#1
What is the law of demand in microeconomics?
As the price of a good increases, the quantity demanded decreases, and vice versa.
ExplanationInverse relationship between price and quantity demanded.
#2
Which of the following is a characteristic of a perfectly competitive market?
Numerous buyers and sellers
ExplanationPresence of many buyers and sellers.
#3
What is the formula to calculate price elasticity of demand?
Percentage change in price / Percentage change in quantity demanded
ExplanationPercentage change in price relative to percentage change in quantity.
#4
What does the term 'opportunity cost' refer to in microeconomics?
The value of the next best alternative forgone when a decision is made
ExplanationCost of the next best alternative.
#5
What is the formula to calculate marginal revenue?
Change in total revenue / Change in quantity
ExplanationChange in revenue per unit change in quantity.
#6
In microeconomics, what does the term 'oligopoly' refer to?
A market structure with a few large firms
ExplanationMarket dominated by a small number of firms.
#7
What is the 'price ceiling' in microeconomics?
A maximum price set by the government below the equilibrium price
ExplanationGovernment-set maximum price.
#8
What is a 'Giffen good' in microeconomics?
A good for which demand increases as the price increases
ExplanationGoods with upward-sloping demand curves.
#9
What does the 'Pareto efficiency' concept in microeconomics imply?
There is no way to make one person better off without making someone else worse off
ExplanationNo allocation can make someone better off without harming others.
#10
What is the 'externality' in microeconomics?
A side effect of a transaction that affects third parties
ExplanationImpact on third parties not involved in transaction.
#11
What does 'perfect price discrimination' mean in microeconomics?
When a firm charges different prices to different groups based on their willingness to pay
ExplanationCharging the highest price each consumer is willing to pay.
#12
What is the 'long-run average cost curve' in microeconomics?
A curve that shows the lowest possible average total cost of producing each quantity of output
ExplanationCurve depicting minimum cost per unit at each output level.