AP Microeconomics Unit 3 MCQ\'s Flashcards Quizlet PDF

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12/27/21, 9:06 AM

AP Microeconomics Unit 3 MCQ's Flashcards | Quizlet

Social Science / Economics / Managerial Economics

AP Microeconomics Unit 3 MCQ's 11 studiers recently

Terms in this set (29) Which of the following

II and III only

statements is true? I. When a good absorbs only a small share of consumer spending, the income effect explains the demand curve's negative slope. II. A change in consumption brought about by a change in purchasing power describes the income effect. III. In the case of an inferior good, the income and substitution effects work in opposite directions.

The income effect is most likely

Housing

to come into play for which of the following goods?

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If a decrease in price from $2

AP Microeconomics Unit 3 MCQ's Flashcards | Quizlet

0.27

to $1 causes an increase in quantity demanded from 100 to 120, using the midpoint method, price elasticity of demand equals

Which of the following is likely

Foreign travel

to have the highest price elasticity of demand?

If a 2% change in the price of a

5

good leads to a 10% change in the quantity demanded of a good, what is the value of price elasticity of demand?

A perfectly elastic demand

Horizontal

curve is

Which of the following would

The good is a necessity.

cause the demand for a good to be relatively inelastic?

Which of the following is true if

The demand curve is vertical.

the price elasticity of demand for a good is zero?

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Which of the following is

AP Microeconomics Unit 3 MCQ's Flashcards | Quizlet

Elastic, decrease

correct for a price increase? When demand is ____________, total revenue will ______________ .

If the cross-price elasticity

Complements

between two goods is negative, this means that the two goods are

If Kylie buys 200 units of good

1.8

X when her income is $20,000 and 300 units of good X when her income increases to $25,000, her income elasticity of demand, using the midpoint method, is

The income elasticity of

Positive

demand for a normal good is

A perfectly elastic supply

Horizontal

curve is

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Which of the following leads to

AP Microeconomics Unit 3 MCQ's Flashcards | Quizlet

III only

a more inelastic price elasticity of supply? I. the use of inputs that are easily obtained II. a high degree of substitutability between inputs III. a shorter time period in which to supply the good

Refer to the graph below. What

$4,000

is the value of consumer surplus when the market price is $40?

Refer to the graph below. What

$1,000

is the value of producer surplus when the market price is $60?

Other things equal, a rise in

Producer surplus will rise; consumer surplus will fall

price will result in which of the following?

Consumer surplus is found as

below the demand curve and above the price

the area

Allocating kidneys to those

consumer surplus

with the highest net benefit (where net benefit is measured as the expected increase in life span from transplant) is an attempt to maximize

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At market equilibrium in a

AP Microeconomics Unit 3 MCQ's Flashcards | Quizlet

III ONLY

competitive market, which of the following is necessarily true? I. Consumer surplus is maximized. II. Producer surplus is maximized. III. Total surplus is maximized.

When a competitive market is

none of the above

in equilibrium, total surplus can be increased by I. reallocating consumption among consumers. II. reallocating sales among sellers. III. changing the quantity traded.

3. Which of the following is

There is often a trade off between equity and

true regarding equity and

efficiency

efficiency in competitive markets

An excise tax imposed on

I and III only

sellers in a market will result in which of the following? I. an upward shift of the supply curve II. a downward shift of the demand curve

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An excise tax will be paid

the price elasticity of supply is low and the price

mainly by producers when

elasticity of demand is high

Generally, each successive unit

Decrease

of a good consumed will cause marginal utility to

Assume there are two goods,

0 units of good X and 20 units of good Y

good X and good Y. Good X costs $5 and good Y costs $10. If your income is $200, which of the following combinations of good X and good Y is on your budget line?

The optimal consumption rule

MU/P is equal for all goods

states that total utility is maximized when all income is spent and

A consumer is spending all of

More or good B

her income and receiving 100 utils from the last unit of good A and 80 utils from the last unit of good B. If the price of good A is $2 and the price of good B is $1, to maximize total utility the consumer should buy

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The optimal consumption

AP Microeconomics Unit 3 MCQ's Flashcards | Quizlet

on the consumer's budget line.

bundle is always represented by a point

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