Economic Concepts in Microeconomics Quiz

Test your understanding of microeconomic principles with questions on demand, supply, market structures, and more.

Practice Learn Test

What is the law of demand?

As price increases, quantity demanded increases

As price increases, quantity demanded decreases

As price decreases, quantity demanded increases

As price decreases, quantity demanded decreases

Which of the following is not a factor of production?

Land

Labor

Capital

Profit

Which of the following is not a determinant of supply?

Price of inputs

Technology

Price of substitutes

Number of firms in the market

What is the law of supply?

As price increases, quantity supplied increases

As price increases, quantity supplied decreases

As price decreases, quantity supplied increases

As price decreases, quantity supplied decreases

What is the concept of elasticity?

The responsiveness of quantity demanded to a change in income

The responsiveness of quantity demanded to a change in price

The responsiveness of quantity supplied to a change in income

The responsiveness of quantity supplied to a change in price

Which of the following is not a characteristic of a perfectly competitive market?

Many buyers and sellers

Homogeneous products

Barriers to entry

Perfect information

What is the formula for price elasticity of demand?

Percentage change in quantity demanded / Percentage change in price

Percentage change in price / Percentage change in quantity demanded

Absolute change in quantity demanded / Absolute change in price

Absolute change in price / Absolute change in quantity demanded

What is the 'opportunity cost'?

The monetary cost of an opportunity

The value of the next best alternative forgone

The total cost of production

The cost of inputs

What is the law of diminishing marginal utility?

As consumption increases, total utility decreases

As consumption increases, marginal utility increases

As consumption increases, marginal utility decreases

As consumption increases, total utility increases

#10

What is the difference between explicit and implicit costs?

Explicit costs are monetary, while implicit costs are not

Explicit costs occur in the short run, while implicit costs occur in the long run

Explicit costs are fixed, while implicit costs are variable

Explicit costs are incurred by firms, while implicit costs are incurred by consumers

#11

What does the production possibility frontier represent?

The maximum output combination achievable given limited resources

The minimum cost of production for a firm

The relationship between price and quantity demanded

The equilibrium point in the market

#12

Which market structure is characterized by one firm dominating the market?

Monopolistic competition

Oligopoly

Perfect competition

Monopoly

#13

What is the main determinant of elasticity of supply?

Time horizon

Number of substitutes

Income levels

Price of the good itself

#14

What is the Coase theorem?

The assertion that individuals will always act in their own self-interest

The principle that externalities can be efficiently resolved through bargaining between affected parties

The theory that government intervention is always necessary to correct market failures

The idea that monopolies are inherently harmful to consumer welfare

#15

What is the difference between explicit and implicit collusion?

Explicit collusion involves formal agreements, while implicit collusion involves tacit understandings

Explicit collusion is legal, while implicit collusion is illegal

Explicit collusion occurs in perfectly competitive markets, while implicit collusion occurs in monopolies

Explicit collusion involves price wars, while implicit collusion involves price leadership