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. 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
Law of Diminishing Marginal Utility
Public goods
Average Total Cost (ATC)
Comparative Advantage
2. Models where firms agree to mutually improve their situation
Comparative Advantage
Collusive oligopoly
Negative externality
Utility Maximizing Rule
3. An economic system based upon the fundamentals of private property - freedom - self-interest - and prices
Market Economy (Capitalism)
Short run
Producer surplus
Cross-Price Elasticity of Demand
4. Two goods are consumer substitutes if they provide essentially the same utility to consumers
Non-collusive oligopoly
Substitute Goods
Total Welfare
Law of Demand
5. Occurs when LRAC is constant over a variety of plant sizes
Market Economy (Capitalism)
Constant Returns to Scale
Subsidy
Constant cost industry
6. Exists at the point where the quantity supplied equals the quantity demanded
Luxury
Dead Weight Loss
Price Ceiling
Market Equilibrium
7. The difference between the monopolistic competition output Qmc and the output at minimum ATC. Excess capacity is underused plant and equipment
Specialization
Average Product of Labor (APL)
Excess Capacity
Increasing Cost Industry
8. 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
Marginal tax rate
Average Total Cost (ATC)
Total Product of Labor (TPL)
Private goods
9. AVC = TVC/Q
Fixed inputs
Average Variable Cost (AVC)
Shutdown Point
Dead Weight Loss
10. Consumer income - prices of substitute and complementary goods - consumer tastes and preferences - consumer speculation - and number of buyers in the market all influence demand
Determinants of Demand
Positive externality
Natural Monopoly
Marginal Cost (MC)
11. Ei > 1
Average Total Cost (ATC)
Luxury
Determinants of Labor Demand
Dead Weight Loss
12. The firm hires the profit maximizing amount of a resource at the point where MRP = MRC
Profit Maximizing Resource Employment
Long Run
Cross-Price Elasticity of Demand
Consumer surplus
13. Occurs when there is no more incentive for firms to enter or exit. P=MR=MC=ATC and profit = 0
Perfectly competitive long-run equilibrium
Increasing Cost Industry
Income Effect
Price Ceiling
14. Occurs when an economy's production possibilities increase. This can be a result of more resources - better resources - or improvements in technology.
Perfectly inelastic
Marginal Cost (MC)
Economic Growth
Marginal Product of Labor (MPL)
15. Entry of new firms shifts the cost curves for all firms downward
Decreasing Cost industry
Surplus
Price floor
Increasing Cost Industry
16. Entry (or exit) of firms does not shift the cost curves of firms in the industry
Constant cost industry
Market Equilibrium
Economics
Economic Growth
17. The sum of consumer surplus and producer surplus
Marginal Benefit (MB)
Total Welfare
Long Run
Price inelastic demand
18. The mechanism for combining production resources - with existing technology - into finished goods and services
Production function
Diseconomies of Scale
Marginal Benefit (MB)
Subsidy
19. 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
Short run
Price Ceiling
Determinants of Supply
Consumer surplus
20. Ed = 1
Subsidy
Law of Increasing Costs
Unit elastic demand
Economics
21. The total quantity - or total output of a good produced at each quantity of labor employed
Productive Efficiency
Collusive oligopoly
Necessity
Total Product of Labor (TPL)
22. Exists if a producer can produce a good at lower opportunity cost than all other producers
Positive externality
Comparative Advantage
Increasing Cost Industry
Private goods
23. The change in quantity demanded that results from a change in the consumer's purchasing power (or real income)
Determinants of Supply
Income Effect
Profit Maximizing Rule
Constrained Utility Maximization
24. A period of time long enough to alter the plant size. New firms can enter the industry and existing firms can liquidate and exit
Diseconomies of Scale
Long Run
Economic Growth
Marginal tax rate
25. The difference between total revenue and total explicit and implicit costs
Income Effect
Economic Profit
Determinants of Supply
Economics
26. 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
Demand for Labor
Shutdown Point
Economic Profit
Determinants of Demand
27. Pmc < MR = MC and Pmc > minimum ATC so outcome is not efficient - but profit = 0.
Increasing Cost Industry
Cross-Price Elasticity of Demand
Natural Monopoly
Monopolistic competition long-run equilibrium
28. Has opposite effect of an excise tax - as it lowers the marginal cost of production - forcing the supply curve down
Subsidy
Market Economy (Capitalism)
Production function
Accounting Profit
29. The more of a good that is produced - the greater the opportunity cost of producing the next unit of that good
Total Revenue Test
Substitution Effect
Law of Increasing Costs
Average Fixed Cost (AFC)
30. The imbalance between limited productive resources and unlimited human wants
Scarcity
Natural Monopoly
Price inelastic demand
Law of Supply
31. 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
Price discrimination
Price inelastic demand
Public goods
Spillover costs
32. MUx / Px = MUy/Py or MUx/MUy = Px/Py
Utility Maximizing Rule
Subsidy
Price elastic demand
Resources
33. The philosophy that a citizen should receive a share of economic resources proportional to the marginal revenue product of his or her productivity
Total Fixed Costs (TFC)
Average Product of Labor (APL)
Comparative Advantage
Marginal Productivity Theory
34. The output where ATC is minimized and economic profit is zero
Comparative Advantage
Break-even Point
Total Product of Labor (TPL)
Incidence of Tax
35. 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
Marginal Resource Cost (MRC)
Allocative Efficiency
Monopsonist
Perfectly competitive long-run equilibrium
36. Ed = 8 - infinite change in demand to price change
Price discrimination
Inferior Goods
Perfectly elastic
Incidence of Tax
37. The rational decision maker chooses an action if MB = MC
Absolute Advantage
Long Run
Fixed inputs
Marginal Analysis
38. 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
Scarcity
Monopolistic competition
Producer surplus
Marginal Productivity Theory
39. 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
Monopolistic competition long-run equilibrium
Economic Profit
Price Elasticity of Supply
Constrained Utility Maximization
40. A market structure characterized by a few small firms producing a differentiated product with easy entry into the market
Oligopoly
Spillover costs
Monopolistic competition
Average Variable Cost (AVC)
41. 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
Total variable costs (TVC)
Price floor
Monopoly long-run equilibrium
Absolute prices
42. Two goods are consumer complements if they provide more utility when consumed together than when consumed separately
Marginal Product of Labor (MPL)
Monopsonist
Complementary Goods
Price elasticity
43. Exists if a producer can produce more of a good than all other producers
Demand for Labor
Absolute Advantage
Total Fixed Costs (TFC)
Profit Maximizing Rule
44. ATC = TC/Q = AFC + AVC
Total Fixed Costs (TFC)
Fixed inputs
Substitute Goods
Average Total Cost (ATC)
45. The difference between total revenue and total explicit costs
Unit elastic demand
Economies of Scale
Shutdown Point
Accounting Profit
46. 0 < Ei < 1
Non-collusive oligopoly
Necessity
Determinants of Supply
Accounting Profit
47. The additional cost incurred from the consumption of the next unit of a good or a service
Marginal Benefit (MB)
Marginal Cost (MC)
Comparative Advantage
Total Revenue Test
48. All firms maximize profit by producing where MR = MC
Profit Maximizing Rule
Constrained Utility Maximization
Price inelastic demand
Implicit costs
49. Additional benefits to society not captured by the market demand curve from the production of a good - result in a price that is too high and a market quantity that is too low. Resources are underallocated to the production of this good
Production function
Price floor
Consumer surplus
Spillover benefits
50. Production of maximum output for a given level of technology and resources. All points on the PPF are productively efficient
Negative externality
Total Product of Labor (TPL)
Total variable costs (TVC)
Productive Efficiency