PRINCIPLES OF MICROECONOMICS
MIDTERM MOCK TEST
Time duration: 60 minutes
By: Tran Thi Kieu Minh, Lecturer, VJCC Institute
Note: Closed book test. No phones, laptops and any other electronic devices.
Student’s Name:
Class: ID number:
Part 1: Short questions
Question 1: Beer and pizza are complements because they are often enjoyed together. When the price of beer rises,
what happens to the supply, demand, quantity supplied, quantity demanded, and price in the market for pizza?
Question 2: How does a tax on a good affect the price paid by buyers, the price received by sellers, and the quantity
sold? Justify your answer with a graph.
Question 3: Harry’s income declines, and as a result, he buys more pumpkin juice. Is pumpkin juice an inferior or a
normal good? What happens to Harry’s demand curve for pumpkin juice?
Part 2: Multiple choices questions
Choose the correct answer among a, b, c or d.
1. An economic model is 5. Which of the following will shift the demand curve for
a. a mechanical machine that replicates the functioning of pizza to the right?
the economy. a. an increase in the price of hamburgers, a
b. a fully detailed, realistic description of the economy. substitute for pizza
c. a simplified representation of some aspect of the b. an increase in the price of root beer, a
economy. complement to pizza
d. a computer program that predicts the future of the c. the departure of college students, as they leave
economy. for summer vacation
2. The circular-flow diagram illustrates that, in markets for d. a decrease in the price of pizza
the factors of production, 6. If pasta is an inferior good, then the demand curve
a. households are sellers, and firms are buyers. shifts to the _________ when _________ rises.
b. households are buyers, and firms are sellers. a. right; the price of pasta
c. households and firms are both buyers. b. right; consumers’ income
d. households and firms are both sellers. c. left; the price of pasta
3. The market for which product best fits the definition d. left; consumers’
of a perfectly competitive market? 7. The discovery of a large new reserve of crude oil will
a. eggs shift the _________ curve for gasoline, leading to a
b. tap water _________ equilibrium price.
c. movies a. supply; higher
d. computer operating systems b. supply; lower
4. All of the following topics fall within the study of c. demand; higher
microeconomics EXCEPT d. demand; lower
a. the impact of cigarette taxes on the smoking 8. An increase in _________ will cause a movement
1
behavior of teenagers. along a given supply curve, which is called a change in
b. the role of Microsoft’s market power in the pricing _________.
of software. a. supply; demand
c. the effectiveness of antipoverty programs in b. supply; quantity demanded
reducing homelessness. c. demand; supply
d. the influence of the government budget deficit on d. demand; quantity supplied
economic growth.
Part 3: Scenario: Suppose that demand and supply of a fish market can be described by
P = 20 − 0.5Q and P = 4 + 0.5Q where Q is in kg per day and P is in dollars.
1 Find the equilibrium price/quantity for this market.
2 How much is the CS, PS and Total Surplus at this equilibrium?
3 Suppose that the state government decides to tax $4/kg on consumers. Find the new equilibrium prices and
the new equilibrium quantity.
4 What is total tax payment in dollars to the state government?
5 How much is the share of tax paid by buyers and by sellers?
6 Graph your results