AnswersEconomicsMicroeconomics

Microeconomics — Test Answers

24 verified answers1 views
1
Free Preview

Profit equals the total amount of money made minus

A
expenses.
B
revenue.
C
prices.
D
supply.
2
Free Preview

The point of maximum profit is the point at which the marginal cost equals the

A
total revenue.
B
marginal revenue.
C
production cost.
D
market price.
3

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total revenue the company makes after selling 10 boards?

A
$300
B
$400
C
$350
D
$450
4

In pure competition, producers compete exclusively on the basis of

A
advertising heavily to promote their good.
B
focusing on maintaining a positive image.
C
producing the unique features of their good.
D
selling identical items.
6

Natural monopolies occur when one producer

A
can meet the market’s entire demand.
B
is the only one authorized to produce a given product.
C
creates unique products.
D
controls the method of production.
7

Equilibrium is defined when

A
demand is higher than supply.
B
supply is higher than demand.
C
supply and demand meet.
D
supply is limited and demand decreases.
8

Which best describes how the government sanctions technological monopolies?

A
by prohibiting others from entering the market
B
by creating the technology itself
C
by authorizing one producer
D
by issuing a patent for the technology
9

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total profit the company earns after selling 100 boards?

A
$350
B
$300
C
$3,000
D
$3,500
10

Supply and demand coordinate to determine prices by working

A
together.
B
competitively.
C
with other factors.
D
separately.
11

Which best describes the availability of substitutes in a monopoly?

A
There are different brands.
B
Price points vary.
C
Products have different features.
D
There are no substitutes.
12

On a graph, an equilibrium point is where

A
the supply and demand curves head down.
B
the supply and demand curves head up.
C
a supply curve is higher than a demand curve.
D
a supply curve and a demand curve meet.
13

Why is pure competition considered an unsustainable system?

A
Consumers cannot distinguish between products.
B
Few barriers exist to entry, meaning that the market inevitably floods.
C
Producers cannot make a profit if they keep dropping their prices.
D
Price differentiation is often too minimal to matter.
14

The Davis family grows organic vegetables to sell at a local farmer’s market. Which are factors that directly affect their profit? Choose three correct answers.

A
an increase in the cost of farm equipment
B
a sale on organic meats at the market
C
a rise in demand for organic produce
D
an increase in customers at the market
E
a change in the market price for non-organic fruit
15

The total amount of a product available in a market at a given price is called the

A
count.
B
number.
C
supply.
D
demand.
16

Which aspect of monopolistic competition gives consumers more choice?

A
Few barriers to market entry exist.
B
Producers are more concerned about selection than profits.
C
Producers rely on consumer decisions to succeed.
D
Price is not an important factor.
17

When supply is higher than demand, prices will

A
rise until the supply falls.
B
rise until the demand falls.
C
fall until the supply rises.
D
fall until the demand rises.
18

A market supply schedule shows

A
how prices affect a group of consumers.
B
the prices and quantity in an entire market.
C
how prices affect a single producer.
D
the products of two companies only.
19

According to the law of supply, price and quantity move

A
from the same point away from one another.
B
from different points toward one another.
C
along a track in the same direction.
D
along a track in opposite directions.
20

This chart shows the link between

A
amount of a product and the price a consumer pays.
B
amount of a product and the price a producer pays.
C
interest in a product and the price a producer pays.
D
interest in a product and the price a consumer pays.
21

What does "P" represent on the graph?

A
the point where equilibrium is achieved
B
the price at the equilibrium point
C
the average price of goods sold
D
the point where supply and demand drop

Did you find these answers helpful?

More from this Course

Quiz
23 verified answers

Test

Quiz
25 verified answers

Test

Quiz
24 verified answers

Test