Microeconomics Quiz
Microeconomics Quiz (MCQ)
1) Which of the following is not considered as labour?
(a) A production worker of a factory
(b) A teacher of a school
(c) A doctor of a government hospital
(d) A founder of a company
2)Consider a person given 4 options 1,2,3 and 4 with values $10, $5, $3 and $2 respectively. What is the opportunity cost if he chooses option 1?
(a) $20
(b) $15
(c) $1
(d) $5
3)What will cause the demand curve to shift left?
(a) An increase in consumer’s income
(b) A drop in the price of complements
(c) Consumer’s taste to the product is stronger
(d) A decrease in the price of substitutes
4)Which will cause the supply curve to shift right?
(a) An improvement in technology
(b) Workers demand for a higher wage
(c) Price of raw materials increases
(d)Producers expect price to increase in the near future
5)What will happen when the market price is higher than the market equilibrium price?
(a) The demand curve will shifts left
(b) The supply curve will shifts right
(c) The price will eventually decrease due to surplus
(d) The price will eventually increase due to shortage
6)When the price of a product increases from $1 to $2, its quantity demanded decreases from 10 units to 5 units. Using midpoint or arc formula, we can conclude that
(a) the product is demand elastic
(b) the product is demand unit elastic
(c) the product is demand inelastic
(d) the product is demand perfectly inelastic
7)Given that the income elasticity of demand of a product is 2.3, we can conclude that
(a) the product is price elastic
(b) the product is normal and a necessity
(c) the product is inferior
(d) the product is normal and a luxury
8)Given that the cross price elasticity of demand between two products is -1.8, we can conclude that
(a) the two product are substitutes
(b) the two products are complements
(c) one of the product is a necessity and the other product is a luxury
(d) one of the product is normal and the other product is inferior
9) Given that the accounting profit of a firm is $28,000, we can conclude that
(a) the economic profit must be more than $28,000
(b) the economic profit must be $28,000
(c) the economic profit must be less than $28,000
(d) the economic profit can be more than, equal to or less than $28,000
10)Given that the total product of 4 workers is 6 units and that of 6 workers is 18 units, the marginal product is
(a) 6 units
(b) 12 units
(c) 18 units
(d) 24 units
11)The total variable cost (TVC) of 4 units of output is $20 and that of 8 units of output is $65, the marginal cost is
(a) $11.25
(b) $45
(c) $65
(d) Unable to determine since total cost (TC) is not given
12)If a production process exhibits diseconomies of scale throughout, then the long run average cost curve is
(a) horizontal
(b) upward sloping
(c) downward sloping
(d) U-shaped
13) Fill in the blanks
| Q | TFC | TVC | TC | MC | ATC | AVC | AFC |
| 0 | 20 | 0 | |||||
| 1 | 6 | ||||||
| 2 | 10 | ||||||
| 3 | 12 | ||||||
| 4 | 18 | ||||||
| 5 | 28 |
14)What will happen if the market equilibrium price is $5 and a perfectly competitive firm charges $6 for its product?
(a) The firm will still earn some revenue
(b) The firm’s revenue will be zero
(c) The firm will maximize its profit
(d) The firm should produce less since it charges a higher price than the market.
15)Given that in a perfectly competitive market, the market price is $6 and the firm’s marginal cost at the current output is $8, the firm should
(a) produce more output
(b) maintain its current output since it is profit maximizing
(c) produce less output
(d) increase the price to $8
16)In the short run if all perfectly competitive firm are making profit, then in the long run
(a) some firms will leave the industry
(b) the firms will continue to make profit
(c) new firms will enter the industry
(d) the market price will increase
17)In the long run, if a perfectly competitive firm is incurring a loss,
(a) it should continue to operate at a loss, hoping that situation will improve
(b) it should exit the industry
(c) it should reduce its output to cut its loss
(d) it should charge a higher price to cut its loss
18)The difference between perfect competition and monopolist is that for perfect competition, price ______ marginal revenue and for monopolist, price ______ marginal revenue.
(a) is higher than , is lower than
(b) is lower than , is higher than
(c) is higher than, is equal to
(d) is equal to, is higher than
19)If at the output level where MR = MC, the monopolist is producing 20 units of output, charging a price of $6 and incur an average total cost of $4, the monopolist is making ________ of _________.
(a) profit, $80
(b) loss, $80
(c) profit, $20
(d) loss, $20
microeconomics quiz