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Multiple Choice Quiz
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1
Economies that use both individual decision making and the behaviors of buyers and sellers to allocate resources are known as:
A)Centrally planned economies
B)Market economies
C)Mixed economies
D)None of the above
2
An increase in the price of a good causes buyers to buy less of the good and more of substitute goods. This is known as the:
A)Income effect
B)Substitution effect
C)Normal good effect
D)Low hanging fruit principle
3
A supplier is willing to sell a good in the market if:
A)Price is greater than opportunity cost
B)Price is greater than average cost
C)Price is greater than total cost
D)Opportunity cost is greater than price
4
Which of the following factors causes a shift in the supply curve?
A)Price of the good
B)Preferences
C)Change in technology
D)Number of buyers in the market
5
When the government sets a minimum wage that is above the equilibrium wage, this represents an example of a___________, and results in____________.
A)Price ceiling; unemployment
B)Price floor; shortage of labor supply
C)Price ceiling; shortage of labor supply
D)Price floor; unemployment
6
An increase in supply and an increase in demand will result in:
A)Equilibrium price increasing
B)Equilibrium quantity increasing
C)Equilibrium price decreasing
D)Equilibrium quantity decreasing
7
Which of the following is most likely to result from a war in the Middle East?
A)An increase in the supply of oil
B)A decrease in the demand for oil
C)An increase in the equilibrium price of oil
D)A decrease in the equilibrium price of oil
8
What is likely to happen to the market for public transportation (inferior good) if income increases?
A)Equilibrium price will decrease and equilibrium quantity will decrease
B)Equilibrium price will increase and equilibrium quantity will decrease
C)Equilibrium price will decrease and equilibrium quantity will increase
D)Equilibrium price will increase and equilibrium quantity will increase
9
Assume that the quantity demanded of corn is represented by the equation Qd = 2200 – 100P, and the quantity supplied of corn is represented by the equation Qs = 1000 + 500P. The equilibrium price and equilibrium quantity in the market for corn are:
A)Pe = 1 and Qe = 1,500
B)Pe = 2 and Qe = 2,200
C)Pe = 1 and Qe = 2,100
D)Pe = 2 and Qe = 2,000
10
If a decrease in the price of one product results in an increase in demand for another product, then the product is:
A)Substitute good
B)Normal good
C)Inferior good
D)Complement good





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