Microeconomics (Multiple Choice)

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Julia Rawyler

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Julia Rawyler

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This flashcard set covers fundamental microeconomics concepts at the university level, focusing on demand, supply, and price elasticity. It explores how changes in price and weather affect quantity, the law of demand, and the shifts in curves. Students and economics enthusiasts will find this set useful for understanding market dynamics and price behavior, enhancing their grasp of economic principles.

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Which of the following demand curves does NOT obey the law of demand?

Chapter 2

Q = 100+P

Q = 100 – P

Q = 100/P

Which of the following supply functions obeys the law of supply, where Q is quantity, P is price and I is income?

Chapter 2

Q = 10P

Q = 10 + 2P

Q = 10 – 2P

Q = 10 – P + .5I

Which of the following would cause an unambiguous increase in the equilibrium price in a market?

Chapter 2

An increase (shift out) in supply and an increase (shift out) in demand.

An increase (shift out) in supply and a decrease (shift in) in demand.

A decrease (shift in) in supply and an increase (shift out) in demand.

A decrease (shift in) in supply and a decrease (shift in) in demand.

Which of the following statements is NOT correct?

Chapter 2

If supply is unit elastic, a one percent change in price will elicit a one percent change of the opposite sign in the quantity demanded.

If demand is inelastic, a one percent change in price will elicit a one percent change of the opposite sign in the quantity demanded.

If demand is elastic, a one percent change in price will elicit a greater than one percent change of the opposite sign in the quantity demanded.

At the choke price, a linear demand curve is elastic.

A linear demand is unit elastic when Q = bP, for b a constant.

What would be the formula for the elasticity of demand with respect to weather, where Q is quantity and W is weather?

Chapter 2

Change in Q / Change in W

(Change in Q / W)(Q / W)

(Change in Q / Change in W)(W / Q)

Change in W / Change in Q

(Change in Q / W)(Change in W / Q)

If demand is elastic, an increase in price

Chapter 2

will increase total revenue.

will decrease total revenue.

will have an indeterminate effect on total revenue.

will decrease total profit.

The elasticity of demand for Carlsberg beer is likely to be _____ the elasticity of demand for all beer.

Chapter 2

more elastic than

less elastic than

the same as

less negative than

When a linear demand curve can be expressed as Q = a-bP, which region corresponds to the elastic portion of the demand curve?

Chapter 2

Price ranges from (a/b) to (a/2b).

Price ranges from (a/2b) to 0.

Quantity ranges from (a/2) to a.

Only where quantity equals (a/2).

The price of good A falls and the demand for good B decreases (shifts in). Goods A and B appear to be:

Chapter 2

cannot be determined

substitutes

complements

normal goods

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Microeconomics (Multiple Choice)

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