#1
Which of the following best describes the law of demand?
As price increases, quantity demanded decreases
As price increases, quantity demanded increases
As price decreases, quantity supplied decreases
As price decreases, quantity demanded decreases
#2
What is the term used to describe a market structure with many buyers and sellers, homogenous products, and ease of entry and exit?
Monopoly
Oligopoly
Perfect competition
Monopolistic competition
#3
What does the term 'utility' refer to in microeconomics?
The total revenue of a firm
The total cost of production
The satisfaction derived from consuming goods and services
The level of competition in a market
#4
Which of the following is a characteristic of a perfectly elastic demand curve?
It is vertical
It is horizontal
It is upward-sloping
It is downward-sloping
#5
What is the main assumption of the law of supply?
Producers aim to maximize profits
Consumers aim to maximize utility
Prices remain constant
All factors of production are variable
#6
What is the primary goal of a firm in a perfectly competitive market?
To maximize revenue
To minimize costs
To maximize profit
To maintain market share
#7
Which of the following statements best describes price elasticity of demand?
It measures how much quantity demanded responds to a change in price
It measures how much quantity supplied responds to a change in price
It measures how much income changes with a change in price
It measures how much consumer preferences affect demand
#8
What does a price ceiling imposed by the government on a particular good usually result in?
A surplus of the good
A shortage of the good
An increase in the price of the good
A decrease in the price of the good
#9
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Change in quantity demanded / Change in price
Change in price / Change in quantity demanded
#10
In economics, what is the term used to describe the situation where a firm is producing at the lowest possible cost per unit?
Productivity maximization
Profit maximization
Cost minimization
Revenue maximization
#11
Which of the following is a characteristic of a monopolistic competition market structure?
Homogeneous products
Few firms dominating the market
Price taker firms
Product differentiation
#12
What does the term 'marginal utility' refer to in microeconomics?
The total satisfaction derived from consuming a good
The additional satisfaction from consuming one more unit of a good
The total utility derived from consuming a good
The utility derived from the first unit of a good
#13
In a perfectly competitive market, what condition ensures that firms earn zero economic profit in the long run?
No barriers to entry or exit
High barriers to entry
Government subsidies
Monopoly power
#14
Which of the following factors would cause the supply curve to shift to the right?
An increase in the price of substitutes
A decrease in production costs
A decrease in consumer income
A decrease in the number of producers
#15
In the long run, what happens to the number of firms in a perfectly competitive market if firms are earning economic profits?
New firms enter the market, increasing the number of firms
Existing firms exit the market, decreasing the number of firms
The number of firms remains constant
The number of firms fluctuates randomly
#16
In a monopolistic market structure, what distinguishes each firm's product?
Price
Quality
Brand
Substitutes
#17
What is a characteristic of a natural monopoly?
High barriers to entry
Many firms competing in the market
Perfectly elastic demand curve
Low economies of scale