#1
Which of the following best defines microeconomics?
The study of individual economic units and markets
The study of the economy as a whole
The study of international trade
The study of government policies
#2
What does the law of demand state?
As the price of a good increases, the quantity demanded decreases
As the price of a good increases, the quantity demanded increases
As the price of a good decreases, the quantity demanded increases
As the price of a good decreases, the quantity demanded decreases
#3
What is the primary focus of microeconomics?
Government policies
Individual economic units and markets
Global economic trends
Macroeconomic aggregates
#4
What is the main determinant of elasticity of demand?
Price of the good
Income of consumers
Availability of substitutes
Number of consumers
#5
What does the term 'opportunity cost' refer to in economics?
The total cost of production
The highest price a consumer is willing to pay for a good
The value of the next best alternative foregone
The cost of inputs used in production
#6
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
#7
Which of the following is NOT a determinant of supply?
Technology
Resource prices
Income of consumers
Expectations about future prices
#8
Which of the following is a characteristic of a perfectly competitive market?
High barriers to entry
Product differentiation
Price maker
Many buyers and sellers
#9
What happens to equilibrium price and quantity when demand increases and supply remains constant?
Price increases and quantity decreases
Price decreases and quantity increases
Price and quantity both increase
Price and quantity both decrease
#10
Which market structure is characterized by a large number of firms selling similar but not identical products?
Perfect competition
Monopoly
Oligopoly
Monopolistic competition
#11
In which market structure does a single firm dominate the entire market?
Perfect competition
Monopoly
Oligopoly
Monopolistic competition
#12
What is the main characteristic of a monopolistically competitive market?
There is only one seller
There are few sellers, each offering identical products
There are many sellers, each offering similar but differentiated products
There are many buyers and many sellers, with no single buyer or seller having a significant impact on market price
#13
Which of the following is NOT a characteristic of perfect competition?
Homogeneous products
Easy entry and exit
Price setting power for individual firms
Perfect information
#14
Which of the following is a characteristic of a monopoly market structure?
Many firms producing identical products
Price taker
Single seller with significant market power
Highly differentiated products
#15
What is the main objective of a firm operating in a monopolistically competitive market?
Maximize profit
Set market price
Increase market share
Collude with competitors