A Microeconomics Intelligence MCQ Test!

33 Questions | Total Attempts: 130

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A Microeconomics Intelligence MCQ Test!

Do you know anything about microeconomics, and do you think you can pass this quiz? Microeconomics is a branch of economics that studies people's behavior in making decisions concerning the distribution of scarce resources and the connections among these individuals. The main goal of economics is to examine the market processes that establish prices and services. If you want to learn more about microeconomics, take this quiz!


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

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