A Microeconomics Intelligence MCQ Test!

33 Questions | Total Attempts: 116

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Microeconomics Quizzes & Trivia

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Questions and Answers
  • 1. 
    "All production takes place in the short-run" "All [...] takes place in the long-run"
  • 2. 
    A good definition of short-run?
    • A. 

      Period of time in which all factors of production are variable

    • B. 

      Period in time in which all factors of production are fixed

    • C. 

      Period of time in which at least one factor of production is fixed

    • D. 

      400m hurdles

  • 3. 
    "The total output that a firm produces" What is being defined?
    • A. 

      Total cost

    • B. 

      Total revenue

    • C. 

      Total product

    • D. 

      Total queuing

  • 4. 
    Define "total fixed cost":
    • A. 

      Total cost of a firm's fixed assets in a given time period

    • B. 

      The complete costs of producing output

    • C. 

      Costs to a firm as all of its factors of production are variable

  • 5. 
    Write down the two letters signifying the following concept: "The extra revenue that a firm gains from selling one more unit of a product"
  • 6. 
    Total profit = Total revenue - (fixed costs + variable costs)
    • A. 

      True

    • B. 

      False

  • 7. 
    A firm's good is produced at the lowest possible average cost. The firm is hence ...
    • A. 

      Socially efficient

    • B. 

      Productively efficient

    • C. 

      Allocatively efficient

    • D. 

      Oligopolistically efficient

  • 8. 
    "A monopoly is a market with a [...]"
  • 9. 
    "When a firm's total revenue does not only cover but exceeds total costs including opportunity costs" What is being defined?
    • A. 

      Normal profit

    • B. 

      Accounting profit

    • C. 

      Abnormal profit

    • D. 

      Accounting cost

  • 10. 
    "[...] is the revenue that a firm receives per unit of its sales"
  • 11. 
    "The shut-down price is the level of price that enables a firm to cover its [...] in the short-run"
  • 12. 
    Which definitions work well as definitions of "economies of scale" (a) When, as a result of increasing the scale of output, the cost per unit output falls (b) Any decreases in long-run average costs that come about when a firm alters all of its factors of production to increase its scale of output (c) As extra units of a variable factor are added to a given quantity of a fixed factor, the output from each additional unit will eventually diminish
    • A. 

      (a) and (b)

    • B. 

      Only b

    • C. 

      (b) and (c)

    • D. 

      (a), (b), and (c)

  • 13. 
    The IB does not require candidates to define "oligopoly", but to provide good explanations of it. Which of the following is not a suitable part of such an explanation?
    • A. 

      Oligopoly is where a few firms dominate an industry

    • B. 

      In most oligopolies, there are distinct barriers to entry

    • C. 

      In oligopolies, firms are generally interdependent

    • D. 

      In oligopolies, the largest firms generally have a relatively low percentage market share

  • 14. 
    A good definition of allocative efficiency?
    • A. 

      When suppliers are producing at the lowest possible average cost

    • B. 

      When suppliers are making just enough revenue to cover its variable costs in the short-run

    • C. 

      When suppliers are producing the optimal mix of goods and services required by consumers

    • D. 

      When suppliers are making just enough revenue to avoid frictional unemployment

  • 15. 
    Marginal product is the extra output produced by using an extra unit of the [...]
  • 16. 
    Which of the following is not an assumption of monopolistic competition?
    • A. 

      Relative to the size of the industry, the firms are small

    • B. 

      There are very low barriers to entry

    • C. 

      The firms tend to be productively, but not allocatively efficient

    • D. 

      Product differentiation is present

  • 17. 
    "A market with only a few buyers or one single buyer" What is being defined
    • A. 

      Monopoly

    • B. 

      Oligopoly

    • C. 

      Monopolistic competition

    • D. 

      Monopsony

  • 18. 
    Using labor in a more efficient manner is known as ...
    • A. 

      Technical economies

    • B. 

      Managerial economies

    • C. 

      Labor force

    • D. 

      Forced labor

  • 19. 
    When there is only sufficient economies of scale for one firm in an industry, the monopoly developed is said to be ...
  • 20. 
    Which of the following is not a shared feature considering technical economies and managerial economies?
    • A. 

      Both are "tools" that may lead to economies of scale

    • B. 

      Both are concerned with with using factors of production more efficiently

    • C. 

      Both are concerned with decreasing average costs of production to enable a greater output

    • D. 

      Both are concerned with getting the most out of existing capital

  • 21. 
    "The threat of compeition will lead firms to adjust their price and output" What is being described?
    • A. 

      Law of eventually diminishing returns

    • B. 

      Theory of contestable markets

    • C. 

      Theory of queuing

    • D. 

      Competitive behavior

  • 22. 
    A legal unit of production with 1 or more stores and 1 or more employees is a ...
  • 23. 
    "When, as a result of increasing the scale of output, the cost per unit output rises" The concept defined is?
  • 24. 
    A firm's "accounting costs" do not include its opportunity costs. Hence, accounting costs can be defined as:
    • A. 

      Costs that have nothing to do with the next best thing you did not buy

    • B. 

      Costs which must be covered to make normal profits

    • C. 

      Costs which have a money value

  • 25. 
    Accounting profit can be defined by using a formula. Which formula?
    • A. 

      Accounting cost + Normal profit

    • B. 

      Total revenue - Total cost

    • C. 

      Total revenue - Accounting cost

    • D. 

      Fixed cost + Variable cost