Page 1 of 27
Principles of Microeconomics Complete Study
Bundle (UNT | 2025 Edition) | Exams, Practice
Tests & Detailed Rationales
1. Which of the following best defines the economic concept of
scarcity?
A) The unlimited resources available to meet limited wants
B) The limited nature of resources relative to unlimited human
wants
C) The unequal distribution of income
D) The high price of luxury goods
Answer: B – Scarcity is the fundamental economic problem: finite
resources vs. infinite wants. It forces choices and trade-offs.
2. The opportunity cost of attending college for one year
includes:
A) Only tuition and books
,Page 2 of 27
B) Tuition, books, and the foregone income from not working full-
time
C) Only the cost of housing and meals
D) The value of leisure time only
Answer: B – Opportunity cost includes explicit costs (tuition,
books) plus implicit costs (foregone wages). Room/board may be
incurred regardless.
3. A movement along the demand curve for coffee occurs
when:
A) Consumer income increases
B) The price of tea falls
C) The price of coffee decreases
D) A new study shows coffee prevents disease
Answer: C – Movement along demand curve is caused by a
change in the good’s own price. Other factors shift the curve.
, Page 3 of 27
4. Scenario: The price of gasoline rises sharply. Over the next
month, consumers buy slightly less gasoline. Over the next
two years, they buy significantly less. This illustrates:
A) Law of diminishing marginal utility
B) Demand is more elastic in the long run than in the short run
C) Supply is perfectly inelastic
D) The substitution effect only works in the short run
Answer: B – Long-run demand is more elastic because consumers
have time to adjust (buy fuel-efficient cars, move closer to work).
5. If a surplus exists in the market for pizza, we would expect:
A) Price to rise
B) Price to fall
C) Quantity demanded to increase
D) Quantity supplied to increase further
Answer: B – Surplus means quantity supplied > quantity
demanded. Price falls to eliminate the surplus.
Principles of Microeconomics Complete Study
Bundle (UNT | 2025 Edition) | Exams, Practice
Tests & Detailed Rationales
1. Which of the following best defines the economic concept of
scarcity?
A) The unlimited resources available to meet limited wants
B) The limited nature of resources relative to unlimited human
wants
C) The unequal distribution of income
D) The high price of luxury goods
Answer: B – Scarcity is the fundamental economic problem: finite
resources vs. infinite wants. It forces choices and trade-offs.
2. The opportunity cost of attending college for one year
includes:
A) Only tuition and books
,Page 2 of 27
B) Tuition, books, and the foregone income from not working full-
time
C) Only the cost of housing and meals
D) The value of leisure time only
Answer: B – Opportunity cost includes explicit costs (tuition,
books) plus implicit costs (foregone wages). Room/board may be
incurred regardless.
3. A movement along the demand curve for coffee occurs
when:
A) Consumer income increases
B) The price of tea falls
C) The price of coffee decreases
D) A new study shows coffee prevents disease
Answer: C – Movement along demand curve is caused by a
change in the good’s own price. Other factors shift the curve.
, Page 3 of 27
4. Scenario: The price of gasoline rises sharply. Over the next
month, consumers buy slightly less gasoline. Over the next
two years, they buy significantly less. This illustrates:
A) Law of diminishing marginal utility
B) Demand is more elastic in the long run than in the short run
C) Supply is perfectly inelastic
D) The substitution effect only works in the short run
Answer: B – Long-run demand is more elastic because consumers
have time to adjust (buy fuel-efficient cars, move closer to work).
5. If a surplus exists in the market for pizza, we would expect:
A) Price to rise
B) Price to fall
C) Quantity demanded to increase
D) Quantity supplied to increase further
Answer: B – Surplus means quantity supplied > quantity
demanded. Price falls to eliminate the surplus.
