ThatQuiz Test Library Take this test now
The Economics of Microeconomics - Test
Contributed by: Hayward
  • 1. What is the primary focus of microeconomics?
A) Individual markets and consumer behavior
B) International trade policies
C) Global economic growth
D) National monetary policies
  • 2. Which of the following describes a perfectly competitive market?
A) Many buyers and sellers with identical products
B) One seller dominating the market
C) Products that are vastly different
D) A few large companies controlling the market
  • 3. What is meant by elasticity of demand?
A) The relationship between price and income
B) The stability of demand over time
C) The total quantity demanded at a fixed price
D) The responsiveness of quantity demanded to price changes
  • 4. What are externalities?
A) Internal costs of production
B) Economic benefits limited to direct participants
C) Costs or benefits affecting third parties not involved in a transaction
D) Transactions with no consequences
  • 5. What is the function of a subsidy?
A) To enhance government profits
B) To increase tax revenue from consumers
C) To control the market price directly
D) To encourage production or consumption by lowering costs
  • 6. What does the term 'opportunity cost' refer to?
A) The total cost including fixed and variable costs
B) The monetary cost of production
C) The value of the next best alternative foregone
D) The cost of the goods produced
  • 7. What does the term 'market failure' refer to?
A) Inefficient distribution of goods in the market
B) Stable market prices
C) Perfect allocation of resources
D) Guaranteed profits for all firms
  • 8. What is consumer surplus?
A) The difference between what consumers are willing to pay and what they actually pay
B) The total amount spent by consumers
C) The total utility derived from a product
D) The profit earned by sellers
  • 9. Which concept describes diminishing marginal returns?
A) More inputs always result in more output
B) Total output remains constant
C) As more of a variable input is added, the additional output decreases
D) Returns increase indefinitely with scaling
  • 10. What do we call the situation where a single firm controls the entire market supply?
A) Monopolistic competition.
B) Oligopoly.
C) Monopoly.
D) Perfect competition.
  • 11. What is a complementary good?
A) A good whose demand increases when the price of another good decreases
B) A good whose demand is unrelated to other goods
C) A good that serves the same purpose as another
D) A good that is always purchased together in fixed quantities
Created with That Quiz — where test making and test taking are made easy for math and other subject areas.