Question 1

In microeconomics, what happens to price if demand decreases?

Accepted Answer

Price decreases

Answer

Price fluctuates

Answer

Price increases

Answer

Price remains constant

Question 2

According to the law of demand in microeconomics, what is the relationship between price and quantity demanded?

Accepted Answer

Inverse

Answer

Neutral

Answer

Direct

Answer

Proportional

Question 3

What effect does an increase in consumer income have on the demand for normal goods in microeconomics?

Accepted Answer

The demand for normal goods increases

Answer

The demand for normal goods becomes elastic

Answer

The demand for normal goods decreases

Answer

The demand for normal goods remains constant

Question 4

What happens to the demand curve for a substitute good if the price of its substitute increases?

Accepted Answer

The demand curve shifts to the right

Answer

The demand curve shifts to the left

Answer

There is a movement down along the demand curve

Answer

There is a movement up along the demand curve

Question 5

What is the impact of a decrease in the price of complementary goods on the demand curve for the main good in microeconomics?

Accepted Answer

The demand curve for the main good shifts to the right

Answer

The demand curve for the main good shifts to the left

Answer

There is a movement down along the demand curve for the main good

Answer

The price of the main good increases

Question 6

What is the concept of consumer surplus in microeconomics?

Accepted Answer

The difference between what consumers are willing to pay for a good or service and what they actually pay

Answer

The tax consumers have to pay on goods and services

Answer

The profit made by consumers from selling goods in the market

Answer

The additional cost consumers incur when purchasing a good or service

Question 7

What is the income effect in microeconomics?

Accepted Answer

The change in quantity demanded of a good due to a change in consumer income

Answer

The change in price of a good due to a change in income

Answer

The change in consumer preferences leading to income generation

Answer

The impact of inflation on consumer purchasing power

Question 8

In microeconomics, what happens to the quantity demanded of a good when its price increases, assuming all other factors remain constant?

Accepted Answer

Quantity demanded decreases

Answer

Quantity demanded remains constant

Answer

Quantity demanded fluctuates

Answer

Quantity demanded increases

Question 9

At what point does a business break even?

Accepted Answer

When total revenue equals total costs

Answer

When total costs exceed total revenue

Answer

When total revenue exceeds total costs

Answer

When variable costs equal fixed costs

Question 10

What is the formula for calculating profit?

Accepted Answer

Profit = Total Revenue - Total Costs

Answer

Profit = Total Costs / Total Revenue

Answer

Profit = Total Costs - Total Revenue

Answer

Profit = Total Revenue + Total Costs

Question 11

What does 'marginal cost' refer to in economics?

Accepted Answer

The cost of producing one additional unit of output

Answer

The difference between total revenue and total cost

Answer

The total cost of production divided by the number of units produced

Answer

The total revenue generated from the sale of all units

Question 12

What is the difference between fixed costs and variable costs?

Accepted Answer

Fixed costs remain constant regardless of production levels, while variable costs change with production levels.

Answer

Fixed costs change with production levels, while variable costs remain constant.

Answer

Variable costs are associated with rent, while fixed costs include utilities.

Answer

Fixed costs are for raw materials, while variable costs are for labor.

Question 13

How do you calculate the total revenue?

Accepted Answer

Total Revenue = Price per Unit \u00d7 Quantity Sold

Answer

Total Revenue = Total Costs / Quantity Sold

Answer

Total Revenue = (Price per Unit + Total Costs)

Answer

Total Revenue = Quantity Sold - Total Costs

Question 14

What does the term 'economies of scale' refer to?

Accepted Answer

The cost advantages that enterprises obtain due to size, output, or scale of operation, with cost per unit of output generally decreasing with increasing scale.

Answer

The cost disadvantages that enterprises face when they increase their scale of operation.

Answer

The cost advantages that enterprises obtain by reducing the quantity of output.

Answer

The cost advantages that enterprises obtain due to specialization in a particular product or service.

Question 15

How do economies of scale impact a company's profitability?

Accepted Answer

Economies of scale can lead to lower average costs, which in turn can increase a company's profitability.

Answer

Economies of scale only benefit customers, not the company's profitability.

Answer

Economies of scale always result in higher average costs, reducing profitability.

Answer

Economies of scale have no impact on a company's profitability.

Question 16

How does economies of scale affect the pricing strategy of a company?

Accepted Answer

Economies of scale can allow a company to lower prices, making its products or services more competitive in the market.

Answer

Economies of scale always lead to increased prices, reducing competitiveness in the market.

Answer

Economies of scale have no impact on the pricing strategy of a company.

Answer

Economies of scale only make products or services more expensive for customers.

Question 17

How can a company benefit from economies of scale in terms of purchasing and procurement?

Accepted Answer

Economies of scale can allow a company to negotiate better terms with suppliers, obtain bulk discounts, and reduce purchasing costs.

Answer

Economies of scale always lead to higher procurement costs due to increased demand.

Answer

Economies of scale only benefit suppliers, not the company's purchasing expenses.

Answer

Economies of scale have no impact on purchasing and procurement for a company.

Question 18

Which of the following best describes the concept of elasticity of supply?

Accepted Answer

The responsiveness of quantity supplied to a change in price

Answer

The total quantity supplied in a market

Answer

The measure of income elasticity of demand

Answer

The relationship between price and quantity demanded

Question 19

In the context of elasticity of supply, what does a supply curve with a steep slope indicate?

Accepted Answer

Inelastic supply

Answer

Elastic supply

Answer

Unitary elastic supply

Answer

Perfectly elastic supply

Question 20

What is the formula for calculating price elasticity of supply?

Accepted Answer

Percentage change in quantity supplied / Percentage change in price

Answer

Income elasticity of supply multiplied by price

Answer

Percentage change in price / Percentage change in quantity supplied

Answer

Total quantity supplied multiplied by price

Question 21

Which of the following best describes profit maximisation in economics?

Accepted Answer

Producing at a quantity where marginal revenue equals marginal cost

Answer

Producing at a quantity where total cost equals total revenue

Answer

Producing at a quantity where average revenue is maximized

Answer

Producing at a quantity where average cost is minimized

Question 22

What is the primary goal of profit maximisation for a firm?

Accepted Answer

To maximize the difference between total revenue and total cost

Answer

To minimize the fixed costs of production

Answer

To reduce competition in the market

Answer

To achieve sustainability through corporate social responsibility

Question 23

What is the definition of marginal cost?

Accepted Answer

The additional cost incurred from producing one more unit of a good

Answer

The revenue generated from selling one more unit of a good

Answer

The difference between fixed and variable costs

Answer

The total cost divided by the number of units produced

Question 24

How is marginal cost calculated?

Accepted Answer

By dividing the change in total cost by the change in quantity produced

Answer

By adding fixed and variable costs together

Answer

By subtracting total cost from average cost

Answer

By multiplying fixed cost by variable cost

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