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Economics & Development
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Microeconomics Skill Assessment
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Quiz # 13
Microeconomics Quiz # 13
Instructions
Quiz:
Microeconomics Quiz # 13
Subject:
Consumer Choice Theory
Total Questions:
30 MCQs
Time:
30 Minutes
Note
Do not refresh the page while taking the test.
Results along with correct answers will be shown at the end of the test.
Start Quiz
Microeconomics Quiz # 13
End Quiz
Question
1
of 30
00:00
Standard economics views consumers as ______.
Highly limited
Somewhat unrealistic
Completely self-controlled
Occasionally irrational
When we own something, we value it more than other people do. This is known as ______.
Framing
The endowment effect
Anchoring
The ultimatum game
What are implicit costs?
Variable costs that impact long-run average total costs
Production costs related to equipment but not materials
Administration costs that do not impact production
Production costs that do not require an outlay of money
Which of the following is TRUE?
An accounting profit is less than an economic profit.
An economic profit is less than an accounting profit.
Economic profits do not consider implicit costs.
Accounting profits do not consider explicit costs.
What do economists call expenses that have been incurred and cannot be recovered?
Sunk costs
Marginal costs
Implicit costs
Indirect costs
In terms of production, what do economists mean by the short run?
The time from the opening of a business to its first profits
A period too brief for some production inputs to be varied
The period during which initial staff is hired and trained
The length original equipment is expected to last
One way an increase in workers can increase marginal product is that it ______.
Increases revenue from sales
Allows workers to specialize
Raises per-unit fixed costs
Lowers the output per worker
What do economists mean by production function?
The per-unit cost of inputs compared to the sale price of outputs
The correlation between marginal product and marginal costs
The balance between economic profits and accounting profits
The relationship between quantity of inputs and quantity of outputs
What are the two categories of short-run costs in a business?
Fixed costs and explicit costs
Fixed costs and variable costs
Variable costs and explicit costs
Sunk costs and implicit costs
What is average total cost?
A profitability measurement
An assessment of productivity
An estimate of economic profits
A per-unit cost of production
What is shown in the equation ΔTC/Δq?
Total product
Marginal cost
Marginal product
Average cost
When marginal product rises, ______ falls.
Total product
Quantity of labor
Marginal cost
Variable input
Why is average total cost usually relatively high at very low levels of output?
High average fixed costs
High average variable costs
Diminishing marginal product
Increasing marginal product
When ATC falls it is primarily because ______ is declining.
AVC
AFC
Output
TC
Business’s long-run average total cost curves are typically better than their short-run total cost curves because ______.
Their fixed costs decline over time
They can adjust more of their inputs in the long run
In the long run, their employees become more experienced
Constant returns to scale drive down variable costs
When LRATC falls as output expands, ______.
The cost of one more unit of output rises
Minimum efficient scale has been reached
Economies of scale are present
Marginal product is diminishing
What do economists call the cost disadvantages that occur in an output range where LRATC rises as output expands?
Diseconomies of scale
Minimum efficient scales
Constant returns to scale
Economies of scale
In a perfectly competitive market, there are ______ buyers and ______ sellers.
Few; many
Many; few
Few; few
Many; many
Which of the following is an accurate statement about a perfectly competitive market?
It has few barriers for entry, but many for exit.
It has many barriers for entry, but few for exit.
It has few barriers to either entry or exit.
It has many barriers to both entry and exit.
In a perfectly competitive market, a supplier will have the most difficulty selling his product when his price is ______ the market price.
Slightly lower than
Much lower than
Equal to
Higher than
A firm maximizes profits by maximizing the difference between ______.
Total revenue and total costs
Total supply and total price
Marginal revenue and marginal costs
Marginal supply and marginal price
What is the term used for the additional income derived from the production of one unit of the good?
Total revenue
Marginal revenue
Average revenue
Allocative revenue
Which of the following is an accurate statement about a firm with zero economic profits?
It will exit the market.
It can cover both its implicit and explicit costs
It will shut down for at least several months.
It can dictate the market price.
Which of the following shows the equilibrium output that a firm will provide at various prices in the short run?
A short-run marginal cost
A short-run average total cost curve
A short-run supply curve
A short-run demand curve
A firm will always shut down when it cannot cover its average ______ costs.
Labor
Marginal
Fixed
Variable
A graph shows the portion of the marginal costs above the average variable costs for all the firms in the corn market for a period of six months. This graph is a ______.
Short-run market supply curve
Short-run supply curve
Long-run market supply curve
Long-run supply curve
Which of the following will most likely happen if P < ATC?
A firm will shut down in the short run.
A firm will operate in the short run but take a loss.
A firm will exit in the long run.
A firm will operate in the long run and take a profit.
In an expanding market, the market supply curve will ______.
Shift to the right
Shift to the left
Move upward
Move downward
A firm will get a normal return on the use of its resources at ______ economic profits in the ______ run.
High; short
High; long
Zero; short
Zero; long
In a(n) ______ industry, cost curves do not change as output changes.
Increasing-cost
Decreasing-cost
Constant-cost
Variable-cost
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