#1
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and one seller
Few buyers and many sellers
One buyer and many sellers
One buyer and one seller
#2
What does the law of demand state?
As price increases, quantity demanded increases
As price decreases, quantity demanded increases
As price increases, quantity demanded decreases
As price decreases, quantity demanded decreases
#3
What does the term 'utility' refer to in economics?
The ability of a good or service to satisfy human wants
The total quantity of goods produced in a market
The amount of money an individual has
The level of competition in a market
#4
What is the opportunity cost of a decision?
The monetary cost of the decision
The value of the next best alternative forgone
The total cost of all available options
The cost of the decision multiplied by its benefits
#5
What is a characteristic of a monopolistic competition market structure?
Many buyers and many sellers with identical products
One buyer and many sellers
Few buyers and many sellers
Many buyers and many sellers with differentiated products
#6
What does the law of supply state?
As price increases, quantity supplied decreases
As price decreases, quantity supplied decreases
As price increases, quantity supplied increases
As price decreases, quantity supplied increases
#7
What is a market equilibrium?
When quantity demanded equals quantity supplied
When quantity demanded exceeds quantity supplied
When quantity supplied exceeds quantity demanded
When quantity demanded and quantity supplied are not equal
#8
What is a monopolistic competition characterized by?
Many buyers and many sellers with differentiated products
One buyer and one seller
Many buyers and one seller
Few buyers and many sellers
#9
What is the main function of a price floor?
To prevent prices from falling below a certain level
To prevent prices from rising above a certain level
To encourage producers to produce more goods
To encourage consumers to buy more goods
#10
What is the formula for calculating total revenue?
Price multiplied by quantity demanded
Price divided by quantity demanded
Price plus quantity demanded
Price minus quantity demanded
#11
What is the slope of the demand curve in a perfectly competitive market?
Positive
Negative
Horizontal
Vertical
#12
What is a production possibility frontier (PPF) used to represent?
The maximum price producers are willing to pay for goods
The maximum output combinations of two goods that can be produced with available resources
The minimum quantity of goods consumers are willing to purchase
The equilibrium price in a market
#13
What is the law of diminishing marginal utility?
As consumption of a good increases, its marginal utility decreases
As consumption of a good increases, its total utility decreases
As consumption of a good increases, its total utility increases
As consumption of a good increases, its marginal utility increases
#14
What does the term 'consumer surplus' represent?
The total amount of money consumers are willing to pay for a good
The difference between what consumers are willing to pay and what they actually pay
The total amount of money producers receive from selling a good
The difference between the price producers receive and the cost of production
#15
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
Total quantity demanded divided by price
Total quantity demanded multiplied by price
#16
What is a characteristic of an oligopoly market structure?
Many buyers and many sellers with differentiated products
One buyer and many sellers
Few buyers and many sellers
Few sellers with substantial market power
#17
What is price elasticity of demand?
A measure of how much quantity demanded responds to a change in price
A measure of how much quantity supplied responds to a change in price
A measure of how much consumers are willing to pay for a product
A measure of how much firms are willing to produce at a given price
#18
In a perfectly competitive market, firms are considered to be price takers because...
They have the power to influence market prices
They have no control over the market price
They have complete control over the market price
They have the power to set market prices
#19
What is a public good in economics?
A good that is both non-excludable and rival in consumption
A good that is excludable but non-rival in consumption
A good that is rival in consumption but non-excludable
A good that is both excludable and rival in consumption
#20
Which of the following is a characteristic of a monopoly?
Many buyers and many sellers with similar products
One buyer and many sellers
One buyer and one seller
One seller with no close substitutes
#21
What does the term 'elasticity' measure in economics?
The responsiveness of one variable to changes in another variable
The total quantity of goods demanded in a market
The total quantity of goods supplied in a market
The level of competition in a market
#22
In economics, what is a 'positive externality'?
A benefit enjoyed by individuals who consume a good or service
A cost suffered by individuals who consume a good or service
A benefit or cost that affects a party who did not choose to incur that benefit or cost
A benefit enjoyed by society as a whole, but not by those who provide it
#23
In economics, what is the 'income effect'?
The change in quantity demanded of a good due to a change in price
The change in quantity demanded of a good due to a change in consumer income
The change in quantity supplied of a good due to a change in price
The change in quantity supplied of a good due to a change in producer income
#24
What is the formula for calculating total cost?
Total variable cost divided by quantity produced
Total fixed cost divided by quantity produced
Total variable cost plus total fixed cost
Total variable cost minus total fixed cost
#25
What is the primary determinant of price elasticity of demand?
The availability of substitute goods
The level of consumer income
The size of the market
The number of sellers in the market