About this Study Set
This study set covers Microeconomics through
25 practice questions.
Essential concepts covering supply, demand, and basic market behavior. Every question includes the correct answer so you can learn as you go — pick any format above to get started.
Questions & Answers
Browse all 25 questions from the
Microeconomics Fundamentals study set below.
Each question shows the correct answer — select a study format above to practice interactively.
1
What is the primary factor that determines the price of a good in a perfectly competitive market?
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A
Government mandate
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B
Supply and demand
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C
Production cost only
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D
Marketing budget
2
What happens to the quantity demanded of a product when its price increases, assuming all other factors remain constant?
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A
It increases
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B
It decreases
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C
It remains the same
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D
It becomes zero
3
What is the term for the additional satisfaction a consumer gains from consuming one more unit of a good?
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A
Total utility
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B
Average utility
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C
Marginal utility
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D
Opportunity cost
4
In economics, what do we call the value of the next best alternative that is given up when making a choice?
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A
Sunk cost
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B
Fixed cost
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C
Opportunity cost
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D
Variable cost
5
Which market structure is characterized by a single seller providing a unique product with no close substitutes?
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A
Monopoly
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B
Oligopoly
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C
Perfect competition
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D
Monopolistic competition
6
What is the point where the quantity supplied equals the quantity demanded?
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A
Shortage
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B
Surplus
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C
Equilibrium
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D
Market failure
7
What does a 'normal good' mean in economic terms?
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A
A good whose demand increases when consumer income increases
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B
A good whose demand decreases when consumer income increases
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C
A good that is always available
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D
A good with no substitutes
8
Which of the following is considered a 'factor of production'?
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A
Taxes
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B
Profit
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C
Land
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D
Revenue
9
What is the term for costs that do not change regardless of the level of output produced?
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A
Variable costs
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B
Fixed costs
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C
Marginal costs
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D
Total costs
10
What happens to the supply curve if the cost of raw materials used to produce a good decreases?
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A
It shifts to the left
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B
It shifts to the right
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C
It stays the same
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D
It becomes vertical
11
Which economic concept explains why individuals and nations focus on producing goods where they have a lower opportunity cost?
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A
Comparative advantage
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B
Absolute advantage
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C
Monopoly power
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D
Price discrimination
12
What is the term for a market situation with only a few large sellers?
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A
Monopoly
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B
Perfect competition
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C
Oligopoly
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D
Monopsony
13
If two goods are substitutes, what happens to the demand for one if the price of the other rises?
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A
It increases
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B
It decreases
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C
It stays the same
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D
It becomes negative
14
What does the law of diminishing marginal returns state?
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A
Total output will always decrease
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B
Adding more of one input while others stay fixed eventually yields smaller increases in output
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C
Costs always increase with production
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D
Demand always falls over time
15
What is a 'price floor' in economics?
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A
A legal minimum price for a good or service
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B
A legal maximum price for a good or service
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C
The cost of production
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D
The average market price
16
Which of the following is an example of an 'inferior good'?
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A
Luxury cars
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B
Generic store-brand groceries
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C
Designer clothing
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D
Fine dining meals
17
What is the primary goal of a firm in a market economy?
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A
To maximize revenue
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B
To minimize taxes
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C
To maximize profit
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D
To employ as many people as possible
18
What is the term for the responsiveness of quantity demanded to a change in price?
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A
Market equilibrium
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B
Price elasticity of demand
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C
Supply shift
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D
Marginal utility
19
When a price is set above the equilibrium price, what does it create in the market?
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A
A shortage
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B
A surplus
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C
Equilibrium
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D
Perfect competition
20
What are 'complementary goods'?
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A
Goods used together, like printers and ink cartridges
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B
Goods that are identical
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C
Goods that have nothing in common
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D
Goods produced by the same company
21
What is the 'Law of Supply'?
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A
As price rises, quantity supplied rises
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B
As price rises, quantity supplied falls
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C
Price has no effect on supply
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D
Supply is determined only by taxes
22
Which of these describes a 'public good'?
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A
Non-excludable and non-rivalrous
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B
Excludable and rivalrous
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C
Only provided by the government
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D
Expensive to produce
23
What is meant by the 'scarcity' of resources?
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A
Resources are infinite
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B
Unlimited wants exceed limited resources
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C
Prices are too high
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D
There is no demand for resources
24
What is the 'marginal cost' of production?
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A
Total cost divided by quantity
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B
The cost of producing one additional unit
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C
The total cost of all units
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D
The fixed cost only
25
What does a demand curve typically look like on a graph?
-
A
Upward sloping
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B
Downward sloping
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C
Horizontal
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D
Vertical
