SUBJECTS
|
BROWSE
|
CAREER CENTER
|
POPULAR
|
JOIN
|
LOGIN
Business Skills
|
Soft Skills
|
Basic Literacy
|
Certifications
About
|
Help
|
Privacy
|
Terms
|
Email
Search
Test your basic knowledge |
AP Microeconomics
Start Test
Study First
Subjects
:
economics
,
ap
Instructions:
Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can
study here
.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.
This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. The practice of selling essentially the same good to different groups of consumers at different prices
Perfect competition
Price discrimination
Law of Demand
Law of Supply
2. Ed = (%dQd)/(%dP). Ignore negative sign
Market Equilibrium
Marginal tax rate
Monopolistic competition
Price elasticity
3. The imbalance between limited productive resources and unlimited human wants
Accounting Profit
Utility Maximizing Rule
Scarcity
Determinants of Demand
4. Ed = 0 - no response to price change
Total Revenue Test
Excess Capacity
Total Welfare
Perfectly inelastic
5. A market structure characterized by a few small firms producing a differentiated product with easy entry into the market
Private goods
Public goods
Perfectly elastic
Monopolistic competition
6. Production inputs that the firm can adjust in the short run to meet changes in demand for their output. Often this is labor and/or raw materials
Variable inputs
Marginal Analysis
Public goods
Dead Weight Loss
7. Two goods are consumer complements if they provide more utility when consumed together than when consumed separately
Economics
Complementary Goods
Collusive oligopoly
Shutdown Point
8. The price of a good measured in units of currency
Absolute prices
Specialization
Shutdown Point
Allocative Efficiency
9. A per unit tax on production results in a vertical shift in the supply curve by the amount of the tax
Complementary Goods
Excise Tax
Determinants of Labor Demand
Substitute Goods
10. Ed = 8 - infinite change in demand to price change
Economics
Implicit costs
Perfectly elastic
Unit elastic demand
11. Measures the value of what the next unit of a resource (e.g. - labor) brings to the firm. MRPL = MR x MPL. In a perfectly competitive product market - MRPL = P x MPL. In a monopoly product market - MR < P so MRPm < MRPc.
Economics
Perfectly elastic
Marginal Revenue Product (MRP)
Decreasing Cost industry
12. The ability to set the price above the perfectly competitive level
Non-collusive oligopoly
Market power
Price Elasticity of Supply
Marginal Resource Cost (MRC)
13. The mechanism for combining production resources - with existing technology - into finished goods and services
Positive externality
Price floor
Demand for Labor
Production function
14. Ei = (%dQd good X)/(%d Income)
Income Elasticity
Perfect competition
Law of Supply
Oligopoly
15. Measures the cost the firm incurs from using an additional unit of input. In a perfectly competitive labor market - MRC = Wage. In a monopsony labor market - the MRC > Wage
Constant cost industry
Marginal Resource Cost (MRC)
Monopsonist
Dead Weight Loss
16. A firm that has market power in the factor market (a wage-setter)
Variable inputs
Free-Rider Problem
Determinants of Demand
Monopsonist
17. The rational decision maker chooses an action if MB = MC
Income Effect
Marginal Analysis
Producer surplus
Perfectly inelastic
18. A period of time too short to change the size of the plant - but many other - more variable resources can be changed to meet demand
Average Total Cost (ATC)
Normal Profit
Short run
Free-Rider Problem
19. 0 < Ei < 1
Collusive oligopoly
Necessity
Market power
Specialization
20. Occurs when an economy's production possibilities increase. This can be a result of more resources - better resources - or improvements in technology.
Perfectly elastic
Economic Growth
Normal Goods
Consumer surplus
21. Pmc < MR = MC and Pmc > minimum ATC so outcome is not efficient - but profit = 0.
Free-Rider Problem
Monopolistic competition long-run equilibrium
Productive Efficiency
Market Economy (Capitalism)
22. Entry of new firms shifts the cost curves for all firms upward
Price Elasticity of Supply
Price inelastic demand
Increasing Cost Industry
Relative Prices
23. The marginal utility from consumption of more and more of that item falls over time
Private goods
Law of Diminishing Marginal Utility
Demand for Labor
Variable inputs
24. The study of how people - firms - and societies use their scarce productive resources to best satisfy their unlimited material wants.
Economics
Relative Prices
Profit Maximizing Resource Employment
Average Variable Cost (AVC)
25. When firms focus their resources on production of goods for which they have comparative advantage
Marginal Revenue Product (MRP)
Comparative Advantage
Specialization
Substitution Effect
26. Exists when the production of a good imposes disutility upon third parties not directly involved in the consumption or production of the good
Negative externality
Total Revenue Test
Law of Diminishing Marginal Utility
Absolute Advantage
27. The output where ATC is minimized and economic profit is zero
Income Elasticity
Break-even Point
Derived Demand
Total Revenue
28. Another way of saying that firms are earning zero economic profits or a fair rate of return on invested resources
Implicit costs
Substitution Effect
Subsidy
Normal Profit
29. Product demand - productivity - prices of other resources - and complementary resources
Normal Goods
Private goods
Law of Increasing Costs
Determinants of Labor Demand
30. TR = P * Qd
Total Revenue
Absolute prices
Producer surplus
Surplus
31. The output where AVC is minimized. If the price falls below this point - the firm chooses to shut down or produce zero units in the short run
Shutdown Point
Free-Rider Problem
Average Product of Labor (APL)
Explicit costs
32. The more of a good that is produced - the greater the opportunity cost of producing the next unit of that good
Implicit costs
Marginal Revenue Product (MRP)
Price inelastic demand
Law of Increasing Costs
33. The least competitive market structure - characterized by a single producer - with no close substitutes - barriers to entry - and price making power
Spillover benefits
Monopoly long-run equilibrium
Monopoly
Producer surplus
34. The rate paid on the last dollar earned. This is found by taking the ratio of the change in taxes divided by the change in income
Normal Goods
Comparative Advantage
Marginal tax rate
Price Elasticity of Supply
35. Substitutes - cost as percentage of income - and time to adjust to price changes all influence price elasticity
Spillover benefits
Average Product of Labor (APL)
Income Effect
Determinants of elasticity
36. Ex -y = (%dQd good X) / (%d Price Y). If Ex -y > 0 - goods X and Y are substitutes. If Ex -y < 0 - goods X and Y are complementary
Cross-Price Elasticity of Demand
Collusive oligopoly
Price elastic demand
Opportunity Cost
37. The difference between your willingness to pay and the price you actually pay. It is the area below the demand curve and above the price
Constant cost industry
Short run
Average Variable Cost (AVC)
Consumer surplus
38. A very diverse market structure characterized by a small number of interdependent large firms - producing a standardized or differentiated product in a market with a barrier to entry
Oligopoly
Demand for Labor
Break-even Point
Substitute Goods
39. A measure of industry market power. Sum the market share of the four largest firms and a ratio above 40% is a good indicator of oligopoly
Derived Demand
Determinants of elasticity
Excise Tax
Four-firm concentration ratio
40. Costs that change with the level of output. If output is zero - so are TVCs.
Spillover benefits
Incidence of Tax
Explicit costs
Total variable costs (TVC)
41. Excess demand; a shortage exists at a market price when the quantity demanded exceeds the quantity supplied
Spillover benefits
Income Elasticity
Shortage
Negative externality
42. Goods that are both rival and excludable. Only one person can consume the good at a time and consumers who do not pay for the good are excluded from consumption
Variable inputs
Private goods
Monopolistic competition long-run equilibrium
Monopoly
43. Total revenue rises with a price increase if demand is price inelastic and falls with a price increase if demand is price elastic
Total Revenue Test
Price elastic demand
Perfect competition
Marginal Revenue Product (MRP)
44. Entry (or exit) of firms does not shift the cost curves of firms in the industry
Price Elasticity of Supply
Diseconomies of Scale
Resources
Constant cost industry
45. Additional costs to society not captured by the market supply curve from the production of a good - result in a price that is too low and a market quantity that is too high. Resources are overallocated to the production of this good
Total Product of Labor (TPL)
Normal Profit
Spillover costs
Allocative Efficiency
46. The difference between the price received and the marginal cost of producing the good. It is the area above the supply curve and under the price
Perfect competition
Perfectly inelastic
Producer surplus
Non-collusive oligopoly
47. An economic system based upon the fundamentals of private property - freedom - self-interest - and prices
Derived Demand
Absolute prices
Market Economy (Capitalism)
Price elastic demand
48. The firm hires the profit maximizing amount of a resource at the point where MRP = MRC
Total Product of Labor (TPL)
Monopolistic competition long-run equilibrium
Surplus
Profit Maximizing Resource Employment
49. Goods that are both nonrival and nonexcludable. One person's consumption does not prevent another from also consuming that good and if it is provided to some - it is necessarily provided to all - even if they do not pay for that good
Marginal Benefit (MB)
Price elastic demand
Public goods
Price Elasticity of Supply
50. The proportion of the tax paid by the consumers in the form of a higher price for the taxed good is greater if demand for the good is inelastic and supply is elastic
Marginal Product of Labor (MPL)
Implicit costs
Average Fixed Cost (AFC)
Incidence of Tax