#1
Which of the following is a characteristic of perfect competition?
Many buyers and one seller
One buyer and many sellers
Many buyers and many sellers
One buyer and one seller
#2
What does the term 'opportunity cost' refer to?
The cost of producing one more unit of a good
The highest-valued alternative that must be sacrificed to choose an option
The total cost of production
The cost of resources used in production
#3
In economics, what is the 'marginal cost'?
The additional cost of producing one more unit of a good
The total cost of production
The average cost per unit
The fixed cost of production
#4
What does the term 'diminishing marginal returns' indicate?
As production increases, the marginal cost decreases
As production increases, the marginal product of an input decreases
As production increases, the marginal cost remains constant
As production increases, the average cost decreases
#5
What is the formula to calculate total revenue?
Total revenue = Price × Quantity
Total revenue = Price / Quantity
Total revenue = Quantity / Price
Total revenue = Price - Quantity
#6
In the long run, a perfectly competitive firm will earn...
Economic profit
Normal profit
Supernormal profit
Losses
#7
What is the formula to calculate average fixed cost?
Average fixed cost = Total fixed cost / Quantity
Average fixed cost = Total fixed cost × Quantity
Average fixed cost = Total variable cost / Quantity
Average fixed cost = Total variable cost × Quantity
#8
Which of the following is a characteristic of a monopoly?
Many buyers and one seller
One buyer and many sellers
Many buyers and many sellers
One buyer and one seller
#9
In which market structure do firms have the least control over price?
Perfect competition
Monopoly
Oligopoly
Monopolistic competition
#10
What is the main characteristic of a monopolistic competition market structure?
Many buyers and one seller
One buyer and many sellers
Many buyers and many sellers with differentiated products
One buyer and one seller
#11
In economics, what is the difference between explicit costs and implicit costs?
Explicit costs involve monetary payments while implicit costs involve opportunity costs
Explicit costs involve opportunity costs while implicit costs involve monetary payments
Explicit costs are long-term costs while implicit costs are short-term costs
Explicit costs are variable costs while implicit costs are fixed costs
#12
What is the main characteristic of a pure monopoly market structure?
Many buyers and one seller
One buyer and many sellers
Many buyers and many sellers with identical products
One buyer and one seller
#13
Which of the following is a characteristic of a monopolistic competition market structure?
Many buyers and one seller
One buyer and many sellers
Many buyers and many sellers
One buyer and one seller
#14
What does the 'average variable cost' represent?
The cost of each variable input used in production
The sum of all variable costs
The average total cost per unit of output
The variable cost per unit of output
#15
Which of the following is NOT a characteristic of a perfectly competitive market?
Product differentiation
Price taker
Free entry and exit
Perfect information
#16
What is the relationship between marginal cost (MC) and average variable cost (AVC) when AVC is at its minimum?
MC < AVC
MC = AVC
MC > AVC
MC is undefined at the minimum AVC
#17
What is the primary characteristic of an oligopoly market structure?
Many buyers and one seller
One buyer and many sellers
Few sellers and significant barriers to entry
One buyer and one seller
#18
In a perfectly competitive market, what happens to economic profit in the long run?
It remains constant
It decreases to zero
It increases indefinitely
It fluctuates
#19
Which of the following is an example of a variable cost for a manufacturing company?
Salaries of administrative staff
Depreciation of machinery
Raw materials
Rent for factory building
#20
What is the main characteristic of a cartel?
It consists of many buyers and one seller
It consists of one buyer and many sellers
It consists of many buyers and many sellers with identical products
It consists of a few sellers who collude to control market prices
#21
What is the relationship between marginal cost (MC) and average total cost (ATC) when MC is below ATC?
MC < ATC
MC = ATC
MC > ATC
MC is undefined when below ATC
#22
What does the term 'economies of scale' refer to?
When long-run average total costs decrease as output increases
When long-run average total costs increase as output increases
When short-run average total costs decrease as output increases
When short-run average total costs increase as output increases
#23
Which of the following is a characteristic of monopolistic competition?
Homogeneous products
A large number of firms
Price taker
High barriers to entry
#24
What does the term 'price discrimination' mean in economics?
Selling identical units of a product for different prices
Setting a single price for all units of a product
Charging the same price to all customers
Lowering prices to match competitors
#25
In the long run, what happens to a firm's profits in a perfectly competitive market?
Firms always earn economic profits
Firms always earn zero economic profits
Firms always incur losses
Firms earn economic profits in the short run but not in the long run