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Microeconomics Practice Sheet
Introduction
Microeconomics is the study of how individuals, households, and businesses make decisions about the allocation of scarce resources. It examines how individuals and firms interact in the marketplace to determine prices and quantities of goods and services.
Section 1: Basic Concepts
- What is the definition of microeconomics?
- What is the difference between microeconomics and macroeconomics?
- What are the main components of microeconomics?
- What are the three fundamental economic questions?
- What is the law of supply and demand?
Section 2: Examples and Practice Problems
- Suppose a local bakery is selling cakes for $10 each. The bakery has found that when the price of the cakes is increased to $12, the quantity demanded decreases. What is the demand elasticity for this product?
- A local clothing store is selling T-shirts for $20 each. The store has found that when the price of the T-shirts is decreased to $15, the quantity demanded increases. What is the demand elasticity for this product?
- Suppose a restaurant is selling pizzas for $15 each. The restaurant has found that when the price of the pizzas is increased to $20, the quantity demanded decreases. What is the demand elasticity for this product?
- Suppose a grocery store is selling apples for $2 per pound. The store has found that when the price of apples is decreased to $1.50 per pound, the quantity demanded increases. What is the demand elasticity for this product?
- Suppose a local coffee shop is selling coffee for $3 per cup. The shop has found that when the price of coffee is increased to $4 per cup, the quantity demanded decreases. What is the demand elasticity for this product?
- Suppose a local restaurant is selling hamburgers for $5 each. The restaurant has found that when the price of hamburgers is decreased to $4, the quantity demanded increases. What is the demand elasticity for this product?
- Suppose a local theater is selling movie tickets for $10 each. The theater has found that when the price of movie tickets is increased to $12, the quantity demanded decreases. What is the demand elasticity for this product?
- Suppose a local bookstore is selling books for $15 each. The bookstore has found that when the price of books is decreased to $12, the quantity demanded increases. What is the demand elasticity for this product?
- Suppose a local gas station is selling gasoline for $2 per gallon. The station has found that when the price of gasoline is increased to $3 per gallon, the quantity demanded decreases. What is the demand elasticity for this product?
- Suppose a local electronics store is selling computers for $500 each. The store has found that when the price of computers is decreased to $400, the quantity demanded increases. What is the demand elasticity for this product?