#1
What is the concept of 'opportunity cost' in microeconomics?
The cost of the next best alternative foregone when a decision is made
The explicit monetary cost of a decision
The total cost of production
The cost incurred in bringing a product to market
#2
In microeconomics, what does the term 'elasticity' measure?
The slope of the demand curve
The responsiveness of quantity demanded to a change in price
The total revenue of a firm
The market equilibrium
#3
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers
Barriers to entry for new firms
Product differentiation
Price-setting power for individual firms
#4
What does the term 'utility' represent in microeconomics?
The total revenue of a firm
The satisfaction or pleasure derived from consuming goods and services
The market demand curve
The price elasticity of demand
#5
What does the term 'externality' refer to in microeconomic analysis?
The cost of production incurred by a firm
A side effect or consequence of an economic activity that affects other parties
The total revenue generated by a firm
The level of output at which average variable cost equals marginal cost
#6
Which of the following is a characteristic of a monopoly market structure?
Many buyers and many sellers
Barriers to entry for new firms
Product differentiation
Price-setting power for individual firms
#7
In microeconomics, what does the term 'marginal revenue' represent?
The additional revenue from selling one more unit of a good
The total revenue divided by the quantity sold
The revenue earned from the last unit sold
The change in total revenue divided by the change in quantity sold
#8
In microeconomics, what is the role of the production possibility frontier (PPF)?
To illustrate the impact of taxes on consumer behavior
To show the maximum combination of goods and services that can be produced with available resources
To analyze the impact of changes in interest rates on investment
To determine the equilibrium price in a competitive market
#9
What is the formula for calculating the marginal cost of production?
MC = TC/Q
MC = ΔTC/ΔQ
MC = Q/TC
MC = 1 - Q/TC
#10
In microeconomic analysis, what does the term 'Pareto efficiency' refer to?
Allocative efficiency
Productive efficiency
Efficiency achieved when no one can be made better off without making someone worse off
Efficiency achieved at the point where marginal cost equals marginal benefit
#11
In microeconomics, what is the Law of Diminishing Marginal Returns?
As the quantity of a good consumed increases, the marginal utility also increases
As more units of a variable input are added to fixed inputs, the marginal product of the variable input eventually diminishes
The price of a good decreases as its quantity demanded increases
Firms produce at the level where marginal cost equals average total cost
#12
What is the primary focus of game theory in microeconomics?
The study of market structures
The analysis of strategic interactions among rational decision-makers
The determination of price and output levels
The impact of government intervention on economic outcomes
#13
What is the formula for calculating the price elasticity of demand?
PED = (Q2 - Q1) / (P2 - P1)
PED = (P2 - P1) / (Q2 - Q1)
PED = ΔQ / ΔP
PED = ΔP / ΔQ
#14
What is the significance of the 'Laffer curve' in microeconomics?
It illustrates the relationship between inflation and unemployment
It depicts the relationship between tax rates and tax revenue
It explains the concept of diminishing marginal utility
It represents the impact of externalities on market outcomes
#15
What is the formula for calculating the average variable cost (AVC) of production?
AVC = TC / Q
AVC = VC / Q
AVC = ΔVC / ΔQ
AVC = MC - AFC