#1
Which of the following is a characteristic of a perfectly competitive market?
Many buyers and sellers
Product differentiation
Barriers to entry
Price-setting power for individual firms
#2
In microeconomics, what is the term used to describe a situation where quantity supplied equals quantity demanded?
Elasticity
Market equilibrium
Monopoly
Price floor
#3
What is the main characteristic of a monopolistic competition market structure?
Single seller dominating the market
Homogeneous products
Perfectly elastic demand curve
Product differentiation
#4
In microeconomics, what is the term used to describe a situation where one firm can produce the entire market output at a lower cost than two or more firms?
Monopoly
Oligopoly
Perfect competition
Natural monopoly
#5
In a competitive market, what happens if the price is above the equilibrium price?
A surplus occurs, leading to downward pressure on price.
A shortage occurs, leading to upward pressure on price.
There is neither a surplus nor a shortage.
The market clears without any impact on price.
#6
What is the law of demand?
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 increases.
As the price of a good decreases, the quantity demanded decreases.
#7
Which of the following is a characteristic of a monopoly market structure?
Many firms producing similar goods
No barriers to entry
Price taker
Single seller dominating the market
#8
What is consumer surplus?
The amount a buyer is willing to pay minus the actual price
The amount a seller receives for a good minus the seller's cost
The difference between quantity demanded and quantity supplied
The area above the supply curve and below the market price
#9
What is the price elasticity of demand if a 10% increase in price leads to a 5% decrease in quantity demanded?
#10
What is the income elasticity of demand if a 10% increase in income leads to a 15% increase in quantity demanded of a normal good?
#11
Which of the following is an example of a positive externality?
Pollution from a factory
Traffic congestion
Education benefits to society
Noise pollution
#12
What is the formula for calculating price elasticity of demand?
Percentage change in quantity demanded / Percentage change in price
Percentage change in price / Percentage change in quantity demanded
Change in quantity demanded / Change in price
Change in price / Change in quantity demanded
#13
What is the difference between a change in quantity supplied and a change in supply?
A change in quantity supplied is caused by a change in price, while a change in supply is caused by factors other than price.
A change in quantity supplied is caused by factors other than price, while a change in supply is caused by a change in price.
Both a change in quantity supplied and a change in supply are caused by changes in price.
A change in quantity supplied and a change in supply are synonymous terms.
#14
What is the primary determinant of the price elasticity of demand?
The availability of substitutes
The time horizon
The income level of consumers
The price level of the good
#15
What effect would an increase in the price of a complementary good have on the demand curve of the original good?
Shift the demand curve to the left
Shift the demand curve to the right
No effect on the demand curve
Change the slope of the demand curve
#16
Which of the following is an example of a perfectly elastic demand?
Salt
Luxury cars
Airline tickets during peak season
Prescription drugs