- What is the tax revenue that the government will
collect if they impose a price ceiling at $1.20?
A. $900
B. $720
C. $400
D. $360
E. $200
18. A country that produces more than the domestic
quantity demanded at the world price will most
likely:
A. Export
B. Import
C. Increase prices
D. Decrease prices
E. Increase quantity supplied19. The consumer surplus after trade equals:
A. A
B. A + B
C. A + C
D. B + C
E. A + B + D- When a country allows trade and becomes an
importer of a good:
A. Domestic consumers are better off; domestic
producers are better off.
B. Domestic consumers are better off; domestic
producers are worse off.
C. Domestic consumers are worse off; domestic
producers are worse off.
D. Domestic consumers are worse off; domestic
producers are better off.
E. No changes in total welfare. - What type of tax requires everyone to pay the
same amount regardless of income?
A. Lump-sum tax
B. Proportional tax
C. Regressive tax
D. Progressive tax
E. Flat tax - Which of the following is the best example of a
public good?
A. An ice cream cone purchased at Yolanda’s
Frozen Yogurt
B. A bomber jet purchased for national defense
C. A salmon caught off the coast of Alaska
D. Christmas presents under the Christmas tree
E. Ice skating rink at the local shopping center
23. Accountant Tina is asked to determine this year’s
total revenues for a metal company. Tina will
include all of the following when measuring the
firm’s accounting profit except:
A. Cost of a new machine
B. Increase in labor supply
C. Decrease in prices
D. Cost of plastic production forfeited to
produce metal
E. Damages incurred from the earthquake
24. Under what condition will a firm decide to exit an
industry?
A. Total revenue exceeds total cost of
production.
B. Total revenue from producing is less than its
total cost.
C. Total revenue equals total cost.
D. Profit equals total revenue minus total cost.
E. Price of the good exceeds average total cost
of production.
25. In 1999, Kate’s Crazy Candy Store sold 500
lollipops at the market price of $2.00. The
following year they doubled the quantity sold.
What was their marginal revenue that year?
A. $2,000
B. $100
C. $10
D. $4
E. $2
26. If the long-run average total cost falls as quantity
produced increases, what is this phenomenon
known as?
A. Economies of scale
B. Diseconomies of scale
C. Constant returns to scale
D. Sunk capital costs
E. Efficiency - Up until what point do competitive, profit-
maximizing firms hire workers?
A. MPL = w
B. VMPL = w
C. VMPL = MPL
D. P = L
E. MPL = 0
Microeconomics Full-Length Practice Test 1Microeconomics Full-Length
Practice Test 1
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