Are You Intelligent Enough To Pass This Quiz On Microeconomics?

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Are You Intelligent Enough To Pass This Quiz On Microeconomics?

The following quiz deals with the subject of microeconomics, a study which analyses how a firm or individual who owns a company, or even just wants to manage their own finances and assets, might be able to effectively and efficiently allocate scarce resources in appropriate ways. Are you intelligent enough to get full marks on this quiz? Answer the questions and we’ll see if you are!


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. 
    • 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

  • 26. 
    A formal collusive agreement is a ...
  • 27. 
    An oligopoly where firms set prices and decide on advertising etc. by observing other firms in the industry is a ...
    • A. 

      Tacit collusion

    • B. 

      Non-collusive oligopoly

    • C. 

      Cartel

    • D. 

      Sunk cost

  • 28. 
    When different prices are charged for the same product due to different costs of production, this is known as ...
    • A. 

      Price discirmination

    • B. 

      Product discrimination

    • C. 

      Product differentiation

    • D. 

      Price differentiation

  • 29. 
    A demerit good is a good with ...
  • 30. 
    When a good is excludable and rivalrous, it is said to be a ...
  • 31. 
    Write down the correct term that is defined below: ´"When the same product is sold to different consumers at different prices despite identical production costs"
  • 32. 
    A public good is non-excludable and [...]
  • 33. 
    A good with positive externalities, which is often provided by the government, is a ...
    • A. 

      Public good

    • B. 

      Merit good

    • C. 

      Demerit good

    • D. 

      Private good