Econ
Understanding Economic Principles Quiz
Test your knowledge in economic concepts with this engaging quiz! Designed for students and enthusiasts alike, it covers fundamental theories and principles in economics, including utility, consumer surplus, production costs, and more.
Challenge yourself with questions such as:
- The law of diminishing marginal utility
- Understanding consumer surplus
- Explicit vs. implicit costs
Which of the following statements is true of the law of diminishing marginal utility?
The law of diminishing marginal utility states that as more units of a good are consumed, total utility becomes lesser.
The law of diminishing marginal utility states that as more units of a good are consumed, total utility becomes higher.
The law of diminishing marginal utility states that as more units of a good are consumed, the marginal utility from the consumption of the next unit becomes higher.
The law of diminishing marginal utility states that as more units of a good are consumed, the marginal utility from the consumption of the next unit becomes lesser.
According to the law of diminishing marginal utility, the more of a product a person consumes per time period, other things constant, _____.
The larger will be the satisfaction derived per unit
the smaller will be the total utility
The smaller will be the addition to total utility
The higher will be the price of the product in the market
Marginal utility is defined as:
the addition to total satisfaction resulting from an additional unit of consumption.
The total satisfaction derived from consuming a given amount of a product.
The difference in the total satisfaction derived from the consumption of any two products.
The total satisfaction per unit of consumption.
The utility derived by a consumer from consuming a good depends on:
the market demand for the good.
His or her income.
The consumer's tastes and preferences.
The price of the good.
Which of the following statements describes the economic concept of utility?
Utility is the total number of units of a commodity that a consumer buys.
Utility measures the usefulness of goods such as tools or food, so goods such as artwork or attractive landscaping by definition have no utility.
Utility measures the satisfaction, or pleasure, that people receive from consuming a good or service.
Utility measures the purchasing power of individuals.
Economists assume that individuals consume products to:
minimize total utility.
Maximize total utility.
Minimize marginal utility.
Minimize marginal utility.
If a good is free, _____.
people will continue to increase consumption until total utility is equal to marginal utility.
People will continue to increase consumption until total utility is equal to opportunity cost.
People will continue to increase consumption until marginal utility is equal to zero.
People will continue to increase consumption until total utility is equal to zero.
Suppose Pedro buys a mountain bike for $200, which he was willing to pay up to $300 for. Pedro's consumer surplus in this transaction equals _____.
$100
$300
$200
$500
Consumer surplus is represented by:
The area under the demand curve but above the price.
The area under the demand curve and below the price.
The total area under the demand curve.
The area above the supply curve but below the price.
Consumer surplus, the net benefit that consumers get from market exchange, can be used to:
Measure economic growth.
Measure the purchasing power of consumers.
Measure market supply.
Measure economic welfare.
Along the demand curve for a good, the price reflects _____.
the consumer surplus from the good
A consumer's marginal valuation of the good
The total utility from the consumption of the good
a consumer's marginal cost for the good
Economists assume that the goal of a firm is to:
Maximize total profit.
Maximize utility.
minimize production.
Maximize total revenue.
A firm's _____ are its actual cash payments for resources.
Explicit costs
Marginal costs
Sunk costs
Implicit costs
Which of the following is an explicit cost?
The opportunity cost of the money a business owner has invested in a firm.
The price of the entrepreneur's land used for constructing a factory and a warehouse.
The wages a firm pays to its workers.
The opportunity cost of an entrepreneur's time invested in a firm.
_____ costs represent a firm's opportunity costs of using its own resources or those provided by its owners without a corresponding cash payment.
Implicit
Sunk
Explicit
Marginal
Economic profit is defined as the difference between:
A. Total revenue and total costs, both explicit and implicit.
Total revenue and total implicit cost.
Explicit costs and implicit costs.
Total revenue and total explicit cost.
Accounting profit is defined as the difference between a firm's:
total revenue and total cost, including both explicit and implicit costs.
Total revenue and its explicit costs.
Explicit costs and implicit costs.
Total revenue and its implicit costs.
Normal profit refers to:
A firm's total revenue minus its implicit costs.
The profit earned by a firm when explicit costs are deducted from its total revenue.
The profit earned by a firm when all resources used by the firm earn their opportunity cost
A firm's total revenue minus its explicit and implicit costs
Economists define the short run as a time period in which:
All resources are variable.
The size of a firm can be varied.
All resources are fixed.
at least one input is fixed.
Which of the following represents the key difference between the short run and the long run?
In the long run, at least one of the firm's resources is fixed, while in the short run, all resources under the firm's control are fixed
In the short run, at least one of the firm's resources is fixed, while in the long run, all resources under the firm's control are variable.
In the long run, at least one of the firm's resources is fixed, while in the short run, all resources under the firm's control are variable.
The short run is the period in which a firm can earn only normal profits, while the long run is the period in which the firm can earn economic profits.
The change in output due to a one-unit change in labor usage, the level of usage of other inputs remaining unchanged, is called:
The average product of labor.
The marginal revenue product.
The total product of labor.
The marginal product of labor.
According to the law of diminishing marginal returns, as more of a variable input is combined with fixed amounts of other resources, _____.
The additions to output cannot increase
Total output will initially decrease and then increase
The additions to output will become constant
The additions to output will eventually decrease
Which of the following best describes the law of diminishing marginal returns?
The empirical fact that positive economic profits will tend to decline over time as new firms attracted by the extra-normal profit opportunity enter the market.
When more and more capital per labor is used in production, the marginal product of labor eventually declines and could become negative.
When more and more of a variable resource is added to a given amount of a fixed resource, the resulting change in output will eventually diminish and could become negative.
The notion that as a person consumes more and more of a good, such as 12-ounce cups of lemonade, the marginal utility from each additional cup will tend to decline.
Fixed cost is:
Greater than variable cost in the long run.
Inversely related to the amount of input employed.
Positive in the short run even if no output is produced.
The cost incurred on resources such as labor.
The total cost is:
The difference between fixed cost and variable cost.
The cost that is independent of the firm's rate of output.
The sum of fixed cost and variable cost.
The production cost that changes as the rate of output changes.
Calculate the value of the total cost incurred by a firm if its variable cost is $1,000 and its fixed cost is $3,250.
The total cost incurred by the firm is $4,250.
The total cost incurred by the firm is $3,250.
The total cost incurred by the firm is $1,000.
The total cost incurred by the firm is $2,250.
A firm can experience diseconomies of scale due to:
the use of more variable resources in a firm of a fixed size.
A decrease in the fixed costs incurred by the firm.
Decrease in the scale of operation of the firm.
A lack of coordination between different divisions of the firm.
The cost curve that shows the lowest per-unit cost of producing any given level of output is called:
The fixed cost curve.
The variable cost curve.
The long-run marginal cost curve.
the long-run average cost curve.
If the long-run average cost of a firm increases as the size of the firm increases, then the firm is experiencing:
diminishing marginal returns.
Diseconomies of scale.
Increasing marginal returns.
economies of scale.
{"name":"Econ", "url":"https://www.quiz-maker.com/QPREVIEW","txt":"Test your knowledge in economic concepts with this engaging quiz! Designed for students and enthusiasts alike, it covers fundamental theories and principles in economics, including utility, consumer surplus, production costs, and more.Challenge yourself with questions such as:The law of diminishing marginal utilityUnderstanding consumer surplusExplicit vs. implicit costs","img":"https:/images/course1.png"}
More Quizzes
Understanding Economic Principles Quiz
105157
Economics
5252
Economics Quiz 2020 Pretest
15827
Microeconomics Mock Quiz Questions
582925
Section 3: Introduction to Supply and Demand
8416
Lecture 1 Pricing
6339
Econ Midterm 1-5
1005021
EAG 2018/2019 PRACTICE QUIZ 2
158130
Micro
10515
ABM 007 - MODULE 25
1168
Economics - 2
6319
Economics Ch. 5 Sec. 1 Quiz
5223