Set 17

Microeconomics is concerned with:
1. The establishing of an overall view of the operation of the economic system.
2. A detailed examination of specific economic units which comprise the
  economic system.
3. The aggregate or total levels of income, employment and output.
4. None of the given option
What is the difference between the positive and the normative in economics?
1. A positive question is one for which the answer is yes while norm ative question is one for which the answer is no
2. Positive questions concern matters of opinion, while normative questions
  concern matters of fact.
3. Positive questions concern matters of fact, while normative questions
  concern matters of opinion.
4. Economic theory can answer normative questions, but not positive ones.
Which of the following is characteristic of a product whose demand is elastic?
1. The price elasticity coefficient is less than 1.
2. Total revenue decreases if price decreases
3. Buyers are relatively insensitive to price changes
4. The percentage change in quantity is greater than the percentage change
  in price.
A Giffen good:
1. Is a good that people buy more of it as their incomes fall.
2. Is a good which people buy more of as its price increases.
3. Has a vertical demand curve.
4. Is anouther name for a free good.
An indifference curve is a curve which shows the different combinations of two
products that:
1. Give a consumer equal marginal utilities.
2. Give the customer equal total utilities.
3. Cost a consumer equal amounts.
4. Have the same prices.
A study shows that the coefficient of the cross price elasticity of Coke and
Sprite is negative. This information indicates that Coke and Sprite are:
1. Normal goods.
2. Complementary goods.
3. Substitute goods.
4. Independent goods.
Elasticity of supply is defined as the ratio of:
1. Price over quantity supplied.
2. Change in price over change in quantity supplied.
3. Percentage change in quantity supplied over percentage change in price.
4. Percentage change in price over percentage change in quantity supplied.
The change in total revenue divided by a one-unit change in output sold is
known as:
1. Average revenue.
2. Average profit
3. Marginal cost.
4. Marginal revenue.
Marginal cost:
1. Is the cost of hiring the last unit of labour
2. Is anouther word for average cost
3. Is rising when marginal product is rising
4. Should be avoided
In perfect competition, product price is:
1. Greater than marginal revenue.
2. Equal to marginal revenue.
3. Equal to total revenue,Greater than total revenue.
A price taker is:
1. A firm that accepts different prices from different customers.
2. A consumer who accepts different prices from different firms.
3. A firm that cannot influence the market price.
4. Both (b.) and (c.).
Which of following is a key assumption of a perfectly competitive market?
1. Firms can influence market price.
2. Commodities have few sellers.
3. It is difficult for new sellers to enter the market.
4. Each seller has a very small share of the market.
A firm maximises profit by operating at the level of output where:
1. Average revenue equals average cost.
2. Average revenue equals average variable cost.
3. Total costs are minimised.
4. Marginal revenue equals marginal cost.
The demand curve facing a perfectly competitive firm is:
1. Downward-sloping and less flat than the market demand curve.
2. Downward-sloping and more flat than the market demand curve.
3. Perfectly horizontal.
4. Perfectly vertical.
Compared to the equilibrium price and quantity sold in a competitive market, a
monopolist will charge a ______________ price and sell a ______________
quantity:
1. Higher; larger
2. Lower; larger
3. Higher; smaller
4. Lower; smaller
The monopolist has no supply curve because:
1. The quant ity supplied at any particular price depends on the monopolist's demand curve
2. The monopolist's marginal cost curve changes considerably over time.
3. The relationship between price and quantity depends on both marginal cost and average cost.
4. There is a single seller in the market.
A doctor sizes up patients' income and charges wealthy patients more than
poorer ones. This pricing scheme represents a form of:
1. First- degree price discrimination
2. Second-degree price discrimination.
3. Third-degree price discrimination.
4. Pricing at each consumer’s reservation price.
For which of the following market structures is it assumed that there are
barriers to entry?
1. Perfect competition
2. Monopolistic competition
3. Monopoly
4. All of the above
A market with few entry barriers and with many firms that sell differentiated
products is:
1. Purely competitive.
2. A monopoly.
3. Monopolistically competitive.
4. Oligopolistic.
Which of the following does not refer to macroeconomics?
1. The study of aggregate level of economic activity.
2. The study of causes of unemployment.
3. The study of causes of inflation.
4. The study of the economic behaviour of individual decision-making units
  such as consumers, resource owners and business firms.

Set 17

Quiz