#1
Which of the following is NOT a characteristic of a perfectly competitive market?
High barriers to entry
ExplanationEasy entry and exit of firms
#2
In economics, what does 'demand' refer to?
The quantity of a good or service that consumers are willing and able to buy at a given price over a period of time
ExplanationConsumer willingness and ability to purchase goods
#3
In economics, what does the term 'equilibrium price' refer to?
The price at which quantity demanded equals quantity supplied
ExplanationBalanced market condition
#4
What does the term 'market equilibrium' indicate?
A situation where quantity supplied equals quantity demanded
ExplanationSupply and demand balance
#5
Which of the following is a characteristic of a perfectly competitive market?
Products are identical
ExplanationHomogeneous goods offered
#6
Which of the following is an example of a positive externality?
Increased property values due to a new park in the neighborhood
ExplanationBenefits enjoyed by third parties
#7
What does the term 'elasticity' measure in economics?
The responsiveness of quantity demanded to changes in price
ExplanationSensitivity of demand to price changes
#8
What is the primary function of a price ceiling in a market?
To prevent prices from rising above a certain level
ExplanationMaximum price restriction
#9
Which of the following is a characteristic of a monopolistic competition market structure?
Product differentiation
ExplanationDiverse product offerings
#10
What is the primary function of a subsidy in the context of markets?
To increase the quantity demanded of a good
ExplanationGovernment support for production or consumption
#11
According to the law of diminishing marginal returns, what happens as more units of a variable input are added to a fixed input?
Average product decreases
ExplanationDecline in productivity of additional units
#12
What is the primary determinant of the price elasticity of demand for a good?
The number of substitutes available
ExplanationAvailability of alternative products
#13
Which of the following is a characteristic of a command economy?
Centralized planning by the government
ExplanationGovernment control over resource allocation
#14
What is the relationship between marginal cost (MC) and average total cost (ATC) when MC is below ATC?
MC is decreasing and below ATC
ExplanationAverage cost declining as marginal cost decreases