand for VCRs must - Correct Answer-have shifted to the left
Which of the following will occur if a legal price floor is placed on a good below its free-
market equilibrium? - Correct Answer-The equilibrium price will ration the good
A marketing survey shows that gate receipts would increase if the price of tickets to a
summer rock concert increased, even though the number of tickets sold would fall.
What does this imply about the price elasticity of demand for concert tickets? - Correct
Answer-Demand is inelastic
According to the graph above, which of the following will occur if a legal price ceiling is
imposed at price X? - Correct Answer-Shortages will occur
Which of the following statements about price controls is true? - Correct Answer-Price
ceilings and price floors result in a misallocation of resources
2
