Fundamentals of Microeconomics

Microeconomics

A collection of factual questions covering core microeconomic concepts, market structures, and supply and demand theory.

economics theory market

15 Questions Medium Ages 16+ Aug 30, 2026

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About this Study Set

This study set covers Microeconomics through 15 practice questions. A collection of factual questions covering core microeconomic concepts, market structures, and supply and demand theory. Every question includes the correct answer so you can learn as you go — pick any format above to get started.

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1 Which law states that, all else being equal, as the price of a good increases, the quantity supplied of that good also increases?

A Law of Diminishing Returns
B Law of Supply
C Law of Demand
D Law of Comparative Advantage

2 What is the term for a market structure characterized by a single seller of a product with no close substitutes?

A Oligopoly
B Perfect Competition
C Monopolistic Competition
D Monopoly

3 In economics, what do 'explicit costs' represent?

A The value of the next best alternative foregone
B Tangible out-of-pocket expenses paid by a firm
C The psychological satisfaction of the consumer
D Implicit opportunity costs

4 What is the point where the quantity demanded equals the quantity supplied in a market?

A Market Equilibrium
B Profit Maximization
C Deadweight Loss
D Marginal Utility

5 Which economic concept explains why the additional satisfaction derived from consuming successive units of a good eventually decreases?

A Law of Supply
B Law of Diminishing Marginal Utility
C Elasticity of Demand
D Economies of Scale

6 What does the 'Price Elasticity of Demand' measure?

A The change in price based on production costs
B The responsiveness of quantity demanded to a change in price
C The total profit margin of a firm
D The relationship between supply and government regulation

7 Which type of good experiences an increase in demand when consumer income rises?

A Inferior good
B Giffen good
C Normal good
D Veblen good

8 What is the term for the additional cost incurred by producing one more unit of a good?

A Average Total Cost
B Fixed Cost
C Marginal Cost
D Sunk Cost

9 In a perfectly competitive market, how are prices determined?

A By the government
B By the largest firm
C By market forces of supply and demand
D By trade unions

10 What occurs when a market outcome is inefficient and does not maximize total surplus?

A Market Equilibrium
B Market Failure
C Perfect Competition
D Pareto Optimality

11 Which cost remains constant regardless of the level of output produced?

A Variable Cost
B Marginal Cost
C Total Cost
D Fixed Cost

12 What is the term for a situation where a small number of firms dominate the market?

A Monopoly
B Monopsony
C Oligopoly
D Perfect Competition

13 What does the 'Substitution Effect' describe?

A The change in consumption resulting from a change in relative prices
B The change in consumption resulting from a change in purchasing power
C The shift in production technology
D The movement along the supply curve

14 Which of the following is considered an 'opportunity cost'?

A The price paid for raw materials
B The potential wage income lost by starting a private business
C The interest paid on a bank loan
D The tax paid to the government

15 What term describes the additional revenue gained from selling one additional unit of a good?

A Average Revenue
B Total Revenue
C Marginal Revenue
D Economic Profit

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