About this Study Set
This study set covers Microeconomics through
18 practice questions.
Foundational concepts of microeconomics including supply, demand, market structures, and resource allocation. Every question includes the correct answer so you can learn as you go — pick any format above to get started.
Questions & Answers
Browse all 18 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 economic term for the limited availability of a resource in comparison to the unlimited wants of society?
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A
Inflation
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B
Scarcity
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C
Deflation
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D
Surplus
2
In a competitive market, what happens to the price of a good when demand increases while supply remains constant?
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A
Price decreases
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B
Price stays the same
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C
Price increases
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D
Price becomes negative
3
Which factor refers to the cost of the next best alternative that is given up when a choice is made?
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A
Sunk cost
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B
Opportunity cost
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C
Fixed cost
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D
Variable cost
4
What is the primary objective of a for-profit firm in a market economy?
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A
Maximizing revenue
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B
Maximizing profit
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C
Minimizing employees
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D
Maximizing social welfare
5
If a product is considered a 'normal good', how does an increase in consumer income typically affect the demand for that product?
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A
Demand increases
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B
Demand decreases
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C
Demand remains unchanged
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D
Demand becomes zero
6
What does the 'Law of Supply' state about the relationship between price and quantity supplied?
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A
As price rises, quantity supplied falls
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B
As price rises, quantity supplied rises
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C
As price falls, quantity supplied rises
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D
There is no relationship
7
What is the equilibrium price in a market?
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A
Where supply exceeds demand
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B
Where demand exceeds supply
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C
Where quantity demanded equals quantity supplied
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D
Where the government sets the price
8
Which market structure is characterized by a single seller providing a unique product with no close substitutes?
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A
Perfect competition
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B
Monopoly
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C
Oligopoly
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D
Monopolistic competition
9
What are the 'factors of production' typically categorized as in economics?
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A
Stocks, bonds, and cash
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B
Land, labour, capital, and enterprise
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C
Goods, services, and taxes
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D
Imports, exports, and tariffs
10
What term describes the additional satisfaction or benefit a consumer gains from consuming one more unit of a good?
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A
Total utility
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B
Marginal utility
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C
Average utility
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D
Diminishing return
11
When the government sets a price floor above the equilibrium price, what is the most likely result?
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A
A shortage
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B
A surplus
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C
Increased competition
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D
Lower production costs
12
What is the term for a market structure where a few large firms dominate the industry?
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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 the price of a substitute good increases, what happens to the demand for the original good?
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A
Demand decreases
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B
Demand increases
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C
Demand stays the same
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D
The good becomes an inferior good
14
What is meant by 'division of labour'?
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A
Assigning different tasks to different workers to increase efficiency
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B
Hiring only part-time workers
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C
Dividing the profits among shareholders
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D
Reducing the number of working hours
15
Which of the following is an example of a fixed cost for a business?
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A
Raw material costs
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B
Electricity usage
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C
Monthly building rent
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D
Shipping expenses
16
What is the economic definition of a 'service'?
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A
A physical object that can be touched
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B
An intangible act performed for others
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C
A natural resource
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D
A form of government tax
17
What happens to the quantity demanded of a product when its price increases, assuming all other factors remain constant?
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A
Quantity demanded increases
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B
Quantity demanded decreases
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C
Quantity demanded stays the same
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D
Demand shifts to the right
18
In economics, what is the 'market' defined as?
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A
A physical place with stalls
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B
Any arrangement where buyers and sellers exchange goods or services
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C
A government office for trade
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D
A collection of retail shops in a mall
