Marginal Analysis Quiz
Explore key concepts like marginal cost, revenue, utility, and more with 13 questions on microeconomics marginal analysis. Test yourself now!
#1
What does marginal analysis study?
Total cost
Additional or incremental changes
Fixed costs
Average costs
#2
In economics, what does the law of diminishing marginal utility state?
As the quantity of a good consumed increases, its marginal utility decreases.
As the quantity of a good consumed increases, its marginal utility increases.
Marginal utility remains constant regardless of the quantity consumed.
There is no relation between quantity consumed and marginal utility.
#3
What is the formula for marginal cost?
MC = (Change in Total Cost) / (Change in Quantity)
MC = Total Cost / Quantity
MC = Change in Quantity / Change in Total Cost
MC = Total Cost * Quantity
#4
What does a negative marginal cost imply?
The firm is making a loss.
The firm is in equilibrium.
The firm is making a profit.
The firm is experiencing diminishing returns.
#5
What does the marginal revenue curve look like for a perfectly competitive firm?
Horizontal line
Vertical line
Upward sloping line
Downward sloping line
#6
In production theory, what does the marginal product of labor measure?
The additional output produced by hiring one more unit of labor.
The average output produced by each unit of labor.
The total output produced by all units of labor.
The total cost of hiring one more unit of labor.
#7
What does the marginal rate of substitution measure in consumer theory?
The rate at which a consumer is willing to substitute one good for another while maintaining the same level of utility.
The rate at which a consumer's budget constraint changes.
The rate at which a consumer's income changes.
The rate at which a consumer's utility changes.
#8
Which of the following best describes the concept of opportunity cost?
The total cost of producing one additional unit of a good.
The value of the next best alternative forgone when a decision is made.
The average cost of producing a unit of a good.
The cost of inputs required to produce a unit of a good.
#9
What happens to the marginal cost curve when there are economies of scale?
It slopes downward.
It slopes upward.
It becomes horizontal.
It becomes vertical.
#10
Which of the following is NOT a determinant of the elasticity of demand for a good?
The number of close substitutes available.
The necessity of the good.
The proportion of income spent on the good.
The price of complementary goods.
#11
What is the relationship between marginal revenue and marginal cost at profit-maximizing output?
Marginal revenue equals marginal cost.
Marginal revenue exceeds marginal cost.
Marginal revenue is less than marginal cost.
Marginal revenue and marginal cost have no relationship.
#12
In managerial economics, what is the significance of the marginal cost curve crossing the average total cost curve at its minimum point?
It indicates economies of scale.
It indicates diseconomies of scale.
It indicates the shutdown point.
It indicates the profit-maximizing level of output.
#13
What does the marginal propensity to save (MPS) measure?
The proportion of income that individuals consume.
The proportion of income that individuals save.
The proportion of wealth that individuals consume.
The proportion of wealth that individuals save.
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