#1
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers
Few barriers to entry
Homogeneous products
All of the above
#2
What is the concept of opportunity cost?
The value of the best alternative forgone
The total cost of production
The price of a good or service
The cost of inputs
#3
What market structure is characterized by a single seller with significant market power?
Perfect competition
Monopolistic competition
Oligopoly
Monopoly
#4
What is a characteristic of monopolistic competition?
Many buyers and sellers
Identical products
Substantial barriers to entry
Product differentiation
#5
What is the relationship between price and quantity demanded according to the law of demand?
Positive
Negative
Neutral
Inverse
#6
What is the formula for calculating total revenue?
Price multiplied by quantity demanded
Price divided by quantity demanded
Price multiplied by quantity supplied
Price subtracted by quantity supplied
#7
Which of the following is not a determinant of demand?
Income of consumers
Price of related goods
Cost of production
Tastes and preferences
#8
What is the formula for calculating price elasticity of demand?
Change in quantity demanded divided by change in price
Change in price divided by change in quantity demanded
Change in income divided by change in quantity demanded
Change in price divided by percentage change in quantity demanded
#9
What does the production possibility frontier (PPF) represent?
The maximum output combinations of two goods given fixed resources
The minimum output combinations of two goods given fixed resources
The total output of one good given fixed resources
The total output of two goods given unlimited resources
#10
What is the law of diminishing marginal utility?
As consumption increases, total utility decreases
As consumption increases, marginal utility increases
As consumption decreases, marginal utility decreases
As consumption decreases, total utility increases
#11
What does the income elasticity of demand measure?
The change in quantity demanded relative to a change in income
The change in quantity demanded relative to a change in price
The change in income relative to a change in quantity demanded
The change in price relative to a change in quantity demanded
#12
What does the term 'elasticity' refer to in economics?
The responsiveness of quantity demanded to changes in price
The total revenue of a firm
The slope of the demand curve
The level of consumer satisfaction
#13
In the long run, a firm in a perfectly competitive market will earn...
Supernormal profits
Normal profits
Subnormal profits
No profits
#14
What is a characteristic of a perfectly elastic demand curve?
It is vertical
It is horizontal
It is downward sloping
It is upward sloping
#15
What is a characteristic of a perfectly competitive firm in the short run?
Earning supernormal profits
Earning normal profits
Incurring losses
No profits or losses