#1
What is the primary focus of microeconomics?
Macroeconomic indicators
Individual economic units and their behavior
Global economic trends
Government fiscal policies
#2
What is the opportunity cost in economics?
The cost of an opportunity
The value of the best forgone alternative
The monetary cost of resources
The cost of production
#3
What is the difference between a normal good and an inferior good?
Normal goods are luxury items, while inferior goods are basic necessities
Normal goods have elastic demand, while inferior goods have inelastic demand
Normal goods have an inverse relationship with income, while inferior goods have a direct relationship
Normal goods are purchased more as income increases, while inferior goods are purchased less as income increases
#4
What is the difference between a positive economic statement and a normative economic statement?
Positive statements describe how the economy should be, while normative statements describe how it is
Positive statements are based on facts and data, while normative statements involve value judgments and opinions
Positive statements are prescriptive, while normative statements are descriptive
Positive statements are subjective, while normative statements are objective
#5
In microeconomics, what is the concept of consumer surplus?
The extra profit gained by producers
The difference between the highest price a consumer is willing to pay and the actual price paid
The percentage increase in demand
The total revenue generated by consumers
#6
Which of the following is an example of a microeconomic decision?
Government budget allocation
National GDP growth rate
Household consumption choices
International trade agreements
#7
What does the law of demand state?
As prices increase, demand increases
As prices increase, demand decreases
As prices decrease, demand increases
As prices decrease, demand decreases
#8
Which market structure is characterized by a large number of sellers, identical products, and easy entry and exit?
Monopoly
Oligopoly
Perfect competition
Monopolistic competition
#9
What is the law of diminishing marginal returns?
As output increases, the marginal cost decreases
As input increases, the marginal product decreases
As input decreases, the marginal product decreases
As output decreases, the marginal cost decreases
#10
What is the production possibility frontier (PPF) in economics?
A graph illustrating the maximum combinations of two goods that can be produced with available resources
A government agency responsible for regulating production
A market structure with only one seller
A method for determining equilibrium price and quantity in a market
#11
What is the formula for calculating elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Total revenue / Quantity demanded
Quantity demanded / Total revenue
#12
In microeconomics, what is the concept of utility?
The measure of total production in an economy
The satisfaction or pleasure derived from consuming a good or service
The percentage of income spent on goods and services
The cost of production for a firm
#13
What is the difference between explicit and implicit costs?
Explicit costs are monetary, while implicit costs are opportunity costs
Explicit costs are opportunity costs, while implicit costs are monetary
Both are monetary costs
Both are opportunity costs
#14
What is the role of a price ceiling in a market?
To set a maximum limit on the quantity of a good that can be produced
To prevent prices from falling below a certain level
To encourage competition among firms
To eliminate scarcity in the market
#15
What is the purpose of a production function in economics?
To determine the cost of production for a firm
To analyze consumer preferences
To illustrate the relationship between inputs and outputs in the production process
To set the optimal level of government intervention in the economy