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






2. The most desirable alternative given up as the result of a decision






3. Holding all else equal - when the price of a good rises - consumers decrease their quantity demanded for that good






4. A per unit tax on production results in a vertical shift in the supply curve by the amount of the tax






5. AFC = TFC/Q






6. MUx / Px = MUy/Py or MUx/MUy = Px/Py






7. The mechanism for combining production resources - with existing technology - into finished goods and services






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






9. The additional cost incurred from the consumption of the next unit of a good or a service






10. ATC = TC/Q = AFC + AVC






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






12. Ed = 8 - infinite change in demand to price change






13. 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






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






15. Indirect - non-purchased - or opportunity costs of resources provided by the entrepreneur






16. The change in total product resulting from a change in the labor input. MPL = dTPL/dL - or the slope of total product






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






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






19. All firms maximize profit by producing where MR = MC






20. Occurs when there is no more incentive for firms to enter or exit. P=MR=MC=ATC and profit = 0






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






23. Ei = (%dQd good X)/(%d Income)






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






25. Costs that change with the level of output. If output is zero - so are TVCs.






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






27. The additional benefit received from the consumption of the next unit of a good or service






28. 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






29. 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






30. 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






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






32. Two goods are consumer complements if they provide more utility when consumed together than when consumed separately






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






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






35. 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






36. 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






37. A good for which higher income increases demand






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






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






40. Two goods are consumer substitutes if they provide essentially the same utility to consumers






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






42. The output where ATC is minimized and economic profit is zero






43. Exists when the production of a good imposes disutility upon third parties not directly involved in the consumption or production of the good






44. The practice of selling essentially the same good to different groups of consumers at different prices






45. The ability to set the price above the perfectly competitive level






46. Entry of new firms shifts the cost curves for all firms upward






47. Models where firms are competitive rivals seeking to gain at the expense of their rivals






48. 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






49. The difference between total revenue and total explicit and implicit costs






50. 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






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