#1
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers
Product differentiation
Control over prices by individual firms
Barriers to entry
#2
What does the law of demand state?
As price increases, quantity demanded increases
As price increases, quantity demanded decreases
As quantity demanded increases, price decreases
As quantity demanded decreases, price increases
#3
Which of the following is a determinant of supply?
Consumer preferences
Technology
Income of consumers
Price of substitute goods
#4
In economics, what does the term 'elasticity' refer to?
The responsiveness of quantity demanded to changes in income
The responsiveness of quantity supplied to changes in price
The responsiveness of quantity demanded or quantity supplied to changes in price, income, or other factors
The relationship between price and quantity demanded
#5
What is the formula for calculating total revenue?
Price × Quantity Demanded
Price × Quantity Supplied
Price ÷ Quantity Demanded
Price ÷ Quantity Supplied
#6
What is the concept of opportunity cost?
The total cost of producing a good or service
The cost of choosing one alternative over another
The cost incurred when resources are underutilized
The cost of goods and services in the economy
#7
Which of the following is a characteristic of a monopoly market?
Many firms producing identical products
Ease of entry and exit for new firms
A single seller with significant control over the market
Perfect information available to all market participants
#8
What is the central assumption of the production possibilities frontier (PPF)?
Resources are fixed and fully utilized
Resources are unlimited
There is no scarcity of resources
Resources are not utilized efficiently
#9
What is the difference between a change in quantity demanded and a change in demand?
Change in quantity demanded is a movement along the demand curve, while change in demand shifts the entire curve
Change in demand is a movement along the demand curve, while change in quantity demanded shifts the entire curve
Both change in quantity demanded and change in demand shift the entire demand curve
Neither change in quantity demanded nor change in demand affects the demand curve
#10
What is the income effect of a price increase?
Consumers buy more of a good because they have more income
Consumers buy less of a good because it now costs more relative to their income
Consumers substitute away from the good toward substitutes
Consumers buy less of other goods because their income has decreased
#11
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
Percentage change in quantity demanded divided by percentage change in price
Percentage change in price divided by percentage change in quantity demanded
#12
Which of the following is a characteristic of oligopoly market structure?
Many firms producing identical products
Price takers
Few large firms dominating the market
No barriers to entry
#13
In a perfectly competitive market in the long run, what happens to economic profits?
Economic profits are maximized
Economic profits are zero
Economic profits continuously increase
Economic profits are negative
#14
What is the price elasticity of demand for a perfectly elastic demand curve?
Equal to zero
Greater than zero, but less than one
Equal to one
Infinite
#15
What is the formula for calculating marginal revenue (MR) in a perfectly competitive market?
Change in total revenue ÷ Change in quantity
Change in total revenue × Change in quantity
Change in quantity ÷ Change in total revenue
Change in quantity × Change in total revenue