Microeconomics MCQs

What is the primary focus of microeconomics?

a. The economy as a whole
b. Individual markets and economic agents
c. Global trade patterns
d. Macroeconomic policy

Answer: b

In microeconomics, what does the law of demand state?

a. As prices increase, quantity demanded increases
b. As prices decrease, quantity demanded decreases
c. Prices and quantity demanded are unrelated
d. Demand remains constant regardless of price changes

Answer: b

What is the term for the additional cost incurred by producing one more unit of a good or service?

a. Marginal Cost
b. Average Cost
c. Total Cost
d. Fixed Cost

Answer: a

In microeconomics, what does the term “elasticity” measure?

a. The responsiveness of quantity demanded to a change in price
b. The total revenue of a firm
c. The average cost of production
d. The stability of market equilibrium

Answer: a

What is the term for a market structure characterized by many buyers and sellers, homogeneous products, and free entry and exit?

a. Oligopoly
b. Monopoly
c. Monopolistic Competition
d. Perfect Competition

Answer: d

In microeconomics, what does the term “opportunity cost” represent?

a. The explicit cost of production
b. The total cost of production
c. The value of the best alternative forgone when a decision is made
d. The fixed cost of production

Answer: c

What is the term for the point at which quantity supplied equals quantity demanded in a market?

a. Equilibrium Price
b. Market Price
c. Price Floor
d. Price Ceiling

Answer: a

In microeconomics, what is the law of diminishing marginal returns?

a. As production increases, marginal returns increase
b. As production increases, marginal returns decrease
c. Marginal returns are constant regardless of production levels
d. Marginal returns only apply to fixed inputs

Answer: b

What does the term “utility” refer to in microeconomics?

a. The total cost of production
b. The satisfaction or pleasure derived from consuming a good or service
c. The market demand for a product
d. The opportunity cost of production

Answer: b

In microeconomics, what is the term for a good for which demand increases as consumer income rises?

a. Normal Good
b. Inferior Good
c. Giffen Good
d. Complementary Good

Answer: a

What is the term for the total value of all final goods and services produced within a country in a given period?

a. Gross National Product (GNP)
b. Gross Domestic Product (GDP)
c. Net National Product (NNP)
d. Net Domestic Product (NDP)

Answer: b

In microeconomics, what is the term for the measure of how well resources are allocated in an economy?

a. Economic Growth
b. Economic Efficiency
c. Economic Equity
d. Economic Stability

Answer: b

What is the term for a legal maximum price set by the government, typically below the equilibrium price?

a. Price Ceiling
b. Price Floor
c. Market Price
d. Equilibrium Price

Answer: a

In microeconomics, what does the term “marginal revenue” represent?

a. The additional revenue from selling one more unit of a good
b. The total revenue of a firm
c. The average revenue per unit sold
d. The revenue earned at the equilibrium price

Answer: a

What is the term for a measure of the responsiveness of quantity demanded to a change in income?

a. Price Elasticity of Demand
b. Income Elasticity of Demand
c. Cross-Price Elasticity of Demand
d. Price Elasticity of Supply

Answer: b

In microeconomics, what does the term “perfect competition” imply about market power?

a. Firms have significant market power
b. Firms have no market power
c. Only a few firms dominate the market
d. Firms have moderate market power

Answer: b

What is the term for the measure of the responsiveness of quantity demanded to a change in the price of another good?

a. Price Elasticity of Demand
b. Income Elasticity of Demand
c. Cross-Price Elasticity of Demand
d. Price Elasticity of Supply

Answer: c

In microeconomics, what does the term “monopoly” refer to?

a. A market structure with many buyers and sellers
b. A market structure with one seller and many buyers
c. A market structure with a few large firms
d. A market structure with identical products

Answer: b

What is the term for a legal minimum price set by the government, typically above the equilibrium price?

a. Price Ceiling
b. Price Floor
c. Market Price
d. Equilibrium Price

Answer: b

In microeconomics, what is the term for the measure of how much the quantity demanded of a good responds to a change in price?

a. Price Elasticity of Demand
b. Income Elasticity of Demand
c. Cross-Price Elasticity of Demand
d. Price Elasticity of Supply

Answer: a

What is the term for a market structure characterized by a few large firms dominating the industry?

a. Oligopoly
b. Monopoly
c. Monopolistic Competition
d. Perfect Competition

Answer: a

In microeconomics, what is the term for the measure of how much the quantity supplied of a good responds to a change in price?

a. Price Elasticity of Demand
b. Income Elasticity of Demand
c. Cross-Price Elasticity of Demand
d. Price Elasticity of Supply

Answer: d

What is the term for a good for which demand decreases as consumer income rises?

a. Normal Good
b. Inferior Good
c. Giffen Good
d. Complementary Good

Answer: b

In microeconomics, what is the term for a firm’s total revenue minus its explicit and implicit costs?

a. Gross Profit
b. Net Income
c. Economic Profit
d. Accounting Profit

Answer: c

What is the term for a measure of how well-off a group or individual is, considering both income and the availability of goods and services?

a. Economic Growth
b. Economic Efficiency
c. Economic Equity
d. Economic Stability

Answer: c

In microeconomics, what is the term for a good that people consume more of as their income rises, but at a diminishing rate?

a. Normal Good
b. Inferior Good
c. Giffen Good
d. Luxury Good

Answer: d

What is the term for the quantity of a good that buyers are willing and able to purchase at a given price in a given period?

a. Quantity Supplied
b. Quantity Demanded
c. Market Quantity
d. Equilibrium Quantity

Answer: b

In microeconomics, what does the term “externalities” refer to?

a. The internal costs of production
b. The costs incurred by external parties due to economic activities
c. The internal benefits of consumption
d. The benefits enjoyed by external parties due to economic activities

Answer: b

What is the term for the quantity of a good that sellers are willing and able to sell at a given price in a given period?

a. Quantity Supplied
b. Quantity Demanded
c. Market Quantity
d. Equilibrium Quantity

Answer: a

In microeconomics, what does the term “price elasticity of supply” measure?

a. The responsiveness of quantity demanded to a change in price
b. The responsiveness of quantity supplied to a change in price
c. The responsiveness of quantity demanded to a change in income
d. The responsiveness of quantity supplied to a change in income

Answer: b