Multiple choice problems and answers in Micro Economics.
1. Marginal cost is
1. The change in total cost resulting from the purchase of one more unit of the variable input
2. The change in total cost resulting from the production of one more unit of output
3. The difference among total fixed costs and total variable cost
4. The difference among total costs and total expenditure
2. The optimal level of resource use comes when
1. MRP exceeds input price
2. MRP is less than input price
3. MRP equals input price
4. A use of the resource exhausts the capable to producer's funds
3. A grocery store sells up soup for $1)50 a can, or $2)50 for two cans. To a customer, the marginal cost of buying the second can of soup is
1. $1
2. $1)25
3. $1)50
4. $2)50
4. Illustrate what decision rule should be followed to maximize the net benefit of some variable?
1. Choose the value of the variable at which average benefit = average cost
2. Choose the value at which marginal benefit = zero
3. Choose the value at which marginal benefit = marginal cost
4. Choose the value at which total benefit = total cost
5. Companies in perfect competition are often Discussed as
1. Price takers
2. Price makers
3. Price setters
4. Price leaders
6. The key element in preserving a monopoly is
1. Government subsidy of critical enterprises
2. Keeping potential rivals out of the market
3. Guaranteeing availability of substitute products
4. Increased advertising expenditure
7. The force which leads to zero economic profits for monopolistically competitive companies in the long run is
1. Excess capacity
2. Price wars among companies
3. Entry by new companies
4. Excessive advertising
8. Oligopoly occurs when
1. A few companies sell many different products
2. A few companies sell to a few large buyers
3. Many companies dominate a single market
4. A few companies dominate a single market
9. Using prices to promote efficiency in the utilizing of bridges
1. Higher prices should be charged for the use of the most crowded bridges
2. Lower prices should be charged for the use of the uncrowned bridges
3. Traffic would be equalized among the bridges where space is a scare resource
4. All of the above are correct