Free CLEP Microeconomics Exam Practice Questions
- Thrifty Buy More sells blue baseball hats at $10 a hat in May. The equilibrium price for blue baseball hats increases to $12 in June. Which of the following is a potential explanation for the change?
- An increase in supply of blue baseball hats
- A decrease in demand for blue baseball hats
- Both supply and demand stay the same
- Government subsides make it less costly to produce blue hats
- Substitute goods decrease in supply
- The price of fleece blankets goes up from $10 to $11. At the same time, demand goes down from 1,000 blankets to 800 blankets. Which of the following statements is true?
- Demand is elastic
- Demand is inelastic
- The price elasticity quotient, or Ed, is less than 1
- The price elasticity quotient, or Ed, is equal to 1
- Demand is unitary elastic
- Which of the following statements about price elasticity of supply is not correct?
- If the percentage change in the quantity supplied is greater than the percentage change in price, the supply is elastic.
- The supply of a good or service with a short life expectancy, such as fresh grapes, is inelastic.
- Short-run supply for a factory producing a good through a complicated combination of resources tends to be inelastic.
- Long-run supply for a factory tends to be more elastic than short-run supply.
- If ES is greater than 1, supply is inelastic.
- Which of the following areas represents consumer surplus?
- Which of the following statements is true about producer surplus?
- It is always the same as consumer surplus
- It is the part of the demand curve that reaches beyond the equilibrium point
- A decrease in equilibrium price results in an increase in producer surplus
- A decrease in equilibrium price results in a decrease in producer surplus
- An increase in equilibrium price results in a decrease in producer surplus
- A determinant of demand increases. What follows?
I. The demand curve shifts to the right
II. The equilibrium price increases
III. The equilibrium quantity increases
IV. The supply curve shifts to the left
- Only I
- I and II only
- I, II, and III only
- I, II, III, and IV
- None of the above
- Assume that the equilibrium price for an apartment in Gotham City is $1,000 and the equilibrium quantity 10,000. Now, assume government steps in and creates a price ceiling at $850. Which of the following is not likely to occur?
I. Demand will increase
II. Supply will increase
III. A price floor will also be established
- I only
- II only
- III only
- I and II only
- II and III only
Last Updated: 12/14/2017