#1
1. What does the law of demand state?
As price increases, quantity demanded increases.
As price increases, quantity demanded decreases.
As price decreases, quantity demanded increases.
As price decreases, quantity demanded decreases.
#2
6. What is the difference between a change in quantity supplied and a change in supply?
A change in quantity supplied is caused by a shift in the supply curve.
A change in supply is a movement along the supply curve.
A change in quantity supplied is a shift in the demand curve.
A change in supply is a movement along the demand curve.
#3
11. What is the concept of price elasticity of supply?
A measure of how responsive quantity supplied is to a change in price.
The total quantity supplied in the market.
The ratio of quantity supplied to quantity demanded.
A measure of producer satisfaction.
#4
16. What is the concept of consumer surplus?
The difference between the maximum price a consumer is willing to pay and the actual price paid.
The total amount of money consumers spend on goods and services.
The difference between the total quantity demanded and the total quantity supplied.
The difference between the minimum price a consumer is willing to pay and the actual price paid.
#5
21. What is the concept of consumer equilibrium in microeconomics?
The point where the consumer's budget constraint intersects the production possibilities frontier.
The point where the consumer maximizes utility given their budget constraint.
The point where the consumer minimizes utility given their budget constraint.
The point where the consumer is indifferent to changes in prices.
#6
2. Which factor does NOT typically influence demand?
Price of the product
Consumer preferences
Income of consumers
Cost of production
#7
3. What is the elasticity of demand?
A measure of how responsive quantity demanded is to a change in price.
The total quantity demanded in the market.
The ratio of quantity demanded to quantity supplied.
A measure of consumer satisfaction.
#8
7. What is the law of diminishing marginal returns?
As more units of a variable input are added to a fixed input, the marginal product of the variable input increases.
As more units of a variable input are added to a fixed input, the marginal product of the variable input decreases.
The total product of a firm always increases with the addition of more variable inputs.
The marginal product of a variable input remains constant regardless of the quantity of the input used.
#9
8. What is the difference between normal goods and inferior goods?
Normal goods are luxury items, while inferior goods are necessities.
Normal goods are goods for which demand decreases as income increases, and inferior goods are the opposite.
Normal goods are necessities, while inferior goods are luxury items.
Normal goods are goods for which demand increases as income increases, and inferior goods are the opposite.
#10
12. What is the cross-price elasticity of demand?
A measure of how responsive the quantity demanded of one good is to a change in the price of another good.
The total quantity demanded in the market for two goods combined.
The ratio of quantity demanded for two complementary goods.
A measure of the overall elasticity of demand in the market.
#11
13. What is a price floor, and how does it impact the market?
A government-imposed minimum price for a good or service.
A situation where supply exceeds demand.
A pricing strategy adopted by firms to minimize profits.
The equilibrium price in the market.
#12
4. What is a price ceiling?
A government-imposed maximum price for a good or service.
A situation where demand exceeds supply.
A pricing strategy adopted by firms to maximize profits.
The equilibrium price in the market.
#13
5. In a perfectly competitive market, what is true about the price and output of each firm?
They can set their own price and output levels.
They take the market price as given and produce at the profit-maximizing level.
They collaborate with other firms to set prices collectively.
They have no influence on the market price or output.
#14
9. What is a subsidy, and how does it affect the market?
A subsidy is a tax imposed on producers, leading to an increase in prices.
A subsidy is a payment from the government to producers, leading to a decrease in prices.
A subsidy is a payment from the government to consumers, leading to a decrease in prices.
A subsidy is a tax imposed on consumers, leading to an increase in prices.
#15
10. What is the difference between a movement along the demand curve and a shift of the demand curve?
A movement is caused by a change in price, while a shift is caused by a change in quantity demanded.
A movement is caused by a change in quantity demanded, while a shift is caused by a change in price.
A movement is a change in both price and quantity demanded, while a shift is a change in only price.
A movement is a change in both price and quantity demanded, while a shift is a change in factors other than price.
#16
14. What is the difference between a normal profit and an economic profit?
A normal profit is the minimum profit required to keep a business running, while economic profit includes opportunity costs.
A normal profit is the maximum profit achievable, while economic profit considers only explicit costs.
A normal profit is the profit earned in a perfectly competitive market, while economic profit is the profit in a monopolistic market.
A normal profit is the profit earned in the short run, while economic profit is the profit in the long run.
#17
15. In a market with perfectly elastic demand, how does the firm set its price?
By following the market price.
By setting a price lower than the market price.
By setting a price higher than the market price.
By collaborating with other firms to set prices collectively.