A Microeconomics Intelligence MCQ Test!
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- 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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