Trivia Quiz Yourself On Microeconomics

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Trivia Quiz Yourself On Microeconomics

Even the smartest people out there in the field of economics have difficulty figuring out how to allocate scarce resources, and that’s because they look too hard at the big picture and don’t focus in on the fine details that you get when you study microeconomics. Take the following quiz on the topic and see just how much you know about it personally! Think you can achieve full marks?


Questions and Answers
  • 1. 
    Sometimes the government spends more or less, depending on the needs of the country. This statement best represents this economic concept:
    • A. 

      Resources should be used as efficiently as possible to achieve society's goals.

    • B. 

      When markets don't achieve efficiency, government intervention can improve society's welfare.

    • C. 

      Overall spending sometimes gets out of line with the economy's productive capacity.

    • D. 

      Government policies can change spending.

  • 2. 
    Lena and Jess are roommates. Lena hates to clean the bathroom. Jess will agree to clean the bathroom only if Lena vacuums the living room. This statement best represents this economic concept:
    • A. 

      The real cost of something is what you must give up to get it.

    • B. 

      “How much” is a decision at the margin.

    • C. 

      People usually exploit opportunities to make themselves better off.

    • D. 

      There are gains from trade.

  • 3. 
    Nate and Dylan are brothers. They have to mow the lawn and clean their rooms before they can go to the high school football game. Nate mows the lawn and Dylan picks up the rooms, and they make it to the football game on time. This statement best represents this economic concept:
    • A. 

      People usually exploit opportunities to make themselves better off.

    • B. 

      There are gains from trade.

    • C. 

      Markets usually lead to efficiency.

    • D. 

      One person's spending is another person's income.

  • 4. 
    Which of the following principles underlies the gains from trade?
    • A. 

      Resources are scarce.

    • B. 

      Marginal analysis is used for “how much” decisions.

    • C. 

      Resources should be used as efficiently as possible to achieve society's goals.

    • D. 

      People usually exploit opportunities to make themselves better off.

  • 5. 
    The federal government regulates how much carbon dioxide a factory can emit. This statement best represents this economic concept:
    • A. 

      Resources are scarce.

    • B. 

      “How much” is a decision at the margin.

    • C. 

      Markets usually lead to efficiency.

    • D. 

      When markets don't achieve efficiency, government intervention can improve society's welfare.

  • 6. 
    During the Great Depression, consumers and producers in the United States dramatically reduced their spending as compared to the quantity of goods and services available at the time. This statement best represents this economic concept:
    • A. 

      Resources are scarce.

    • B. 

      When markets don't achieve efficiency, government intervention can improve society's welfare.

    • C. 

      Overall spending sometimes gets out of line with the economy's productive capacity.

    • D. 

      Government policies can change spending.

  • 7. 
    A resource is
    • A. 

      Anything that can be used to produce something else.

    • B. 

      A sum of money used to start a business.

    • C. 

      A physical attribute of land.

    • D. 

      An intangible aspect of a society, such as its culture.

  • 8. 
    The opportunity cost of an item is
    • A. 

      Whatever is given up to obtain it.

    • B. 

      The monetary price paid.

    • C. 

      The monetary price paid, plus any interest.

    • D. 

      The monetary price paid, plus any taxes.

  • 9. 
    An economic system is in __________ when no individual would be better off by making a different choice.
    • A. 

      Chaos

    • B. 

      Decline

    • C. 

      Jeopardy

    • D. 

      Equilibrium

  • 10. 
    Making a trade-off at the margin means
    • A. 

      Making a decision without considering the alternatives.

    • B. 

      Comparing the costs and benefits of doing a little bit more of something versus doing a little bit less.

    • C. 

      Making a decision without considering the opportunity cost.

    • D. 

      Acquiring information that will help with a future decision.

  • 11. 
    Market failure results when the:
    • A. 

      Pursuit of individual self-interest leads to bad results for society as a whole.

    • B. 

      Market fails to create an equal distribution of wealth.

    • C. 

      Market fails to create an equal distribution of income.

    • D. 

      Market fails to eliminate scarcity.

  • 12. 
    Which of the following is a decision made at the margin?
    • A. 

      Penny and Emilio are deciding whether or not to get married.

    • B. 

      Natasha and Jake are deciding whether or not to buy a house.

    • C. 

      Theresa is deciding whether or not to join the military.

    • D. 

      Vincent is deciding how much to spend on an engagement ring.

  • 13. 
    If you choose to specialize in becoming a pharmacy, what gives you confidence that you will be able to purchase food, clothing, and shelter?
    • A. 

      The fact that there is no opportunity cost associated with your decision

    • B. 

      The fact that there is no trade-off associated with your decision

    • C. 

      The existence of government-provided consumer products

    • D. 

      The existence of markets

  • 14. 
    An efficient economy is one that
    • A. 

      Has eliminated scarcity.

    • B. 

      Does not face any trade-offs.

    • C. 

      Relies on a sense of civic duty, rather than incentives, to motivate its citizens.

    • D. 

      Has produced the maximum gains from trade made possible by its resources.

  • 15. 
    The incentives built into a market system tend to
    • A. 

      Lead to inefficient outcomes.

    • B. 

      Lead people to be self-sufficient, rather than to specialize.

    • C. 

      Prevent equilibrium outcomes.

    • D. 

      Ensure that resources are put to good use.

  • 16. 
    Your elderly grandma tells you: “I haven't been taking my beloved walks because I'm concerned about falling and getting hurt. See, there is always a cost to doing something. But if you don't do anything, then there is no cost.” Your grandma does not understand the concept of:
    • A. 

      Scarcity in economics.

    • B. 

      Efficiency in economics.

    • C. 

      Opportunity cost in economics.

    • D. 

      Marginal analysis in economics.

  • 17. 
    Marginal analysis:
    • A. 

      Refers to decisions about whether to do a bit more or a bit less of an activity.

    • B. 

      Helps when making a “how much” choice.

    • C. 

      Involves trade-offs.

    • D. 

      Refers to decisions about whether to do a bit more or a bit less of an activity, helps when making a “how much” choice, and involves trade-offs.

  • 18. 
    Twelve friends got together to celebrate a birthday. If the birthday cake is cut into 12 pieces of the same size and one slice is given to each of the 12 partygoers, this cake distribution is:
    • A. 

      Efficient but not equitable.

    • B. 

      Equitable but not efficient.

    • C. 

      Efficient and equitable.

    • D. 

      Equitable.

  • 19. 
    In Ventura County, California, strawberry production is limited by the number of acres available for agriculture production. This statement best represents this economic concept:
    • A. 

      Resources are scarce.

    • B. 

      “How much” is a decision at the margin.

    • C. 

      There are gains from trade.

    • D. 

      Resources should be used as efficiently as possible to achieve society's goals.

  • 20. 
    Fertilizer, used to grow pumpkins, is an example of a factor of production.
    • A. 

      True

    • B. 

      False

  • 21. 
    To achieve the gains from trade, each nation should specialize in the production of a good or service if:
    • A. 

      Its production possibility frontier is larger than that of any other country.

    • B. 

      Its production possibility frontier is smaller than that of any other country.

    • C. 

      The country can make the product using fewer resources than any other country.

    • D. 

      The country can make the product while forgoing fewer alternative products than any other country.

  • 22. 
    If the opportunity cost of manufacturing automobiles is lower in the United States than in Britain and the opportunity cost of manufacturing airplanes is higher in the United States than in Britain, then the United States will:
    • A. 

      Export both airplanes and automobiles to Britain.

    • B. 

      Import both airplanes and automobiles from Britain.

    • C. 

      Export airplanes to Britain and import automobiles from Britain.

    • D. 

      Import airplanes from Britain and export automobiles to Britain.

  • 23. 
    If the opportunity cost of manufacturing automobiles is higher in the United States than in Britain and the opportunity cost of manufacturing airplanes is lower in the United States than in Britain, then the United States will:
    • A. 

      Export both airplanes and automobiles to Britain.

    • B. 

      Import both airplanes and automobiles from Britain.

    • C. 

      Export airplanes to Britain and import automobiles from Britain.

    • D. 

      Import airplanes from Britain and export automobiles to Britain.

  • 24. 
    Which of the following is a normative statement?
    • A. 

      International trade leads to expanded consumption opportunities.

    • B. 

      Higher expenditures on health care will reduce infant mortality rates.

    • C. 

      We would all be better off if we could reduce our dependence on oil imports.

    • D. 

      Increased defense spending will lead to higher budget deficits.

  • 25. 
    Which of the following is an example of a positive statement?
    • A. 

      The poverty rate is 14%.

    • B. 

      A high rate of economic growth is good for the country.

    • C. 

      Everyone in the country needs to save money for retirement.

    • D. 

      Basketball players should not be paid higher salaries than teachers.

  • 26. 
    The U.S. production possibility frontier will ________ if there is a large influx of immigrants.
    • A. 

      Shift in

    • B. 

      Shift out

    • C. 

      Not change

    • D. 

      Cannot be determined from the information provided

  • 27. 
    The bowed-out shape of the production possibilities frontier reflects
    • A. 

      The fact that all resources are scarce.

    • B. 

      Increasing opportunity cost.

    • C. 

      The nature of economic growth.

    • D. 

      The increase in resources that will result from more production.

  • 28. 
    If an economy has to sacrifice only one unit of good X for each unit of good Y produced throughout the relevant range, then its production possibility frontier has:
    • A. 

      A zero slope.

    • B. 

      A constant, negative slope.

    • C. 

      An increasing, negative slope.

    • D. 

      A decreasing, negative slope.

  • 29. 
    The ________ apples will decrease when apple prices rise.
    • A. 

      Demand for

    • B. 

      Quantity demanded of

    • C. 

      Supply of

    • D. 

      Equilibrium of

  • 30. 
    • A. 

      A change in the prices of related goods

    • B. 

      A change in the price of that good

    • C. 

      A change in the size of the population

    • D. 

      Both a change in the price of that good and a change in the size of the population

  • 31. 
    A shift of the demand curve for thin-crust pizza would not be caused by a change in:
    • A. 

      Buyers' incomes.

    • B. 

      The price of thin-crust pizza.

    • C. 

      The price of thick-crust pizza.

    • D. 

      The popularity of thin-crust pizza.

  • 32. 
    If goods A and Z are complements, an increase in the price of good Z will:
    • A. 

      Increase the demand for good A.

    • B. 

      Decrease the demand for good A.

    • C. 

      Decrease the demand for good Z.

    • D. 

      Decrease the demand for both good A and good Z.

  • 33. 
    Over the past several years, consumers have had an increasing interest in getting a tattoo. This means that the ________ for tattoos has ________.
    • A. 

      Quantity demanded; increased

    • B. 

      Demand; decreased

    • C. 

      Demand; increased

    • D. 

      Quantity demanded; decreased

  • 34. 
    If chicken and beef are substitutes, then a fall in the price of chicken will bring about:
    • A. 

      An increase in the demand for beef.

    • B. 

      A decrease in the demand for beef.

    • C. 

      A decrease in the quantity demanded of beef.

    • D. 

      No change in the demand for beef.

  • 35. 
    A shift to the left of a supply curve is caused by:
    • A. 

      An increase in the number of sellers.

    • B. 

      A technological improvement in production.

    • C. 

      An increase in the cost of an input.

    • D. 

      An increase in the number of buyers.

  • 36. 
    Consider two competing motorcycle manufacturers, Harley-Davidson and Honda. If Harley-Davidson raises the price of its motorcycles, we can expect:
    • A. 

      A shift to the right in the supply curve of Hondas and lower prices for Hondas.

    • B. 

      A shift to the left in the supply curve of Hondas and higher prices for Hondas.

    • C. 

      A shift to the right in the demand curve for Hondas and higher prices for Hondas.

    • D. 

      A shift to the left in the demand curve for Hondas and lower prices for Hondas.

  • 37. 
    • A. 

      There will be an increase in both the equilibrium price and quantity.

    • B. 

      Equilibrium quantity will decrease, but equilibrium price may decrease, increase, or stay the same.

    • C. 

      There will be a decrease in both equilibrium price and quantity.

    • D. 

      Equilibrium quantity will increase, but equilibrium price may decrease, increase, or stay the same.

  • 38. 
    Rice and potatoes are substitutes. If the price of rice rises and there is a bumper crop of potatoes, in the market for potatoes one would expect the:
    • A. 

      Equilibrium price to rise, fall, or stay the same and equilibrium quantity to rise.

    • B. 

      Equilibrium price to rise and the equilibrium quantity to fall.

    • C. 

      Equilibrium price and quantity both to fall.

    • D. 

      Equilibrium price to rise and the equilibrium quantity to fall, rise, or stay the same.

  • 39. 
    The law of demand states that other things equal:
    • A. 

      As the price increases, the quantity demanded will increase.

    • B. 

      As the price decreases, the demand curve will shift to the right.

    • C. 

      As the price increases, the demand will decrease.

    • D. 

      As the price increases, the quantity demanded will decrease.

  • 40. 
    • A. 

      Fall; rise

    • B. 

      Fall, rise, or stay the same; decrease

    • C. 

      Decrease; fall, rise, or stay the same

    • D. 

      Fall; fall

  • 41. 
    French fries and hamburgers are complements. Suppose the cost of the ingredients used to make hamburgers rises, so that the price of a hamburger rises. Then the equilibrium relative price of french fries ________ and the equilibrium quantity ________.
    • A. 

      Rises; increases

    • B. 

      Rises; decreases

    • C. 

      Falls; increases

    • D. 

      Falls; decreases

  • 42. 
    The total consumer surplus for good X can be calculated in all except one of the following ways. Which is the exception?
    • A. 

      The sum of the individual consumer surpluses for all buyers of X

    • B. 

      The area below the demand curve for X and above the price of X

    • C. 

      The area bounded by the demand curve for X and the two axes

    • D. 

      The sum, for all buyers of X, of the difference between what each buyer is willing to pay for X and the amount actually paid

  • 43. 
    Adie wants to take some online classes this semester. She is willing to pay $1,000 for the first class, $800 for the second, $700 for the third, and $500 for the fourth. If online classes cost $750, Adie will take ________ online classes and her consumer surplus will equal ________.
    • A. 

      3; $350

    • B. 

      4; $600

    • C. 

      2; $400

    • D. 

      2; $300

  • 44. 
    Well-defined property rights:
    • A. 

      Can allow for mutually beneficial trades.

    • B. 

      Will result in government regulation.

    • C. 

      Often result in more market failures.

    • D. 

      Lead to more centralized decision making.

  • 45. 
    Markets work because they allocate sales to the potential sellers who most value the right to sell a good, as indicated by their ability to produce the good at the lowest cost. This statement illustrates:
    • A. 

      Producer surplus.

    • B. 

      Consumer surplus

    • C. 

      Total surplus.

    • D. 

      Deadweight loss.

  • 46. 
    The medallion system used to license taxicabs in New York City is an example of a(n):
    • A. 

      Price floor.

    • B. 

      Price ceiling.

    • C. 

      Quota

    • D. 

      Excise tax

  • 47. 
    If minimum wages are set above the equilibrium wage in the market, then the number of workers hired will be _______ the number of people who are willing to work.
    • A. 

      Less than

    • B. 

      Greater than

    • C. 

      Equal to

    • D. 

      Either less than, greater than, or equal to

  • 48. 
    The Atlanta Symphony wants to make sure that its concerts are affordable for all residents of Atlanta and therefore prices all its tickets at $25 each. However, outside Symphony Hall, people can sell the same tickets for $75 or more. The true cost to the concertgoer of a ticket to the symphony is at least:
    • A. 

      25

    • B. 

      50

    • C. 

      75

    • D. 

      100

  • 49. 
    If the U.S. government imposes a quota on the amount of French wine allowed into the United States and the quota is set at a quantity below equilibrium, the price of French wine in the United States will ________ while the U.S.-produced wine will ________.
    • A. 

      Increase; increase

    • B. 

      Increase; decrease

    • C. 

      Decrease; increase

    • D. 

      Decrease; decrease

  • 50. 
    Producers may supply an inefficiently low quality of a good if the government imposes:
    • A. 

      A price control.

    • B. 

      An excise tax.

    • C. 

      A binding price floor.

    • D. 

      A binding price ceiling.

  • 51. 
    Price ceilings that lead to shortages will impose costs on society because they:
    • A. 

      Will eliminate long waiting lines.

    • B. 

      May result in black market prices, which are lower than the market-determined price would be.

    • C. 

      Lead to a smaller quantity offered on the market.

    • D. 

      Help businesses instead of consumers.

  • 52. 
    • A. 

      The U.S. government typically pays farmers to produce as much as possible.

    • B. 

      The U.S. government in some cases has destroyed the surplus production.

    • C. 

      The European Union pays farm exporters to sell products for a profit overseas.

    • D. 

      The U.S. government holds auctions to sell the surplus to the highest bidder.

  • 53. 
    A price that the government guarantees farmers will receive for a particular crop is:
    • A. 

      A price ceiling.

    • B. 

      A price floor (price support).

    • C. 

      A deficiency price.

    • D. 

      An export price (export subsidy).

  • 54. 
    Black markets may develop with price controls because:
    • A. 

      Price controls increase efficiency.

    • B. 

      Quantity demanded equals quantity supplied at the mandated price.

    • C. 

      Individuals cannot profit by illegal exchanges.

    • D. 

      Individuals can profit by illegal exchanges.