Economic Principles and Firm Behavior Quiz

Test your knowledge of microeconomic concepts with questions on demand, perfect competition, cost, revenue, and market structures.

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What is the law of demand?

As the price increases, the quantity demanded increases.

As the price increases, the quantity demanded decreases.

As the price decreases, the quantity demanded decreases.

As the price decreases, the quantity demanded increases.

Which of the following is a characteristic of perfect competition?

Many buyers and one seller

Many buyers and many sellers

One buyer and many sellers

One buyer and one seller

What is the formula for calculating total revenue?

Price × Quantity

Price ÷ Quantity

Price - Quantity

Price + Quantity

What does the term 'elasticity of demand' measure?

The responsiveness of quantity demanded to a change in price

The responsiveness of price to a change in quantity demanded

The total revenue gained from a price change

The total revenue lost from a price change

What is the formula for calculating marginal cost?

Change in Total Cost / Change in Quantity

Change in Total Revenue / Change in Quantity

Change in Total Cost / Change in Price

Change in Total Revenue / Change in Price

In economics, what does the term 'opportunity cost' refer to?

The cost of an opportunity that is not chosen

The monetary cost of an opportunity

The benefit of an opportunity

The total revenue from an opportunity

Which of the following is NOT a characteristic of monopolistic competition?

Many buyers and many sellers

Product differentiation

Free entry and exit of firms

Price taker

Which market structure is characterized by a few interdependent firms?

Monopoly

Perfect competition

Monopolistic competition

Oligopoly

What is the relationship between marginal cost (MC) and marginal revenue (MR) for profit maximization?

MC > MR

MC = MR

MC < MR

MC can be greater than or equal to MR

#10

What is the difference between economic profit and accounting profit?

Economic profit includes implicit costs, while accounting profit does not.

Accounting profit includes implicit costs, while economic profit does not.

Both economic profit and accounting profit include explicit costs only.

Both economic profit and accounting profit exclude explicit costs.

#11

Under what conditions will a perfectly competitive firm shut down in the short run?

When total revenue is less than variable cost

When total revenue is less than fixed cost

When total revenue is less than total cost

When total revenue is less than marginal cost

#12

In economics, what is the role of the production function?

To describe the relationship between inputs and outputs

To calculate profit

To determine market demand

To set prices

Economic Principles and Firm Behavior Quiz

What is the law of demand?

Which of the following is a characteristic of perfect competition?

What is the formula for calculating total revenue?

What does the term 'elasticity of demand' measure?

What is the formula for calculating marginal cost?

In economics, what does the term 'opportunity cost' refer to?

Which of the following is NOT a characteristic of monopolistic competition?

Which market structure is characterized by a few interdependent firms?

What is the relationship between marginal cost (MC) and marginal revenue (MR) for profit maximization?

What is the difference between economic profit and accounting profit?

Under what conditions will a perfectly competitive firm shut down in the short run?

In economics, what is the role of the production function?

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