AP Microeconomics-Unit 2:Teacher MCQ-1
A change in which of the following will cause a change in the supply of personal computers (PC's) in the short run? (A) Technology (B) Demand for PC's (C) Price of disks, which are a complement to PC's (D) Price of PC's (E) Consumers' incomes
answer A
All of the following cause a rightward shift in the demand schedule for a normal good EXCEPT (A) a decrease in the price of the good (B) a decrease in the price of a complementary good (C) an increase in the price of a substitute good (D) an increase in consumers' income (E) an increase in consumers' preference for the good
answer A
Assume that demand for bottled water is relatively price elastic. An increase in supply of bottled water will result in which of the following? (A) A decrease in price, leading to an increase in total revenue (B) A decrease in price, leading to a decrease in total revenue (C) An excess supply of bottled water (D) An excess demand for bottled water (E) A relatively small decrease in price and no change in equilibrium quantity
answer A
Assume that good X is a normal good. Which of the following helps to explain why a decrease in the price of good X increases the quantity demanded of good X? (A) Good X becomes relatively less expensive than its substitutes, so consumers buy more of good X and fewer of the substitutes (B) The marginal utility of consuming good X increases as more of good X is consumed. (C) The lower price of good X decreases the marginal utility per dollar; therefore, consumers buy more of good X. (D) The demand curve for good X shifts to the left. (E) The supply curve for good X shifts to the right.
answer A
A city transit authority increases the price of sub- way and bus tickets from $1.25 to $1.50. If the demand for these tickets is price inelastic, the number of people riding buses and subways and the city's revenues will most likely change in which of the following ways? (A)Number of People Riding City's Revenues Increase Increase (B)Number of People Riding City's Revenues Decrease Increase (C)Number of People Riding City's Revenues Decrease Decrease (D)Number of People Riding City's Revenues Decrease Remain constant (E)Number of People Riding City's Revenues Remain co
answer B
A leftward shift in the supply curve of watches could be caused by (A) an increase in the price of watches (B) an increase in wages paid to workers who produce watches (C) an improvement in the technology associated with watchmaking (D) a decrease in the price of parts used in the production of watches (E) an increase in population
answer B
An increase in the supply of coffee could be caused by (A) a decrease in the price of cream, which is a complement to coffee (B) a decrease in the cost of labor used to produce coffee (C) an increase in consumer income (D) an increase in the demand for coffee (E) an increase in the price of coffee
answer B
Assume that consumers consider popcorn and pretzels to be substitutes. A significant decrease in the supply of popcorn will affect the pretzel market by (A) increasing the demand for pretzels and therefore the supply of pretzels (B) increasing the demand for pretzels and therefore the price of pretzels (C) decreasing the demand for pretzels and therefore the price of pretzels (D) increasing the supply of pretzels and therefore the price of pretzels (E) decreasing the supply of pretzels and therefore the price of pretzels
answer B
Assume that ice cream is a normal good. If the price of ice cream decreases, the substitution effect and the income effect will lead to which of the following changes in ice cream consumption? (A)Substitution Effect Income Effect Increase Decrease (B)Substitution Effect Income Effect Increase Increase (C)Substitution Effect Income Effect Increase No change (D)Substitution Effect Income Effect Decrease Increase (E)Substitution Effect Income Effect Decrease No change
answer B
Assume that the price of good X decreases from $10 to $9 per unit and that the quantity demanded of good X increases from 25 to 30 units. In this price range, the demand for good X is (A) inelastic (B) elastic (C) unit elastic (D) perfectly inelastic (E) perfectly elastic
answer B
Carmen consumes both entertainment and medical care. For Carmen, entertainment is a normal good, and the income elasticity of her demand for medical care is zero. If Carmen's income increases, which of the following will be the immediate impact on her consumption? (A)Entertainment Medical care Increase Increase (B)Entertainment Medical care Increase No change (C)Entertainment Medical care No change Increase (D)Entertainment Medical care Increase Decrease (E)Entertainment Medical care Decrease Increase
answer B
If a 10 percent increase in the price of a good leads to a 25 percent decrease in the quantity demanded of the good, demand is (A) relatively inelastic (B) relatively elastic (C) unit elastic (D) perfectly elastic (E) perfectly inelastic
answer B
Assume that apple juice and grape juice are substitutes. Which of the following will cause an increase in the quantity of apple juice supplied? (A) A decrease in subsidies to apple juice producers (B) A decrease in the price of grape juice (C) An increase in the price of apple juice (D) An increase in the price of insecticides used on apple trees (E) The imposition of a price ceiling in the market for apple juice
answer C
Assume that the demand for a certain good is perfectly inelastic and the supply curve of the good is upward sloping. Which of the following occurs in the market for the good if the price of an input used to produce the good increases? (A) A decrease in both the quantity supplied and the equilibrium amount consumed (B) A decrease in the quantity supplied and an increase in the equilibrium price (C) A decrease in the supply and an increase in the equilibrium price (D) A decrease in both the demand and the equilibrium amount consumed (E) A decrease in both the quantity demanded and the equilibrium price
answer C
A monopolist produces two unrelated goods, X and Y. The demand for X is currently price elastic and the demand for Y is currently price inelastic. To increase its total revenue, the firm should change the price of X and Y in which of the following ways? (A)Price of X Price of Y Increase No change (B)Price of X Price of Y Increase Decrease (C)Price of X Price of Y Increase Increase (D)Price of X Price of Y Decrease Increase (E)Price of X Price of Y Decrease Decrease
answer D
According to the law of demand, an increase in the price of grape juice will result in (A) a rightward shift in the demand curve for grape juice (B) a leftward shift in the demand curve for grape juice (C) a decrease in the demand for orange juice, a substitute (D) a decrease in the quantity of grape juice demanded (E) an increase in the quantity of grape juice supplied
answer D
Assume that a monopolist is producing in the inelastic portion of its demand curve. Which of the following will occur if the monopolist decreases its price? (A) Marginal revenue will decrease, but profits will increase. (B) Marginal revenue will increase, but profits will decrease. (C) Total revenue will decrease, but profits will increase. (D) Both total revenue and profits will decrease. (E) Both total revenue and profits will increase.
answer D
Assume that people like onions on their hamburgers. If the supply of hamburgers decreases, the demand for onions will most likely (A) remain unchanged because hamburgers and onions are different goods (B) increase because hamburgers and onions are substitutes (C) increase because hamburgers and onions are complements (D) decrease because hamburgers and onions are complements (E) decrease because hamburgers and onions are substitutes
answer D
The demand curve for a normal good slopes down for which of the following reasons? I. An increase in the price of the good induces consumers to purchase substitute products. II. An increase in the price of the goods reduces consumers' purchasing power. III. An increase in the price of the good increases consumers' utility from consuming that good. (A) I only (B) II only (C) III only (D) I and II only (E) I and III only
answer D
A decrease in the demand for antique lanterns, a normal good, would be caused by which of the following? (A) An increase in consumers' incomes (B) An increase in the price of antique lanterns (C) An increase in the expected price of antique lanterns in the future (D) An increase in the price of electric lanterns, a substitute good (E) An increase in the price of lamp oil, a complementary good
answer E
Assume a consumer finds that his total expenditure on compact discs stays the same after the price of compact discs declines. Which of the following is true for this price change? (A) Compact discs are inferior goods to this consumer. (B) The consumer's demand for compact discs increased in response to the price change. (C) The consumer's demand for compact discs is perfectly price elastic. (D) The consumer's demand for compact discs is perfectly price inelastic. (E) The consumer's demand for compact discs is unit price elastic.
answer E