Economics Quiz: Test On Microeconomics! Trivia

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Economics Quiz: Test On Microeconomics! Trivia - Quiz


Microeconomics is a division of economics that studies individuals' and firms' behavior in making decisions regarding the distribution of scarce resources and the interactions among these entities and corporations. The purpose of microeconomics is to examine the market processes that determine relative values among goods and services and distribute limited resources among alternative uses. Learn more about microeconomics by taking this quiz. Good luck with it.


Questions and Answers
  • 1. 

    If the demand curve for good X is downward-sloping, an increase in the price will result in

    • A.

      An increase in the demand for good X.

    • B.

      A decrease in the demand for good X.

    • C.

      No change in the quantity demanded for good X.

    • D.

      A larger quantity demanded for good X.

    • E.

      A smaller quantity demanded for good X.

    Correct Answer
    E. A smaller quantity demanded for good X.
    Explanation
    When price changes there is a opposite change in the quantity demanded as measured on the horizontal axis.

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  • 2. 

    The law of demand states that the quantity demanded of good changes, other things being equal, when

    • A.

      The price of the good changes.

    • B.

      Consumer income changes.

    • C.

      The prices of other goods change.

    • D.

      A change occurs in the quantities of other goods purchased

    Correct Answer
    A. The price of the good changes.
    Explanation
    A “change in demand” means that the whole curve shifts, but a “change in the quantity demanded” means that there is movement along a stationary curve.

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  • 3. 

    Which of the following is the result of a decrease in the price tea, other things being equal?

    • A.

      A leftward shift in the demand curve for tea.

    • B.

      A downward movement along the demand curve for tea.

    • C.

      A rightward shift in the demand curve for tea.

    • D.

      An upward movement along the demand curve for tea.

    Correct Answer
    B. A downward movement along the demand curve for tea.
    Explanation
    Because demand curves have a negative slope, as the price declines, the quantity demanded will increase.

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  • 4. 

    Which of the following will cause a movement along the demand curve for X?

    • A.

      A change in the price of a close substitute.

    • B.

      A change in the price of good X.

    • C.

      A change in consumer tastes and preferences for good X.

    • D.

      A change in consumer income.

    Correct Answer
    B. A change in the price of good X.
    Explanation
    Movement along a given demand curve always occurs when the price changes, if anything other than price changes, then the whole curve will shift.

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  • 5. 

    Assuming that beef and pork are substitutes, a decrease in the price of pork will cause the demand curve for beef to

    • A.

      Shift to the left as consumers switch from beef to pork.

    • B.

      Shift to the right as consumers switch from beef to pork.

    • C.

      Remain unchanged, since beef and pork are sold in separate markets.

    • D.

      None of the above.

    Correct Answer
    A. Shift to the left as consumers switch from beef to pork.
    Explanation
    With a decrease in the price of pork, people will want to buy more pork; because beef and pork are substitutes, they will buy less at possible prices for beef.

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  • 6. 

    Assuming that  coffee and tea are substitutes, a decrease in the price of coffee, other things being equal, results in a (an)

    • A.

      Downward movement along the demand curve for tea.

    • B.

      Downward movement along the demand curve for tea.

    • C.

      Upward movement along the demand curve for tea.

    • D.

      Rightward shift in the demand curve for tea.

    Correct Answer
    B. Downward movement along the demand curve for tea.
    Explanation
    With a decrease in the price of coffee people will want to buy more coffee; because coffee and tea are substitutes, they will buy less at possible prices for tea.

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  • 7. 

    Assuming steak and potatoes are complements, a decrease in the price of steak will

    • A.

      Decrease the demand for steak.

    • B.

      Increase the demand for steak

    • C.

      Increase the demand for potatoes.

    • D.

      Decrease the demand for potatoes.

    Correct Answer
    C. Increase the demand for potatoes.
    Explanation
    With a decrease in the price of steak, people will want to buy more steak; because steak and potatoes are complements, they will buy more potatoes as well.

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  • 8. 

    Assuming that steak is a normal good, a decrease in consumer income, other things being equal, will

    • A.

      Cause a downward movement along the demand curve for steak.

    • B.

      Shift the demand curve for steak to the left.

    • C.

      Cause an upward movement along the demand curve for steak.

    • D.

      Shift the demand curve for steak to the right.

    Correct Answer
    B. Shift the demand curve for steak to the left.
    Explanation
    Normal goods are goods that people will buy more of as their incomes increase and less of as their income decreases.

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  • 9. 

    An increase in consumer income, other things being equal, will

    • A.

      Shift the supply curve for a normal good to the right.

    • B.

      Cause an upward movement along the demand curve for an inferior good.

    • C.

      Shift the demand curve for an inferior good to the left.

    • D.

      Cause a downward movement along the supply curve for a normal good.

    Correct Answer
    C. Shift the demand curve for an inferior good to the left.
    Explanation
    Inferior goods are goods that people will buy less of at possible prices as their income increases.

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  • 10. 

    Yesterday, seller A supplied 400 units of a good X at $10 per unit. Today, seller A supplies the same quantity of units at $5 per unit. Based on this evidence, seller A has experienced a (an)

    • A.

      Decrease in supply.

    • B.

      Increase in supply.

    • C.

      Increase in the quantity supplied.

    • D.

      Decrease in the quantity supplied.

    • E.

      Increase in demand.

    Correct Answer
    B. Increase in supply.
    Explanation
    The only way sell A could supply 400 units of good X at $10 yesterday and $5 today is for the supply curve to shift rightward.

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