#1
What is market equilibrium in microeconomics?
The point where supply equals demand
ExplanationBalanced point of supply and demand.
#2
In microeconomics, what does the term 'utility' refer to?
The satisfaction or pleasure a consumer derives from consuming a good or service
ExplanationConsumer's satisfaction from consumption.
#3
In microeconomics, what is the meaning of 'price floor'?
A government-imposed minimum price that is above the market equilibrium
ExplanationLegal minimum price set above market equilibrium.
#4
Which of the following is a determinant of price elasticity of demand?
The availability of close substitutes
ExplanationAvailability of alternative options.
#5
In the context of microeconomics, what does 'elastic' demand mean?
A large change in quantity demanded for a small change in price
ExplanationSignificant response in quantity due to price change.
#6
What is the purpose of the production possibilities frontier (PPF) in microeconomics?
To represent the maximum output combinations of two goods with given resources and technology
ExplanationGraphical depiction of production limits.
#7
What is the cross-price elasticity of demand?
The percentage change in the quantity demanded of one good divided by the percentage change in the price of another good
ExplanationMeasure of responsiveness between two goods' prices.
#8
What is the main factor that determines the price elasticity of supply?
The time horizon considered
ExplanationTime frame affecting supply responsiveness.
#9
What is the Law of Diminishing Marginal Utility in microeconomics?
As the quantity of a good consumed increases, the marginal utility decreases
ExplanationDecreasing additional satisfaction with more consumption.