The Ultimate Quiz On Microeconomics Theory- Part II
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Most commonly used with regards to business, the term “microeconomics” refers to how humans behave and interact with one another. This study is often harnessed and effectively used to analyze how firms and individuals make tough decisions concerning the allocation of scarce resources. Think you know enough about the study of microeconomics? Let’s take a look and see in this quiz!
- 1.A recurring theme in economics is:
- A.
Unlimited resources and unlimited economic wants
- B.
People can increase resources by limiting their economic wants
- C.
People have limited economic wants and limited resources
- D.
People have unlimited economic wants, but limited resources
- 2.Opportunity cost is best defined as:
- A.
Marginal cost minus marginal benefit
- B.
The time spent on an economic activity
- C.
The value of the best foregone alternative
- D.
The money cost of an economic decision
- 3.Which is an illustration of a microeconomic question?
- A.
What is the current national rate of unemployment?
- B.
Is the economy experiencing a decline in the rate of inflation
- C.
Will a new type of television set increase the number of buyers
- D.
Is the production of goods and services in the economy greater this year than last year?
- 4.Macroeconomics focuses on:
- A.
The working of the whole economy or large sectors of it
- B.
The pricing decisions of a large company in an economy
- C.
Studies of how competition in an industry affects economic efficiency
- D.
Studies of how a business determines how to make the best use of the factors of production
- 5.Which is not considered to be an economic resource:
- A.
Land
- B.
Money
- C.
Labor
- D.
Tools and machinery
- 6.The production possibilities curve represents:
- A.
The maximum amount of labor and capital available for production
- B.
Combinations of goods and services among which consumers are indifferent
- C.
Maximum combinations of products available with fixed resources and technology
- D.
The maximum rate of growth of capital and labor in an economy
- 7.A point inside the production possibilities curve is:
- A.
Attainable and the economy is efficient
- B.
Attainable but the economy is inefficient
- C.
Unattainable but the economy is inefficient
- D.
Unattainable and the economy is efficient
- 8.A point outside the production possibilities curve is:
- A.
Attainable but there is not full employment
- B.
Attainable but there is not optimal allocation
- C.
Unattainable because the economy is inefficient
- D.
Unattainable because of limited resources
- 9.The production possibility curve:
- A.
Is convex to the origin
- B.
Is based on the law of diminishing returns
- C.
Is the boundary between attainable and unattainable outputs
- D.
Reflects the mixed economy found with most economic systems
- 10.The law of increasing opportunity costs says that:
- A.
Cost of production increase and then decrease
- B.
Increase in wages cause increases in the costs of production
- C.
Along a production possibilities curve, increases in the production of one type of good require larger and larger sacrifices of the other type of good
- D.
Along a production possibilities curve, deceases in the production of one type of good require larger and larger sacrifices of the other type of good
- 11.Capitalism is an economic system that:
- A.
Produces more capital goods than consumer goods
- B.
Produces more consumer goods than capital goods
- C.
Gives the government the right to tax individuals and corporations
- D.
Gives private individuals and corporations the right to own productive resources
- 12.Which would not be a characteristic of a capitalist economy?
- A.
Government ownership of the factors of production
- B.
Competition and unrestricted markets
- C.
Reliance on the market system
- D.
Free enterprise and choice
- 13.Which is a key feature of the market system?
- A.
Price floors and price ceilings in all markets
- B.
Reallocation of all resources from private to public uses
- C.
The right to own private property and control resource use
- D.
Central planning by government to provide goods and services
- 14.Which is necessary to make a trade in a barter economy?
- A.
Money
- B.
Unlimited wants
- C.
A medium of exchange
- D.
A coincidence of wants
- 15.The idea that the desires of resource suppliers and producers to further their own self-interest will automatically further the public interest is known as:
- A.
Consumer sovereignty
- B.
The invisible hand
- C.
Derived demand
- D.
Profit maximization
- 16.The influential book written by Adam Smith was?
- A.
The Worldly Philosophers
- B.
The Affluent Society
- C.
The Age of Economist
- D.
The Wealth of Nations
- 17.A market demand schedule for a product indicates that:
- A.
As the product's price falls, consumers buy less of the good
- B.
As a product's price rises, consumers buy less of other goods
- C.
There is a direct relationship between price and quantity demanded
- D.
There is an inverse relationship between price and quantity demanded
- 18.A lower price increases the quantity demanded because:
- A.
The purchasing power of individuals decreases
- B.
The financial assets of individuals decrease
- C.
Individuals buy more of the product and less of a substitute
- D.
Individuals buy less of the product and more of a substitute
- 19.Which will not, ceteris paribus, cause the demand curve for good A to shift?
- A.
A change in the price of A
- B.
A change in the price of B, a complement
- C.
A change in the price of C, a substitute
- D.
An increase in average income
- 20.A normal good is one:
- A.
Which people like
- B.
Which all normal people like
- C.
For which demand increases when price decreases
- D.
For which demand increases when income increases
- 21.When economists say that the demand for a product has decreased, they mean that:
- A.
The demand curve has shifted to the left
- B.
The product has become particularly scarce for some reason
- C.
The product price has increased and as a consequence consumers are buying less of the product
- D.
Consumers are now willing and able to purchase more of this product at each possible price
- 22.The law of supply is illustrated by a supply curve that is:
- A.
Vertical
- B.
Horizontal
- C.
Upward sloping
- D.
Downward sloping
- 23.Which will not cause the supply curve to shift:
- A.
A change in resource costs
- B.
A technological change
- C.
A change in the price of the good
- D.
A change in the prices of other goods
- 24.There is a shortage in a market for a product when:
- A.
The increase in supply is greater than the increase in demand
- B.
The increase in demand is greater than the increase in supply
- C.
Quantity demanded is less than quantity supplied
- D.
Quantity demanded is greater than quantity supplied
- 25.If the market price is above the equilibrium price:
- A.
A shortage will occur and producers will produce more and lower prices
- B.
A surplus will occur and producers will produce less and lower prices
- C.
A surplus will result and consumers will bid prices up
- D.
Producers will make extremely high profits
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