#1
1. What is the law of demand in microeconomics?
As price increases, quantity demanded decreases
ExplanationHigher prices reduce demand.
#2
6. What is the law of diminishing marginal utility in microeconomics?
As consumption increases, marginal utility decreases
ExplanationEach additional unit brings less satisfaction.
#3
11. In microeconomics, what does the term 'elasticity of supply' measure?
The responsiveness of quantity supplied to a change in price
ExplanationHow quantity supplied changes with price.
#4
16. In microeconomics, what is the purpose of the Laffer Curve?
To show the impact of taxes on government revenue
ExplanationIllustrates tax revenue's sensitivity to tax rates.
#5
21. In microeconomics, what is the concept of price discrimination?
Charging different prices for the same product to different consumers
ExplanationVarying prices based on consumer segments.
#6
2. Which market structure is characterized by a large number of buyers and sellers with identical products?
Perfect competition
ExplanationMany buyers and sellers with homogeneous goods.
#7
3. What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
ExplanationMeasures responsiveness of quantity demanded to price changes.
#8
7. Which factor is NOT considered a determinant of demand in microeconomics?
Production costs
ExplanationPrice of the good itself is not a determinant.
#9
8. What is the key characteristic of a perfectly elastic demand curve?
It is horizontal
ExplanationQuantity demanded changes infinitely with price.
#10
12. What is the main characteristic of a monopolistic competition market structure?
Few sellers with differentiated products
ExplanationMany sellers with slightly different products.
#11
4. In microeconomics, what does the term 'opportunity cost' refer to?
The cost of the next best alternative foregone
ExplanationValue of the best alternative forgone.
#12
5. What is the Nash Equilibrium in game theory?
A situation where each player maximizes their own payoff given the strategies chosen by others
ExplanationOptimal strategy considering opponents' strategies.
#13
9. In microeconomics, what is the role of a production possibility frontier (PPF)?
To show the maximum output combinations of two goods given available resources
ExplanationIllustrates resource allocation possibilities.
#14
10. What is the Coase Theorem in microeconomics?
The idea that private parties can negotiate and solve externalities without government intervention
ExplanationPrivate bargaining resolves externalities.
#15
14. What is the difference between explicit and implicit costs in microeconomics?
Explicit costs are incurred directly, while implicit costs are opportunity costs
ExplanationVisible vs. hidden expenses.