vu eco402 Final Term - Quiz No.3
vu eco402 Microeconomics Quiz
This quiz belongs to book/course code vu eco402 Microeconomics of vu organization. We have 8 quizzes available related to the book/course Microeconomics. This quiz has a total of 10 multiple choice questions (MCQs) to prepare and belongs to topic Final Term. NVAEducation wants its users to help them learn in an easy way. For that purpose, you are free to prepare online MCQs and quizzes.
NVAEducation also facilitates users to contribute in online competitions with other students to make a challenging situation to learn in a creative way. You can create one to one, and group competition on an topic of a book/course code. Also on NVAEducation you can get certifications by passing the online quiz test.
Question 1: Lower fuel oil prices in 1986 led to a reduction in demand and lower prices of solar heating units. At the lower price, producers of solar heating units reduced the quantity supplied. This statement is
false; lower fuel oil prices would increase the demand for and price of solar heating units.
false; producers of solar units would expand production rather than reduce output if the price of the units fell.
false; if the demand for solar units fell, the supply of the units would decrease but not the quantity supplied.
essentially correct.
Question 2: Which of the following would most likely increase the demand for peanut butter?
a decrease in the price of bread, a good that is often used with peanut butter
a discovery that the average daily consumption of peanut butter decreases ones life span by 15 years
crop failures that raise the price of peanuts
a decrease in the price of all substitute protein products
Question 3: Marginal product crosses the horizontal axis (is equal to zero) at the point where:
Average product is maximized.
Total product is maximized.
Diminishing returns set in.
All of the given
Question 4: Which of the following is most clearly consistent with the basic postulate of economics with regard to human decision making?
People will never choose work over leisure.
People will buy less gas if the gasoline tax decreases 20 cents per gallon.
People will buy more orange juice at $2 per gallon than at $1 per gallon.
People will consume less beef if the price increases from $1 to $2 per pound.
Question 5: A cold spell in Florida extensively reduced the orange crop, and, as a result, California oranges commanded a higher price. Which of the following statements best explains the situation?
The supply of Florida oranges fell, causing the supply of California oranges to increase as well as their price.
The supply of Florida oranges fell, causing the supply of California oranges to decrease and their price to increase.
The supply of Florida oranges fell, causing their price to increase and the demand for California oranges to increase.
The demand for Florida oranges was reduced by the freeze, causing an increase in the price of California oranges and a greater demand for them.
Question 6: The expression, Theres no such thing as a free lunch implies that
everyone has to pay for his own lunch.
the person consuming a good must always pay for it.
costs are incurred when resources are used to produce goods and services.
no one has time for a good lunch anymore.
Question 7: Which of the following is NOT true about indifference curve?
Indifference curves always are convex to origin.
Indifference curves always are concave to origin.
Indifference curves can not interact each other.
Higher indifference curve shows high level of satisfaction.
Question 8: A reduction in gasoline prices caused the demand to increase. The lower prices led to an increase in demand for large cars, causing their price to rise. This statement
is essentially correct.
contains one error the lower gasoline prices would cause a reduction in demand for large cars, not an increase.
contains one error the lower gasoline prices would increase the quantity demanded by consumers, not the demand.
contains two errors the lower gasoline prices would cause the quantity demanded (rather than demand) to increase, and the lower gasoline price would reduce (rather than increase) the demand for large cars.
Question 9: Which one of the following states a central element of the economic way of thinking?
Scarce goods are priceless.
Incentives matter--if the personal cost of a choice increases, individuals will be less likely to choose it.
The realism of the assumptions is the best test of an economic theory.
When deciding how to allocate time, the concept of opportunity cost is meaningless
Question 10: Economic analysis assumes that
for the most part, individuals act out of selfish motives, and it is realistic to assume this is always true.
although individuals are at times selfish and at times altruistic, only their selfish actions may be predicted.
people are basically humanitarian and their actions are therefore difficult to predict.
changes in the personal benefits and costs associated with an activity will exert a predictable influence on human behavior.
