Microeconomics for Business Exam Questions
Course Introduction
Microeconomics for Business explores the fundamental principles of microeconomic theory and how they apply to managerial decision-making within organizations. Students will examine topics such as supply and demand, market structures, consumer behavior, production and cost analysis, and pricing strategies. The course emphasizes analytical tools for evaluating choices, optimizing resource allocation, and understanding the impacts of government policies and market dynamics on business operations. Real-world case studies and practical applications prepare students to make informed economic decisions in a competitive business environment.
Recommended Textbook
Principles of Microeconomics 6th Edition by Robert H. Frank
Available Study Resources on Quizplus
14 Chapters
1931 Verified Questions
1931 Flashcards
Source URL: https://quizplus.com/study-set/2934
Page 2
Chapter 1: Thinking Like an Economist
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/58457
Sample Questions
Q1) You save $10 on gas every week because you take the bus to school. You have class 5 days a week. What is your average benefit per day of taking the bus to school?
A)$10
B)$5
C)$2
D)$0
Answer: C
Q2) Economics is the study of:
A)the financial concerns of businesses and individuals.
B)the role of government in limiting the choices people make.
C)choice in the face of limited resources.
D)whether we will have enough resources in the future.
Answer: C
Q3) By convention, there are two major divisions of economics, called:
A)marginal benefit and marginal cost.
B)reservation price and opportunity cost.
C)microeconomics and macroeconomics.
D)rational economics and irrational economics.
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: Comparative Advantage
Available Study Resources on Quizplus for this Chatper
157 Verified Questions
157 Flashcards
Source URL: https://quizplus.com/quiz/58451
Sample Questions
Q1) Refer to the table below. Martha's opportunity cost of making of a pie is:
\[\begin{array} { | l | c | c | }
\hline & \begin{array} { c }
\text { Time to } \\
\text { Make a Pie }
\end{array} & \begin{array} { c }
\text { Time to } \\
\text { Make a Cake } \end{array} \\
\hline \text { Martha } & 60 \text { minutes } & 80 \text { minutes } \\
\hline \text { Julia } & 50 \text { minutes } & 60 \text { minutes } \\ \hline \end{array}\]
A)3/4 of a cake.
B)4/3 of a cake.
C)8 cakes.
D)80 cakes.
Answer: A
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Supply and Demand
Available Study Resources on Quizplus for this Chatper
120 Verified Questions
120 Flashcards
Source URL: https://quizplus.com/quiz/58450
Sample Questions
Q1) At the beginning of the fall semester, college towns experience large increases in their populations, causing a(n):
A)decrease in the quantity of apartments demanded.
B)increase in the supply of apartments.
C)increase in the demand for apartments.
D)decrease in the quantity of apartments supplied.
Answer: C
Q2) Supply curves are generally _______ sloping because _______________.
A)downward; more consumers will buy the good if the price falls.
B)upward; of the principle of increasing opportunity costs.
C)downward; it is less expensive to mass-produce goods.
D)upward; of inflation.
Answer: B
Q3) If the market for sport utility vehicles has excess supply, then one can say that:
A)supply is greater than demand.
B)quantity supplied is greater than quantity demanded.
C)demand is greater than supply.
D)quantity demanded is greater than quantity supplied.
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Elasticity
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/58449
Sample Questions
Q1) Suppose an increase in the price of hamburger from $3 to $4 leads to an increase in quantity supplied from 100 units to 150 units. At the original price, the price elasticity of supply for hamburgers is ______ so supply is ______.
A)2/3; elastic
B)2/3; inelastic
C)3/2; elastic
D)3/2; inelastic
Q2) Suppose a 10% increase in the price of aspirin leads to a 5% decrease in the quantity demanded of aspirin. The demand for aspirin, therefore, is A)elastic.
B)inelastic.
C)unit elastic.
D)perfectly inelastic.
Q3) If the income elasticity for a particular good is negative, then:
A)the good is a normal good.
B)as income increases, consumers will tend to purchase more of the good.
C)as income increases, consumers will tend to purchase less of the good.
D)the good is a luxury good.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Demand
Available Study Resources on Quizplus for this Chatper
134 Verified Questions
134 Flashcards
Source URL: https://quizplus.com/quiz/58448
Sample Questions
Q1) The additional utility gained from consuming an additional unit of a good is called:
A)total utility
B)marginal utility
C)costly utility
D)an util
Q2) Growing rice requires extensive irrigation in California. Economists consider water to be a (n) ______ for rice farmers in California.
A)want
B)need
C)luxury
D)inferior good
Q3) Purchasing goods such that the ratio of marginal utility to price is equal across all goods results in the:
A)greatest total utility.
B)lowest expenditure.
C)greatest marginal utility.
D)same expenditure on all goods.
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Perfectly Competitive Supply
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/58447
Sample Questions
Q1) Marginal cost is calculated as:
A)total revenue minus total costs.
B)the change in output divided by the change in total costs.
C)the percentage change in total costs divided by the percentage change in output.
D)the change in total costs divided by the change in output.
Q2) If a perfectly competitive firm produces an output level at which price is greater than marginal cost, then the firm should:
A)employ more fixed factors of production.
B)reduce output to earn greater profits or smaller losses.
C)expand output to earn greater profits or smaller losses.
D)leave its output decision unchanged because it is earning a profit.
Q3) A firm's profit equals:
A)P - MC [price minus marginal cost]
B)(P - ATC) × Q [(price minus average total cost) times the quantity sold]
C)P × Q [price times the quantity sold]
D)(P - ATC) ÷ Q [(price minus average total cost) divided by the quantity sold]
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Efficiency, Exchange, and the Invisible Hand in Action
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/58446
Sample Questions
Q1) If all firms in a perfectly competitive industry are earning a normal profit, then:
A)new firms will enter the industry.
B)existing firms will exit the industry.
C)there is no incentive for firms to enter or exit the industry.
D)the market supply curve will shift to the left.
Q2) The allocative function of price is to:
A)distribute scarce goods and services to those consumers who value them the most highly.
B)ensure that firms in perfectly competitive markets earn an economic profit.
C)direct resources away from markets that are overcrowded and toward markets that are underserved.
D)provide subsidies to low-income families so they can purchase essential goods and services.
Q3) Which of the following is an example of the rationing function of price?
A)Switching from a Ph.D.in economics to one in finance because finance salaries are higher.
B)Bill Gates purchasing the Mona Lisa for $5 billion.
C)A firm attempting to lower its explicit costs.
D)Government price controls.
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Monopoly, Oligopoly, and Monopolistic Competition
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/58445
Sample Questions
Q1) Consider an industry with two firms producing similar products. Each firm's total cost (in dollars) is given below. Mega Corp: TC = 5,000 + 100Q.
Big Inc: TC = 4,000 + 200Q.
When each firm produces 8 units, ______ has a lower total cost, and when each firm produces 12 units, ______ has a lower total cost.
A)Big Inc; Mega Corp
B)Mega Corp; Big Inc
C)Big Inc; Big Inc
D)Mega Corp; Mega Corp
Q2) If a natural monopoly increases the quantity of output it produces, then:
A)its average cost will decrease.
B)its average cost will increase.
C)it will have to increase its price.
D)its profit will increase.
Q3) Monopolists use the hurdle method of price discrimination in order to:
A)separate consumers on the basis of their reservation prices.
B)lower their marginal cost.
C)increase the demand for their good.
D)produce the socially optimal level of output.
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Games and Strategic Behavior
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/58444
Sample Questions
Q1) A coalition of firms who agree to restrict output for the purpose of earning an economic profit is called a(n):
A)pure monopoly.
B)oligopoly.
C)cartel.
D)duopoly.
Q2) The use of psychological incentives to solve commitment problems would be least effective in games played:
A)repeatedly between strangers.
B)once between family members.
C)repeatedly between family members.
D)once between strangers.
Q3) When players cannot achieve their goals because they are unable to make credible threats or promises, the situation is called a:
A)prisoner's dilemma.
B)Nash equilibrium.
C)failure of dominant strategies.
D)commitment problem.
To view all questions and flashcards with answers, click on the resource link above.
11
Chapter 10: Externalities and Property Rights
Available Study Resources on Quizplus for this Chatper
130 Verified Questions
130 Flashcards
Source URL: https://quizplus.com/quiz/58456
Sample Questions
Q1) Suppose Erie Textiles can dispose of its waste "for free" by dumping it into a nearby river. While the firm benefits from dumping waste into the river, the waste reduces fish and bird reproduction. This causes damage to local fishermen and bird watchers. At a cost, Erie Textiles can filter out the toxins, in which case local fishermen and bird watchers will not suffer any damage. The relevant gains and losses (in thousands of dollars) for the three parties are listed below. \[\begin{array} { | l | c | c | }
\hline & \text { With Filter } & \text { Without Filter } \\
\hline \text { Gains to Erie } & \$ 200 & \$ 400 \\
\hline \text { Fisherman } & \$ 180 & \$ 50 \\
\hline \text { Bird Watchers } & \$ 130 & \$ 25 \\
\hline
\end{array}\] If Erie Textiles does not install the filter, there will be a net social ______ of ______ (in thousands of dollars).
A)loss; $35
B)gain; $75
C)loss; $110
D)gain; $200
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: The Economics of Information
Available Study Resources on Quizplus for this Chatper
123 Verified Questions
123 Flashcards
Source URL: https://quizplus.com/quiz/58455
Sample Questions
Q1) A warranty on a used car is a credible signal of quality because:
A)many used cars come with warranties.
B)sellers who offer warranties are more honest than most people.
C)it would cost the seller too much to honor a warranty on a low-quality car.
D)it indicates the car is of average quality.
Q2) Alex, who is risk-neutral, is looking for an one-bedroom apartment to rent for the month of August while he's on vacation in Seattle. All of the one-bedroom apartments in the neighborhood where he wants to stay are of equal quality, but 70 percent rent for $700 per month, 20 percent rent for $600 per month, and 10 percent rent for $500 per month. The first apartment Alex finds rents for $700 per month. If the cost to Alex of searching for an apartment is $40, then searching for another apartment is a gamble with an expected value of:
A)-$10.
B)$0.
C)$10.
D)$20.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Labor Markets, Poverty, and Income Distribution
Available Study Resources on Quizplus for this Chatper
127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/58454
Sample Questions
Q1) According to the textbook, the union wage premium for workers with the same amount of human capital is about ______.
A)40 percent
B)30 percent
C)20 percent
D)10 percent
Q2) In a competitive labor market, if a firm pays a worker less than that worker's VMP, then in the long run:
A)the firm will earn positive economic profits.
B)competing firms will hire the worker away.
C)the worker will have no incentive to work hard.
D)the supply of workers will fall.
Q3) Taken together, factors such as education, training, experience, intelligence, and work habits are known as:
A)statistical discrimination factors.
B)human capital.
C)productivity factors.
D)learned behaviors.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: The Environment, Health, and Safety
Available Study Resources on Quizplus for this Chatper
125 Verified Questions
125 Flashcards
Source URL: https://quizplus.com/quiz/58453
Sample Questions
Q1) Prior to World War II most consumers in the United States:
A)owned medical insurance for catastrophic illness but paid for routine medical care out of their own pockets.
B)paid for catastrophic illness out of their own pockets but owned medical insurance for routine medical care.
C)had no medical insurance of any type.
D)owned medical insurance covering both catastrophic illness and routine medical care.
Q2) The most efficient distribution of pollution abatement is such that the:
A)extent of pollution abatement is the same across all geographic regions.
B)extent of pollution abatement is the same across all polluters.
C)largest reductions in pollution are made by the largest polluters.
D)marginal cost of abatement is the same across all polluters.
Q3) If all firms were to pay the same premium per worker into the workers' compensation system, then firms with high injury rates would pay premiums that:
A)exactly cover the claims generated by their workers
B)are too large to cover the claims generated by their workers.
C)are too small to cover the claims generated by their workers.
D)lead to the socially optimal level of workplace injuries.
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Public Goods and Tax Policy
Available Study Resources on Quizplus for this Chatper
136 Verified Questions
136 Flashcards
Source URL: https://quizplus.com/quiz/58452
Sample Questions
Q1) If taxpayers pay a smaller fraction of their income in taxes as their incomes rise, the tax is ______ and if taxpayers pay a larger fraction of their income in taxes as their income rise, the tax is ______.
A)regressive; progressive
B)progressive; regressive
C)proportional; progressive
D)regressive; proportional
Q2) Lane and Riley are the only two residents in a neighborhood, and they share the same driveway. They would like to have the driveway paved. The value of the paved driveway is $1,500 to Lane and $900 to Riley. Regardless of who pays for the paving both people will benefit from it. If the cost of paving the driveway is $2,000 and Lane proposes that they each pay 50 percent of this cost, then Riley ______ agree to Lane's proposal because ______.
A)will; repaving the driveway would increase total economic surplus
B)will not; repaving the driveway would lower total economic surplus
C)will; if they split the cost, then Riley's economic surplus would increase
D)will not; if they split the cost, then Riley's economic surplus would decrease
To view all questions and flashcards with answers, click on the resource link above.
Page 16