A
Which of the following is NOT a factor of production?
A. Land
B. Labour
C. Money
D. Capital
C. Money
The short run is a period of time in which __________.
A. the quantity of at least one factor of production is fixed
B. the amount of output is fixed
C. prices and wages are fixed
D. nothing the firm does can be altered
A. the quantity of at least one factor of production is fixed
If there is a shortage of a product, we can conclude that its price _________.
A) is below the equilibrium level
B) is above the equilibrium level
C) will fall in the near future
D) is in equilibrium
A) is below the equilibrium level
What does consumer behavior primarily study in microeconomics?
A. How firms determine production levels
B. How consumers make choices based on preferences
C. The impact of government policies on firms
D. The supply side of the market
B. How consumers make choices based on preferences
The long run is a time in which __________.
A. at least one input is fixed
B. the total of output is fixed
C. at least one input is variable
D. all factors of production are variable
D. all factors of production are variable
The principle stating that additional consumption of a good will lead to a fall in the added satisfaction obtained from it is known as:
A. Law of diminishing marginal utility
B. Price elasticity of demand
C. Law of diminishing returns
D. Consumer equilibrium
A. Law of diminishing marginal utility
The law of diminishing marginal utility states that as a consumer consumes more of a good, the additional satisfaction derived from consuming each additional unit:
A) Increases
B) Decreases
C) Remains constant
D) Becomes negative immediately
B) Decreases
Which of the following best represents a determinant of consumer demand?
A. Consumer preferences
B. Price of related goods
C. Income level
D. All of the above
D. All of the above
A consumer is considered to be in equilibrium when_________.
A) They achieve maximum satisfaction with the given budget
B) They spend their entire income on the most expensive electronics
C) Their marginal utility from all goods becomes zero
D) They minimize the consumption of all products
A) They achieve maximum satisfaction with the given budget
Which of the flowing statement is possible?
A. Total utility decrease when marginal utility is zero
B. Total utility increase when marginal utility is positive
C. Total utility decrease when marginal utility is positive
D. Total utility increase when marginal utility is negative
B. Total utility increase when marginal utility is positive
If the market price is above equilibrium price, there will be __________.
A. Shortage
B. Surplus
C. Scarcity
D. No effect
B. Surplus
Which of the following is correct regarding marginal cost?
A. It shows the change in total cost from producing one more unit
B. It never changes as output increases
C. It is always lower than average variable cost
D. It measures the total cost divided by output
A. It shows the change in total cost from producing one more unit
If a consumer moves downward along an indifference curve, what does this indicate?
A. The consumer is indifferent between two bundles
B. The consumer is giving up some of one good to get more of another while keeping the same satisfaction
C.The consumer’s satisfaction is increasing
D. The consumer’s budget constraint is shifting outward
B. The consumer is giving up some of one good to get more of another while keeping the same satisfaction
The AFC equals the
A. TC minus total output
B. AFC divided by AVC
C. ATC minus AVC
D. AFC plus AVC
C. ATC minus AVC
If marginal utility is positive but declining, then total utility is___________.
A) increasing
B) stagnant
C) decreasing
D) remain constant
A) increasing
When marginal utility is decreasing but positive, total utility is _________ at a/an __________ rate.
A) increasing; decreasing
B) increasing; increasing
C) decreasing; decreasing
D) decreasing; increasing
A) increasing; decreasing
Marginal product and average product curves intersect when average product is _________.
A. zero
B. negative
C. at its minimum point
D. at its maximum point
D. at its maximum point
The ATC equals the
A. TC minus total output
B. AFC divided by AVC
C. AFC minus AVC
D. AFC plus AVC
D. AFC plus AVC
The portion of total cost that remains constant regardless of the level of output and equals the difference between total cost and total variable cost is called
A. Average fixed cost
B. Marginal cost
C. Fixed cost
D. Opportunity cost
C. Fixed cost
When the government sets a maximum price for a product that is below its equilibrium price, what is the most probable result?
A) Producers will supply more than consumers want
B) A shortage will appear because demand exceeds supply
C) The market will clear with no surplus or shortage
D) Illegal trading channels may develop due to scarcity
B) A shortage will appear because demand exceeds supply
When a firm hires additional workers while keeping the number of machines constant, and each new worker contributes less to total output than the previous one, this illustrates:
A. Law of Diminishing Marginal Returns
B. Increasing returns to scale
C. Law of Demand
D. Constant marginal returns
A. Law of Diminishing Marginal Returns
When total product (TP) rises but at a slower pace, what happens to marginal product (MP)?
A. Increasing
B. Decreasing
C. Constant
D. Negative
B. Decreasing
When a 5th slice of pizza does not generate as much satisfaction as the 4th slices, this exemplifies.
A. consumer equilibrium.
B. diminishing total utility.
C. diminishing marginal utility.
D. marginal rate of substitution.
C. diminishing marginal utility.
At the price of RM8 for a burger and RM4 for a cup of coffee, a consumer can afford to buy 6 burgers and 5 cups of coffee. If the consumer is maximizing his utility at this combination of food and drink, what is his income?
A. RM58
B. RM64
C. RM68
D. RM72
C. RM68
When demand increases and supply remains constant, what happens to the equilibrium price and quantity?
A. Price decreases, quantity increases
B. Price and quantity both increase
C. Price and quantity both decrease
D. Price increases, quantity decreases
B. Price and quantity both increase