Microeconomics Quiz

Microeconomics deals with:

• The economy as a whole

• The behavior of individual economic units

• Government policies related to inflation

• The aggregate level of national income

Which of the following is a microeconomic concept?

• Inflation rate

• Unemployment rate

• Demand and supply of a specific product

• Gross Domestic Product (GDP)

The concept of 'marginal utility' refers to:

• Total satisfaction from consumption

• Additional satisfaction from consuming an additional unit

• The total quantity demanded at various prices

• The budget constraint of a consumer

The demand curve is usually:

• Upward sloping from left to right

• Downward sloping from left to right

• Vertical

• Horizontal

A consumer is in equilibrium when:

• Total utility is maximized

• Marginal utility per dollar spent on each good is equal

• Total expenditure is minimized

• Marginal utility is zero

If the price of a substitute good rises, the demand for the original good:

• Increases

• Decreases

• Remains constant

• Becomes perfectly elastic

A price ceiling set below the equilibrium price will result in:

• Surplus

• Shortage

• No effect

• Equilibrium

In the short run, a firm will shut down if:

• It is making zero profit

• Total revenue is greater than total cost

• Total revenue is less than variable costs

• Fixed costs are high

Which curve is U-shaped due to the law of diminishing returns?

• Marginal cost curve

• Average revenue curve

• Demand curve

• Total cost curve

Cross elasticity of demand is positive for:

• Complementary goods

• Substitute goods

• Unrelated goods

• Inferior goods