Principles of Microeconomics in Competitive Markets Quiz
Test your knowledge on microeconomics with questions on demand, supply, market structures, elasticity, and more.
#1
In economics, what does the term 'ceteris paribus' mean?
All else being equal
Demand exceeding supply
Government intervention
Market equilibrium
#2
What is the formula for calculating total revenue?
Total revenue = Price × Quantity
Total revenue = Price ÷ Quantity
Total revenue = Price - Quantity
Total revenue = Quantity - Price
#3
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 decreases
As the price of a good decreases, the quantity demanded increases
#4
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers
Barriers to entry
Control over prices by individual firms
Product differentiation
#5
What does the demand curve represent in microeconomics?
The quantity of goods demanded at different prices
The quantity of goods supplied at different prices
The relationship between price and income
The elasticity of demand
#6
What is the profit-maximizing rule for firms in a perfectly competitive market?
Produce where marginal cost equals marginal revenue
Produce where marginal cost exceeds marginal revenue
Produce where total cost equals total revenue
Produce where total cost exceeds total revenue
#7
What is the law of diminishing marginal utility?
As the quantity of a good consumed increases, the marginal utility decreases
As the quantity of a good consumed increases, the total utility decreases
As the price of a good increases, the demand decreases
As the price of a good decreases, the demand increases
#8
What is a monopolistic competition market structure characterized by?
A large number of firms selling identical products
A single firm dominating the market
A few firms dominating the market with differentiated products
No barriers to entry or exit
#9
What is the long-run equilibrium condition for firms in perfect competition?
Price equals average total cost
Price equals marginal cost
Price equals average variable cost
Price equals marginal revenue
#10
What is the difference between explicit and implicit costs?
Explicit costs are monetary costs, while implicit costs are non-monetary costs
Explicit costs are long-term costs, while implicit costs are short-term costs
Explicit costs are opportunity costs, while implicit costs are fixed costs
Explicit costs are variable costs, while implicit costs are fixed costs
#11
What is an externality in economics?
A situation where demand exceeds supply
A side effect of a transaction affecting a third party
A legal restriction on trade
The difference between social and private costs
#12
What is a characteristic of a perfectly elastic demand curve?
It is horizontal
It is vertical
It is upward-sloping
It is downward-sloping
#13
What is the price elasticity of demand for a perfectly elastic demand curve?
Zero
Less than one
Greater than one
Infinity
#14
What does a perfectly inelastic demand curve look like?
Horizontal
Vertical
Upward-sloping
Downward-sloping
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