Sample MC Questions
1.
What should happen to the equilibrium price and quantity of a normal good
if there is a
recession
causing many people to lose their jobs?
a) both price and quantity would
rise
b) both price and quantity would
fall
c) price would rise and quantity
would fall
d) price would fall and quantity
would rise
e) price would rise but the
effect on quantity is unknown 2. What would happen to the
equilibrium price and quantity of good A if the price of a
complement went up?
a) both price and quantity would
rise
b) both price and quantity would
fall
c) price would rise and quantity
would fall
d) price would fall and quantity
would rise
e) price would rise but the
effect on quantity is unknown
3. If the
government introduces a price ceiling which has an effect on the market,
you would
expect
a) quantity demanded to be
greater than quantity supplied
b) a surplus to develop
c) the specified price to be an
equilibrium price
d) the equilibrium price to be
below the specified price
e) suppliers will have the
incentive to make more product available
5. Which
of the following would cause the optimal amount of labor (variable input)
to increase?
a) less fixed input
becomes available
b) marginal productivity
decreases
c) a technological
innovation takes place
d) the wage rate
increases
e)
there is a decline in the final demand for the product
6. If
firms in a perfectly competitive industry are currently
losing money, what would you expect to happen as time goes
by?
a) prices will be
cut if the demand is very elastic
b) the industry demand
curve will shift to the right
c) all firms in the
industry are likely to shut down
d) the market price will
rise and the market supply will decrease
e) firms that remain in
the industry will reduce their output
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