Microeconomics 10 mcq question with answer

 Which of the following is an example of a perfectly competitive market?

a. Monopoly

b. Oligopoly

c. Monopolistic competition

d. Agricultural commodities

The law of demand states that:

a. As price increases, quantity demanded increases

b. As price decreases, quantity demanded decreases

c. As price increases, quantity supplied increases

d. As price decreases, quantity supplied decreases

Which of the following is not a factor that can shift the demand curve?

a. Changes in consumer tastes and preferences

b. Changes in the prices of related goods

c. Changes in the cost of production

d. Changes in income

Which of the following is not a determinant of elasticity of demand?

a. Availability of substitutes

b. Necessity of the good

c. Proportion of income spent on the good

d. Time period

The price elasticity of demand measures:

a. The responsiveness of quantity demanded to changes in price

b. The responsiveness of quantity supplied to changes in price

c. The percentage change in price for a given percentage change in quantity demanded

d. The percentage change in quantity demanded for a given percentage change in price

When the market price is above the equilibrium price, there is:

a. A shortage

b. A surplus

c. No change in quantity demanded or supplied

d. Perfectly elastic demand

The law of diminishing marginal returns states that:

a. As more units of a variable input are added to a fixed input, the marginal product of the variable input eventually decreases

b. As more units of a fixed input are added to a variable input, the marginal product of the fixed input eventually decreases

c. As more units of both fixed and variable inputs are added, the marginal product eventually decreases

d. As more units of both fixed and variable inputs are added, the marginal product eventually increases

A price floor is:

a. A legal minimum price below which a good cannot be sold

b. A legal maximum price above which a good cannot be sold

c. A price set by the government to encourage consumption of a particular good

d. A price set by the government to discourage consumption of a particular good

Which of the following is a characteristic of a monopolistically competitive market?

a. A large number of firms

b. Product differentiation

c. Barriers to entry

d. Price-taking behavior

Which of the following is an example of an externality?

a. A firm polluting a river

b. A consumer buying a new car

c. A company lowering the price of its product to increase sales

d. A worker earning a higher wage than the market equilibrium wage

Answers:

d

b

c

c

a

b

a

a

b

a