AP Microeconomics-Unit 2:Teacher MCQ-3

The supply curve for automobiles will shift to the left in response to

(A) an increase in the efficiency of robot technology

(B) an increse in wages in the automobile industry

(C) a decrease in the number of consumers purchasing automobiles

(D) a decrease in the interest rates for automobile loans

(E) a decrease in consumers' income

answer B

If a 5 percent wage increase in a particular labor market results in a 10 percent decrease in employment, the demand for labor is

(A) perfectly elastic

(B) relatively elastic

(C) unit elastic

(D) relatively inelastic

(E) perfectly inelastic

answer B

If a store raises its prices by 20 percent and its total revenue increases by 10 percent, the demand it faces in this price range must be

(A) inelastic

(B) elastic

(C) unit elastic

(D) perfectly elastic

(E) perfectly inelastic

answer A

If bologna is an inferior good, which of the following must be true?

(A) The demand curve for bologna is vertical.

(B) The demand curve for bologna is horizontal.

(C) An increase in the price of bologna will decrease the supply of bologna.

(D) An increase in consumer income will decrease the demand of bologna.

(E) A decrease in consumer income will decrease the supply of bologna.

answer D

If the demand for good Y increases as the price of good X decreases, it can be concluded that

(A) X and Y are substitute goods

(B) X and Y are complementary goods

(C) X is an inferior good and Y is a superior good

(D) X is a superior good and Y is an inferior good

(E) both X and Y are inferior goods

answer B

If the demand for insulin is price inelastic, a 5 percent increase in the price of insulin will

(A) have no effect on the total revenue of insulin producers

(B) increase the total revenue of insulin producers

(C) decrease the total revenue of insulin producers

(D) decrease the total spending on insulin by consumers

(E) cause the demand for insulin to be less elastic

answer B

If the demand for potatoes increases whenever a person's income increases, then potatoes are an example of

(A) an inferior good

(B) a free good

(C) a Giffen good

(D) a normal good

(E) a public good

answer D

If the demand for product X is perfectly elastic and the supply of product X decreases, which of the following will occur in the market for X ?

(A) Total revenue will increase.

(B) Total revenue will decrease.

(C) Total revenue will remain the same.

(D) Quantity demanded will exceed quantity supplied.

(E) Quantity supplied will exceed quantity demanded.

answer B

If the government imposes a tax on the production of cars, which of the following will occur in the market for cars?

(A) There will be a movement to the right along the supply curve.

(B) There will be a movement to the right along the demand curve.

(C) The supply curve will shift to the right.

(D) The supply curve will shift to the left.

(E) The demand curve will shift to the right.

answer D

Suppose that the demand for vegetables is price elastic. If the price of vegetables increases by 5 percent, the quantity of vegetables demanded would

(A) increase by 5 percent

(B) increase by more than 5 percent

(C) increase by less than 5 percent

(D) decrease by more than 5 percent

(E) decrease by less than 5 percent

answer D

The income and substitution effects explain which of the following?

(A) Decreasing marginal productivity of labor

(B) Market power caused by barriers to entry

(C) Increasing marginal cost of production

(D) Increasing returns to scale

(E) The downward slope of the market demand curve

answer E

Which of the following helps explain why the demand curve for a normal good is downward sloping?

(A) The income and substitution effects move the quantity demanded in the same direction.

(B) The income effect moves the quantity demanded in the opposite direction of the substitution effect.

(C) The income effect dominates the substitution effect.

(D) The substitution effect dominates the income effect.

(E) With an increase in income, the consumer decreases consumption of the good.

answer A

Which of the following will increase the demand for pizza, a normal good?

(A) An increase in the cost of producing pizza

(B) A decrease in the price of pizza

(C) An increase in the price of a complementary product

(D) An increase in consumers' income

(E) An increase in the number of restaurants selling pizza

answer D

Which of the following will cause the supply curve for shoes to shift to the right?

(A) An increase in the price of socks, assuming that shoes and socks are complements

(B) A decrease in the price of sandals, assuming that shoes and sandals are substitutes

(C) An increase in the wages of shoe workers

(D) An increase in the number of firms producing shoes

(E) A decrease in the income of consumers, assuming that shoes are normal goods

answer D

Which of the following will decrease the demand for beef?

(A) An increase in the price of pork, if pork and beef are substitute goods

(B) An increase in the price of potatoes, if potatoes and beef are complementary goods

(C) A decrease in the cost of transporting beef to consumers

(D) An increase in the income levels of most consumers, if beef is a normal good

(E) Research showing beef is better for your health than chicken

answer B

Which of the following will cause the demand curve for good X to shift to the right?

(A) An increase in the price of good Z, a complement to good X

(B) An increase in the price of good Y, a substitute for good X

(C) An increase in the consumer's income, if good X is an inferior good

(D) A decrease in the price of good X

(E) An increase in the supply of good X

answer B

Which of the following changes will lead to an increase in the supply of good X?

(A) An increase in the price of good X

(B) An increase in the wages of labor used to produce good X

(C) A decrease in the price of energy, a key input to the production of good X

(D) An increase in the demand for good X

(E) A decrease in the number of sellers of good X

answer C

The graphs above show the individual demand curves for the only two consumers, Adey and Sarah, in the market for popcorn. As the price of popcorn decreases from ＄12 to＄6, how does the quantity demanded change along the

market demand curve?

(A) It increases from 2 to 4 units.

(B) It increases from 2 to 5 units.

(C) It increases from 2 to 8 units.

(D) It increases from 0 to 14 units.

(E) It increases from 8 to 14 units.

answer C

To alleviate a financial crisis, a university increases student fees. This action will increase university revenues if the price elasticity of demand for university education is

(A) inelastic

(B) unit elastic

(C) elastic

(D) equal to the price elasticity of supply

(E) equal to one

answer A

In which of the following cases would a firm's total revenue increase?

(A) Price increases and demand is elastic.

(B) Price decreases and supply is inelastic.

(C) Price decreases and demand is elastic.

(D) Price decreases and supply is elastic.

(E) Price decreases and demand is inelastic.

answer C

Which of the following best describes the law of demand?

(A) When income increases, the demand for goods increases.

(B) When the price of a good decreases, the demand for the good increases.

(C) When the price of a good decreases, the quantity demanded of the good decreases.

(D) When the price of a good increases, the quantity demanded of the good decreases.

(E) When the demand for a good increases, consumers' willingness and ability to buy the good increases.

answer D