#1
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and many sellers
One seller and many buyers
One buyer and many sellers
Few buyers and few sellers
#2
Which of the following is NOT a determinant of demand?
Consumer income
Price of related goods
Taxes
Technology
#3
What is the concept of 'opportunity cost'?
The cost of an item in terms of the next best alternative foregone
The total monetary cost incurred in purchasing an item
The cost of an item in terms of its production expenses
The revenue generated from selling an item
#4
Which market structure is characterized by a single seller with significant control over price?
Perfect competition
Monopoly
Oligopoly
Monopolistic competition
#5
Which of the following is a characteristic of a monopoly market?
Many buyers and many sellers
One seller and many buyers
One buyer and many sellers
Few buyers and few sellers
#6
Which of the following is a characteristic of monopolistic competition?
Homogeneous products
Many sellers and differentiated products
One seller and many buyers
Few sellers and identical products
#7
In microeconomics, what does 'elasticity' measure?
The responsiveness of quantity demanded to a change in price
The total revenue earned by a firm
The fixed costs incurred by a business
The market share of a product
#8
What is the primary objective of a monopolistically competitive firm?
Maximize profits
Minimize average total cost
Achieve economies of scale
Maximize market share
#9
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded divided by percentage change in price
Percentage change in price divided by percentage change in quantity demanded
Change in quantity demanded divided by change in price
Change in price divided by change in quantity demanded
#10
What happens to consumer surplus when price decreases in a market?
Consumer surplus increases
Consumer surplus decreases
Consumer surplus remains unchanged
It depends on the elasticity of demand
#11
What does the production possibility frontier (PPF) illustrate?
The trade-off between production of two goods given limited resources
The maximum output achievable by a firm
The relationship between price and quantity demanded
The market equilibrium point
#12
What does the law of diminishing marginal utility state?
As consumption of a good increases, marginal utility also increases
As consumption of a good increases, marginal utility decreases
As consumption of a good decreases, marginal utility decreases
Marginal utility remains constant regardless of consumption
#13
What is the relationship between marginal cost and marginal revenue in perfect competition when a firm is maximizing profit?
Marginal cost equals marginal revenue
Marginal cost is greater than marginal revenue
Marginal cost is less than marginal revenue
There is no relationship between marginal cost and marginal revenue
#14
What is the relationship between marginal revenue and price elasticity of demand for a monopolist?
Marginal revenue equals price elasticity of demand
Marginal revenue is greater than price elasticity of demand
Marginal revenue is less than price elasticity of demand
There is no relationship between marginal revenue and price elasticity of demand
#15
Which of the following is a characteristic of a perfectly elastic demand curve?
It is horizontal
It is vertical
It slopes downward from left to right
It is upward-sloping