#1
Which of the following is a characteristic of a perfectly competitive market structure?
Few sellers in the market
Product differentiation
Price taker behavior
Barriers to entry
#2
In microeconomics, what is the law of demand?
As price increases, quantity demanded increases
As price increases, quantity demanded decreases
As price decreases, quantity demanded increases
As price decreases, quantity demanded decreases
#3
What is a natural monopoly?
A monopoly that arises from exclusive government privileges
A monopoly that arises from economies of scale
A monopoly that arises from product differentiation
A monopoly that arises from collusion among firms
#4
What is the Prisoner's Dilemma in game theory?
A situation where both players in a game can benefit from cooperation, but each has an incentive to betray the other
A situation where one player wins everything and the other loses everything
A situation where both players always cooperate for mutual benefit
A situation where both players always betray each other for maximum gain
#5
What is the concept of price elasticity of demand?
The percentage change in quantity demanded divided by the percentage change in price
The absolute change in quantity demanded divided by the absolute change in price
The percentage change in price divided by the percentage change in quantity demanded
The absolute change in price divided by the absolute change in quantity demanded
#6
In oligopoly, what is the term used to describe a situation where firms implicitly coordinate their actions without explicit agreements?
Price leadership
Collusion
Cartel
Monopolistic competition
#7
What is the difference between explicit and implicit costs in economics?
Explicit costs refer to opportunity costs, while implicit costs refer to out-of-pocket expenses
Explicit costs are tangible, measurable costs, while implicit costs are intangible and difficult to measure
Explicit costs are the actual monetary payments made, while implicit costs are the foregone opportunities
Explicit costs only include variable costs, while implicit costs include fixed costs
#8
What is the concept of monopolistic competition?
A market structure with a large number of sellers producing identical products
A market structure with a small number of sellers producing differentiated products
A market structure with only one seller and no close substitutes
A market structure characterized by perfect information and no barriers to entry
#9
What is the law of diminishing marginal returns in economics?
As the quantity of a variable input increases, the total output increases at a decreasing rate
As the quantity of a variable input increases, the total output increases at an increasing rate
As the quantity of a variable input increases, the total output decreases
As the quantity of a variable input decreases, the total output increases
#10
What is the difference between allocative efficiency and productive efficiency?
Allocative efficiency focuses on minimizing costs, while productive efficiency focuses on maximizing output
Allocative efficiency focuses on distributing resources optimally, while productive efficiency focuses on minimizing waste
Allocative efficiency is achieved when firms produce at the lowest point of their average total cost curve, while productive efficiency is achieved when they produce at the minimum of their marginal cost curve
Allocative efficiency is only relevant in monopoly markets, while productive efficiency is relevant in perfectly competitive markets
#11
What is the difference between a normal good and an inferior good?
Normal goods have an elastic demand, while inferior goods have an inelastic demand
Normal goods are luxury items, while inferior goods are basic necessities
Normal goods have a positive income elasticity, while inferior goods have a negative income elasticity
Normal goods have a negative cross-price elasticity, while inferior goods have a positive cross-price elasticity
#12
What is the concept of deadweight loss in economics?
The loss of consumer surplus due to a tax or subsidy
The loss of producer surplus due to a price ceiling
The loss of total surplus due to market inefficiency
The loss of government revenue due to a quota
#13
What is the Nash equilibrium in game theory?
A situation where each player chooses their best strategy given the strategy chosen by the other player
A situation where each player maximizes their own utility without considering the other player's strategy
A situation where players always cooperate for mutual benefit
A situation where players always betray each other for maximum gain
#14
In the context of microeconomics, what does the term 'marginal utility' refer to?
The additional satisfaction or pleasure gained from consuming one more unit of a good
The total satisfaction or pleasure gained from consuming all units of a good
The total monetary value of consuming one more unit of a good
The additional cost incurred from consuming one more unit of a good
#15
What is the relationship between price elasticity and total revenue for a normal good?
As price increases, total revenue increases
As price increases, total revenue decreases
As price increases, total revenue remains constant
There is no consistent relationship between price and total revenue
#16
What is the Coase Theorem in economics?
A theorem stating that individuals will always act in their own self-interest
A theorem stating that in the absence of transaction costs, private bargaining will result in an efficient solution to the problem of externalities
A theorem stating that government intervention is always necessary to correct market failures
A theorem stating that monopolies are inherently inefficient and should be broken up by antitrust laws