How is average product calculated?

Total product divided by the quantity of the factor employed.

Total product divided by the price of the factor employed.

Quantity of the factor employed divided by the total product.

Price of the factor employed divided by the total product.

What does average total cost represent?

Total variable cost per unit of output.

Average profit per unit of output.

What is average variable cost?

Total variable cost per unit of output.

Average fixed cost per unit of output.

What is a barrier to entry according to the image?

A natural or legal constraint that protects a firm from potential competitors.

A government policy that encourages competition.

A financial subsidy provided to new firms.

A strategy used by firms to increase market share.

What does the term 'behavioural economics' refer to in the image?

A study of the ways in which limits on the human brain's ability to compute and implement rational decisions influences economic behaviour.

The study of stock market behavior.

The analysis of consumer purchasing patterns.

The economic impact of human behavior on the environment.

According to the image, what does 'big tradeoff' refer to?

The tradeoff between efficiency and fairness.

The exchange of goods between two large economies.

The balance between import and export in international trade.

The decision-making process in large corporations.

What is a bilateral monopoly as defined in the image?

A situation in which a monopoly seller faces a monopsony buyer.

A market with only one buyer and several sellers.

A market with only one seller and several buyers.

A market where two monopolies compete against each other.

What does 'budget line' represent according to the image?

The limit to a household's consumption choices.

The government's annual budget.

The financial goals of a household.

The boundary of a firm's financial resources.

What is 'capital' as used in the image?

The tools, equipment, buildings, and other constructions that businesses use to produce goods and services.

The financial assets held by a government.

The money used to start a new business.

What does 'capital accumulation' include according to the image?

The growth of capital resources, including human capital.

The accumulation of wealth in the form of money or other currency forms.

The total savings of a household.

The process of increasing a country's gold reserves.

What is 'capture theory' as described in the image?

A theory that regulation serves the self-interest of the producer, who captures the regulator and maximizes economic profit.

A theory in psychology about attention and memory.

A theory about capturing market share in business.

A legal theory regarding the capture of fugitives.

What is a 'cartel' according to the image?

A group of firms acting together to limit output, raise the price, and increase economic profit.

A coalition of political parties.

A group of companies that share technology and resources.

An association of manufacturers with the purpose of maintaining high standards in a particular industry.

What does 'ceteris paribus' mean as per the image?

A Latin phrase meaning 'all other things being equal.'

A Latin phrase meaning 'all other things being unequal.'

A Latin phrase meaning 'with all due respect.'

A Latin phrase meaning 'to each his own.'

What illustrates a change in buyers' plans when the price of a good changes but all other influences on buyers' plans remain unchanged?

C) A movement along the demand curve

B) A movement along the supply curve

C) A good that is nonrival and excludable

A) A good that is nonrival and nonexcludable

B) A good that is rival and excludable

D) A good that is rival and nonexcludable

According to the Coase theorem, what is true if property rights exist and the transactions costs of enforcing them are low?

B) It doesn't matter who has the property rights as long as transactions are efficient

A) Private transactions are inefficient regardless of who has the property rights

C) Property rights should not exist for transactions to be efficient

D) Transactions costs must be high for private transactions to be efficient

What is a collusive agreement?

B) An agreement between two or more producers to form a cartel to restrict output, raise the price, and increase profits

A) An agreement between consumers to lower the price of goods

C) An agreement between governments to regulate international trade

D) An agreement between retailers to set minimum retail prices

What is a command system?

B) A method of allocating resources by the order of someone in authority, such as in a firm's managerial hierarchy

A) A method of allocating resources by the market forces of supply and demand

C) A method of allocating resources by consumer choice

D) A method of allocating resources by random selection

What is a common resource?

D) A resource that is rival and nonexcludable

A) A resource that is nonrival and nonexcludable

B) A resource that is nonrival and excludable

C) A resource that is rival and excludable

What defines comparative advantage?

C) The ability to produce a good at a lower opportunity cost than anyone else

A) The ability to produce a good at a higher opportunity cost than anyone else

B) The ability to produce a good with the use of fewer resources than anyone else

D) The ability to produce more of a good than anyone else with the same amount of resources

What defines a competitive market?

A market that has many buyers and many sellers, so no single buyer or seller can influence the price.

A market with a single buyer and seller who set the price.

A market where only one firm provides all the goods and services.

A market where prices are set by the government.

What is a complement in economic terms?

A good that is used in conjunction with another good.

A substitute good that can replace another good.

A good that is inferior to another good.

A service that enhances the value of a good.

What happens when constant returns to scale are present in a firm's technology?

The LRAC curve is upward sloping.

The firm's technology becomes obsolete.

The firm experiences decreasing costs as output decreases.

What is consumer equilibrium?

A situation in which a consumer has allocated all his or her available income in the way that, given the prices of goods and services, maximizes his or her total utility.

A situation where the consumer spends all income on one good.

A situation where the consumer saves all of his or her available income.

A situation where the consumer is indifferent between all combinations of goods and services.

How is consumer surplus calculated?

The excess of the benefit received from a good over the amount paid for it, summed over the quantity bought.

The total cost of a good minus its price, summed over the quantity sold.

The marginal benefit of a good minus its price, divided by the quantity bought.

The total revenue from a good minus the total cost of production.

What characterizes a contestable market?

A market in which firms can enter and leave so easily that firms in the market face competition from potential entrants.

A market where firms cannot enter or leave easily.

A market dominated by a single firm.

A market where entry and exit are regulated by the government.

What is cooperative equilibrium?

The outcome of a game in which the players make and share the monopoly profit.

The outcome of a game in which the players compete and do not share profits.

The result of a game where players do not interact with each other.

The outcome of a game where one player takes all the profits.

A government-sanctioned exclusive right granted to an inventor of a good, service, or productive process to produce, use, and sell the invention for a given number of years.

A government-sanctioned right to publicly share an invention for a limited number of years.

A government requirement for companies to disclose their inventions.

A government prohibition on the use of a particular invention.

What does cross elasticity of demand measure?

The change in quantity demanded of a good when the price of a related good changes.

The change in quantity demanded of a good when its own price changes.

The percentage change in the quantity demanded of a good when the consumer's income changes.

The percentage change in the price of a good when the quantity demanded changes.

What is deadweight loss?

A measure of inefficiency. It is equal to the decrease in total surplus that results from an inefficient level of production.

The increase in total surplus that results from an efficient level of production.

The cost of producing goods that no one wants to buy.

The measure of efficiency in terms of the number of goods produced.

What does the term "Demand curve" refer to?

A curve that shows the relationship between the quantity demanded of a good and its price when all other influences on consumers' planned purchases remain the same.

The process of removing regulation of prices, quantities, entry, and other aspects of economic activity in a firm or industry.

The tendency for the marginal product of an additional unit of a factor of production to be less than the marginal product of the previous unit of the factor.

An equilibrium in which the best strategy for each player is to cheat regardless of the strategy of the other player.

What does "Diminishing marginal utility" imply?

The tendency for marginal utility to decrease as the quantity consumed of a good increases.

The tendency for the marginal product of an additional unit of a factor of production to be less than the marginal product of the previous unit of the factor.

The general tendency for a person to be willing to give up less of good y to get one more unit of good x, while at the same time remaining indifferent as the quantity of good x increases.

A relationship between two variables that move in the same direction.

What does the term "Duopoly" refer to?

An oligopoly market in which two producers of a good or service compete

A market with a single producer

A market with limited consumer choice

A market with perfect competition

What is "Economic depreciation"?

The fall in the market value of a firm's capital over a given period

The increase in market value of a firm's capital over a given period

The total revenue minus the total cost of a firm

The surplus generated by a firm

What is the definition of "Economic growth"?

The expansion of production possibilities

The reduction of production possibilities

The fall in total revenue of a firm

The increase in economic profit

What is an "Economic model"?

A description of some aspect of the economic world that includes only those features that are needed for the purpose at hand

A graphical representation of economic growth

A detailed description of the entire economic world

A theory that explains economic rent

What constitutes "Economic profit"?

A firm's total revenue minus its total cost, with total cost measured as the opportunity cost of production

A firm's total revenue plus its total cost

The surplus generated from consumer spending

The total cost of production minus economic rent

What does "Economics" study?

The choices that individuals, businesses, governments, and entire societies make as they cope with scarcity and the incentives that influence and reconcile those choices

The technology used in production

The description of economic models

What does it mean if resource use is "Efficient"?

It is not possible to make someone better off without making someone else worse off

It is possible to make someone better off without making someone else worse off

It leads to economic depreciation

What characterizes "Elastic demand"?

Demand with a price elasticity greater than 1, where price changes cause a proportionate change in the quantity demanded

Demand with a price elasticity less than 1, where price changes cause a proportionate change in the quantity demanded

Demand with a price elasticity equal to 1, where price changes do not affect the quantity demanded

Demand with a price elasticity of zero, where price changes cause a large change in the quantity demanded

What does the term "elasticity of supply" refer to?

The responsiveness of the quantity supplied of a good to a change in its price, other things remaining the same.

The quantity bought and sold at the equilibrium price.

The human resource that organizes the other three factors of production.

A cost or a benefit that arises from an action that falls on someone other than the person or firm choosing the action.

Which of the following best defines "externality"?

A cost or a benefit that arises from an action that falls on someone other than the person or firm choosing the action.

The price at which the quantity demanded equals the quantity supplied.

The productive resources used to produce goods and services.

An economic unit that hires factors of production and organizes those factors to produce and sell goods and services.

What are "factors of production"?

The productive resources used to produce goods and services.

The price at which the quantity demanded equals the quantity supplied.

The goods and services that we sell to people in other countries.

A firm that has excess capacity if it produces below its efficient scale.

Economics Definitions Quiz

12th Grade

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100 Qs

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Economics Definitions Quiz

Quiz

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Business

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12th Grade

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Practice Problem

•

Hard

Janet Davis

FREE Resource

100 questions

Show all answers

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does abatement technology refer to?

A technology that increases production efficiency.

A production technology that reduces or prevents pollution.

A method to enhance the use of natural resources.

A system to manage waste after production.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Who has an absolute advantage in production?

A person who can produce more with fewer resources.

A person who can produce more than another person.

A person who can produce at the lowest cost.

A person who has the most advanced technology.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is after-tax income?

Total income before tax payments by households to governments.

Total income including tax payments by households to governments.

Total income minus tax payments by households to governments.

Total income minus tax refunds from governments to households.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is allocative efficiency?

Producing goods at the highest possible cost for maximum benefit.

Producing goods without considering the cost or benefit.

Producing goods at the lowest possible cost without sacrificing quality.

Producing goods at the lowest possible cost and in quantities that provide the greatest possible benefit.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the purpose of anti-combine law?

To regulate monopolies and prevent them from splitting into smaller companies.

To encourage the formation of monopolies and oligopolies.

To regulate oligopolies and prevent them from becoming monopolies or behaving like monopolies.

To dissolve all forms of business combinations.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does the average cost pricing rule entail?

Setting the price below average total cost to maximize profit.

Setting the price above average total cost to cover unexpected expenses.

Setting the price equal to average total cost, including normal profit.

Ignoring the average cost when setting the price of a product.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is average fixed cost?

Variable cost per unit of output.

Total cost per unit of output.

Total fixed cost per unit of output.

Average variable cost per unit of output.

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