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Question 1:

Which concept suggests that the first few units of consumption will provide more utility than subsequent units?

Principle of Increasing Marginal Utility Concept of Total Utility Law of Diminishing Marginal Utility Theory of Equi-marginal Utility

Question 2:

The scarcity definitions in Modern economics highlight what kind of problem in economics?

The problem of plenty The problem of production The problem of choice The problem of prediction

Question 3:

What is price elasticity of demand?

The ratio of change in quantity supplied to change in price. The change in price in response to a change in demand. The change in income in response to a change in demand. The responsiveness of demand to a change in price.

Question 4:

Which of the following is a defect of monopolistic competition?

Perfectly efficient production. Homogenous products being available. Firms always operating at minimum average total cost. Excess capacity leading to inefficiency.

Question 5:

What does break-even analysis help with?

Predicting exact future profits. Profit planning and decision making. Eliminating all business risks. Calculating employee performance metrics.

Question 6:

Why is elasticity of demand important for businesses when setting prices?

It calculates the wage rates for employees. It helps them understand how price changes affect sales volume. It helps in calculating the interest rate on loans. It determines the total cost of production.

Question 7:

What does convexity of an indifference curve to the origin imply?

Increasing marginal rate of substitution. Constant marginal rate of substitution. Diminishing marginal rate of substitution. Zero marginal rate of substitution.

Question 8:

From the Modern economic perspective, which factor is critical for ensuring long-term economic growth and stability?

Centralized economic planning Short-term profit maximization Sustainable resource management Unregulated market conditions

Question 9:

What type of monopoly occurs when economies of scale are so pronounced that one firm can supply the market's entire demand at a lower average cost than two or more firms?

Natural monopoly. Government monopoly. Geographical monopoly. Technological monopoly.

Question 10:

What is meant by 'marginal utility'?

The utility lost from consuming a good. The average utility of a good consumed. The total utility gained from all units of a good. The additional utility gained from consuming one more unit of a good.

Quiz: Micro Economics