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. Factors of production - 4 categories: labor - physical capital - land/natural resources - and entrepreneurial ability
Resources
Accounting Profit
Marginal Cost (MC)
Increasing Cost Industry
2. A firm that has market power in the factor market (a wage-setter)
Constrained Utility Maximization
Monopsonist
Average Variable Cost (AVC)
Consumer surplus
3. The firm hires the profit maximizing amount of a resource at the point where MRP = MRC
Spillover costs
Profit Maximizing Resource Employment
Law of Increasing Costs
Surplus
4. A market structure characterized by a few small firms producing a differentiated product with easy entry into the market
Monopolistic competition
Dead Weight Loss
Price inelastic demand
Utility Maximizing Rule
5. Another way of saying that firms are earning zero economic profits or a fair rate of return on invested resources
Normal Profit
Resources
Shortage
Comparative Advantage
6. The additional benefit received from the consumption of the next unit of a good or service
Monopolistic competition
Demand for Labor
Productive Efficiency
Marginal Benefit (MB)
7. The study of how people - firms - and societies use their scarce productive resources to best satisfy their unlimited material wants.
Economics
Perfectly inelastic
Monopolistic competition long-run equilibrium
Cross-Price Elasticity of Demand
8. 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
Subsidy
Marginal tax rate
Demand for Labor
Opportunity Cost
9. 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
Free-Rider Problem
Total Product of Labor (TPL)
Oligopoly
Shortage
10. Models where firms agree to mutually improve their situation
Demand for Labor
Determinants of Labor Demand
Collusive oligopoly
Unit elastic demand
11. A group of firms that agree not to compete with each other on the basis of price - production - or other competitive dimensions. Cartel members operate as a monopolist to maximize their joint profits
Cartel
Dead Weight Loss
Derived Demand
Average Fixed Cost (AFC)
12. The marginal utility from consumption of more and more of that item falls over time
Law of Diminishing Marginal Utility
Average Total Cost (ATC)
Comparative Advantage
Producer surplus
13. Indirect - non-purchased - or opportunity costs of resources provided by the entrepreneur
Negative externality
Implicit costs
Perfectly competitive long-run equilibrium
Profit Maximizing Rule
14. Ed = 8 - infinite change in demand to price change
Decreasing Cost industry
Specialization
Perfectly elastic
Marginal Analysis
15. TR = P * Qd
Opportunity Cost
Collusive oligopoly
Marginal Revenue Product (MRP)
Total Revenue
16. 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.
Diseconomies of Scale
Substitute Goods
Price inelastic demand
Excess Capacity
17. The rational decision maker chooses an action if MB = MC
Subsidy
Marginal Analysis
Spillover costs
Break-even Point
18. Occurs when LRAC is constant over a variety of plant sizes
Spillover benefits
Economic Growth
Accounting Profit
Constant Returns to Scale
19. Ei > 1
Marginal Product of Labor (MPL)
Complementary Goods
Luxury
Oligopoly
20. The combination of labor and capital that minimizes total costs for a given production rate. Hire L and K so that MPL / PL = MPK / PK or MPL/MPK = PL/PK
Least-Cost Rule
Marginal Analysis
Monopoly long-run equilibrium
Luxury
21. Ei = (%dQd good X)/(%d Income)
Price discrimination
Perfectly inelastic
Income Effect
Income Elasticity
22. Characterized by many small price-taking firms producing a standardized product in an industry in which there are no barriers to entry or exit
Natural Monopoly
Determinants of Supply
Perfect competition
Short run
23. The number of units of any other good Y that must be sacrificed to acquire good X. Only relative prices matter
Relative Prices
Monopolistic competition long-run equilibrium
Substitution Effect
Perfectly competitive long-run equilibrium
24. The least competitive market structure - characterized by a single producer - with no close substitutes - barriers to entry - and price making power
Luxury
Monopoly
Excise Tax
Positive externality
25. The output where ATC is minimized and economic profit is zero
Derived Demand
Break-even Point
Price discrimination
Marginal tax rate
26. Entry (or exit) of firms does not shift the cost curves of firms in the industry
Explicit costs
Monopolistic competition long-run equilibrium
Total Welfare
Constant cost industry
27. Exists at the point where the quantity supplied equals the quantity demanded
Market Equilibrium
Average Variable Cost (AVC)
Cartel
Scarcity
28. 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.
Marginal Revenue Product (MRP)
Non-collusive oligopoly
Marginal tax rate
Oligopoly
29. 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
Determinants of Supply
Law of Increasing Costs
Scarcity
Break-even Point
30. Pmc < MR = MC and Pmc > minimum ATC so outcome is not efficient - but profit = 0.
Private goods
Monopolistic competition long-run equilibrium
Price inelastic demand
Explicit costs
31. 0 < Ei < 1
Private goods
Four-firm concentration ratio
Allocative Efficiency
Necessity
32. The change in quantity demanded resulting from a change in the price of one good relative to other goods
Substitution Effect
Economies of Scale
Perfectly competitive long-run equilibrium
Total Product of Labor (TPL)
33. The additional cost incurred from the consumption of the next unit of a good or a service
Marginal Cost (MC)
Fixed inputs
Private goods
Subsidy
34. Product demand - productivity - prices of other resources - and complementary resources
Law of Supply
Public goods
Determinants of Labor Demand
Average Fixed Cost (AFC)
35. AVC = TVC/Q
Average Variable Cost (AVC)
Market Equilibrium
Normal Profit
Scarcity
36. Excess supply; exists at a market price when the quantity supplied exceeds the quantity demanded.
Total variable costs (TVC)
Determinants of Supply
Surplus
Perfectly inelastic
37. 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
Allocative Efficiency
Shutdown Point
Fixed inputs
Implicit costs
38. AFC = TFC/Q
Consumer surplus
Average Product of Labor (APL)
Determinants of elasticity
Average Fixed Cost (AFC)
39. Production of the combination of goods and services that provides the most net benefit to society. The optimal quantity of a good is achieved when the MB = MC of the next unit and only occurs at one point on the PPF
Public goods
Free-Rider Problem
Allocative Efficiency
Perfectly elastic
40. The most desirable alternative given up as the result of a decision
Law of Supply
Opportunity Cost
Dead Weight Loss
Marginal Resource Cost (MRC)
41. Occurs when an economy's production possibilities increase. This can be a result of more resources - better resources - or improvements in technology.
Determinants of Supply
Economic Growth
Productive Efficiency
Private goods
42. A period of time long enough to alter the plant size. New firms can enter the industry and existing firms can liquidate and exit
Economic Growth
Complementary Goods
Long Run
Absolute Advantage
43. Ed < 1
Price inelastic demand
Resources
Fixed inputs
Economics
44. The sum of consumer surplus and producer surplus
Profit Maximizing Rule
Income Elasticity
Total Welfare
Derived Demand
45. Excess demand; a shortage exists at a market price when the quantity demanded exceeds the quantity supplied
Excess Capacity
Substitute Goods
Shortage
Law of Demand
46. Demand for a resource like labor is derived from the demand for the goods produced by the resource
Derived Demand
Shortage
Total variable costs (TVC)
Spillover costs
47. MUx / Px = MUy/Py or MUx/MUy = Px/Py
Allocative Efficiency
Utility Maximizing Rule
Determinants of Labor Demand
Marginal Benefit (MB)
48. The difference between total revenue and total explicit and implicit costs
Comparative Advantage
Natural Monopoly
Spillover costs
Economic Profit
49. Two goods are consumer substitutes if they provide essentially the same utility to consumers
Price inelastic demand
Price Elasticity of Supply
Shutdown Point
Substitute Goods
50. A good for which higher income increases demand
Income Effect
Least-Cost Rule
Normal Goods
Constrained Utility Maximization
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
Certifications
CISSP go to https://www.isc2.org/
PMP
ITIL
RHCE
MCTS
More...
IT Skills
Android Programming
Data Modeling
Objective C Programming
Basic Python Programming
Adobe Illustrator
More...
Business Skills
Advertising Techniques
Business Accounting Basics
Business Strategy
Human Resource Management
Marketing Basics
More...
Soft Skills
Body Language
People Skills
Public Speaking
Persuasion
Job Hunting And Resumes
More...
Vocabulary
GRE Vocab
SAT Vocab
TOEFL Essential Vocab
Basic English Words For All
Global Words You Should Know
Business English
More...
Languages
AP German Vocab
AP Latin Vocab
SAT Subject Test: French
Italian Survival
Norwegian Survival
More...
Engineering
Audio Engineering
Computer Science Engineering
Aerospace Engineering
Chemical Engineering
Structural Engineering
More...
Health Sciences
Basic Nursing Skills
Health Science Language Fundamentals
Veterinary Technology Medical Language
Cardiology
Clinical Surgery
More...
English
Grammar Fundamentals
Literary And Rhetorical Vocab
Elements Of Style Vocab
Introduction To English Major
Complete Advanced Sentences
Literature
Homonyms
More...
Math
Algebra Formulas
Basic Arithmetic: Measurements
Metric Conversions
Geometric Properties
Important Math Facts
Number Sense Vocab
Business Math
More...
Other Major Subjects
Science
Economics
History
Law
Performing-arts
Cooking
Logic & Reasoning
Trivia
Browse all subjects
Browse all tests
Most popular tests