Introduction to Microeconomics

Microeconomics is concerned with

•     the distribution of goods among households.

                   

                   

• the size of aggregate money flows in the economy.

                   

• the quantities of each product produced

• the allocative function of change in relative prices.

What is the opportunity cost of a decision?

• The total cost of producing a good

• The cost of the next best alternative foregone

• The cost of government intervention

• The cost of labor and materials

The problem of scarcity is relevant to

• third world countries

• countries with low income

• countries before practicing mass production

• all countries and individual

A point inside the production possibility curve may indicate

• all productive resources are efficiently utilized

• inefficient allocation of productive resources

• full employment of scarce resources

• technological efficiency

A combination inside the production possibilities curve is

• attainable and involves an efficient use of society's resources

• Attainable but would not be in the best interest since not all resources are utilized

• Unattainable because it is not listed as a combination

• Unattainable because society does not have sufficient resources to produce this combination

Which of the following will result in an outward movement of the production possibilities curve?

• Economic recession

• Technological advancement

• A decline in population

• Political instability

The Malaysian economy would best be classified as

• free market economy

• planned economy

• mixed market economy

• an Islamic economy

In a mixed economic system, the basic economic problems are solved by

• price mechanism only

• government directive

• price mechanism and government directive

• the forces of aggregate demand and supply

Microeconomics is not concerned with

• the distribution of goods among households

• the size of aggregate money flows in the economy

• the quantities of each product produced

• the allocative function of change in relative prices

The best foregone alternative is also known as

• sunk cost

• marginal cost

• real cost

• opportunity cost