Microeconomics Principles and Analysis Quiz

Perfect competition entails numerous buyers and sellers operating in the market.

The law of demand asserts an inverse relationship between price and quantity demanded.

The PPF model assumes limited resources, necessitating choices in production.

Positive externality occurs when a third party benefits from an activity, like decreased illness due to vaccination.

Regressive tax takes a higher percentage from low-income earners, such as sales tax.

Monopolistic competition features a limited number of sellers offering similar but differentiated products.

Price elasticity of demand quantifies the responsiveness of quantity demanded to changes in price.

Total revenue is determined by multiplying the price of a good by the quantity demanded.

A natural monopoly exists when one firm can efficiently serve the entire market due to cost advantages.

Public goods are non-excludable, meaning individuals cannot be effectively excluded from consumption.

Oligopoly is characterized by a small number of firms dominating the market, often selling similar products.

Marginal cost represents the change in total cost resulting from producing one more unit of output.

Monopolistic monopoly involves few firms offering differentiated products with market power.

Average total cost represents the total cost per unit of output.

Price discrimination occurs when a firm charges different prices to different customers for the same product.