Test your basic knowledge |

AP Microeconomics

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. Es = (%dQs) / (%dPrice)






2. Occurs when LRAC is constant over a variety of plant sizes






3. The difference between the monopolistic competition output Qmc and the output at minimum ATC. Excess capacity is underused plant and equipment






4. Exists if a producer can produce a good at lower opportunity cost than all other producers






5. The change in quantity demanded that results from a change in the consumer's purchasing power (or real income)






6. TR = P * Qd






7. The firm hires the profit maximizing amount of a resource at the point where MRP = MRC






8. Costs that do not vary with changes in short-run output. They must be paid even when output is zero.






9. Consumer income - prices of substitute and complementary goods - consumer tastes and preferences - consumer speculation - and number of buyers in the market all influence demand






10. A market structure characterized by a few small firms producing a differentiated product with easy entry into the market






11. The change in quantity demanded resulting from a change in the price of one good relative to other goods






12. Ed = (%dQd)/(%dP). Ignore negative sign






13. 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






14. The more of a good that is produced - the greater the opportunity cost of producing the next unit of that good






15. The rational decision maker chooses an action if MB = MC






16. 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






17. The difference between total revenue and total explicit costs






18. Holding all else equal - when the price of a good rises - suppliers increase their quantity supplied for that good






19. A firm that has market power in the factor market (a wage-setter)






20. Ei > 1






21. 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






22. Total product divided by labor employed. APL = TPL/L






23. AVC = TVC/Q






24. Labor demand for the firm is MRPL curve. The labor demanded for the entire market DL = ?MRPL of all firms






25. Ed > 1 - meaning consumers are price sensitive






26. ATC = TC/Q = AFC + AVC






27. Costs of inputs - technology and productivity - taxes/subsidies - producer speculation - price of other goods that could be produced - and number of sellers all influence supply






28. A good for which higher income increases demand






29. Exists when the production of a good creates utility for third parties not directly involved in the consumption of production of the good






30. Direct - purchased - out-of-pocket costs paid to resource suppliers provided by the entrepreneur






31. 0 < Ei < 1






32. Substitutes - cost as percentage of income - and time to adjust to price changes all influence price elasticity






33. Exists if a producer can produce more of a good than all other producers






34. A legal maximum price above which the product cannot be sold. If a floor is installed at some level above the equilibrium price - it creates a permanent shortage






35. For one good - constrained by prices and income - a consumer stops consuming a good when the price paid for the next unit is equal to the marginal benefit received






36. 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






37. Excess supply; exists at a market price when the quantity supplied exceeds the quantity demanded.






38. 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






39. When firms focus their resources on production of goods for which they have comparative advantage






40. The least competitive market structure - characterized by a single producer - with no close substitutes - barriers to entry - and price making power






41. Entry of new firms shifts the cost curves for all firms downward






42. The upward part of the LRAC curve where LRAC rises as plant size increases. This is usually the result of the increased difficulty of managing larger firms - which results in lost efficiency and rising per unit costs.






43. Models where firms agree to mutually improve their situation






44. 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






45. In the case of a public good - some members of the community know that they can consume the public good while others provide for it. This results in a lack of private funding and forces the government to provide it






46. Product demand - productivity - prices of other resources - and complementary resources






47. The imbalance between limited productive resources and unlimited human wants






48. The philosophy that a citizen should receive a share of economic resources proportional to the marginal revenue product of his or her productivity






49. Pm > MR = MC - which is not allocatively efficient and dead weight loss exists. Pm > ATC - which is not productively efficient. Profit > 0 so consumer surplus is transferred to the monopolist as profit






50. The price of a good measured in units of currency







Sorry!:) No result found.

Can you answer 50 questions in 15 minutes?


Let me suggest you:

Browse all subjects

Browse all tests

Most popular tests



Major Subjects

Tests & Exams


AP
CLEP
DSST
GRE
SAT
GMAT

Browse all subjects

Browse all tests

Most popular tests