SOCIAL STUDIES/ SOCIAL SCIENCE
REVIEWER - Microeconomics
Choose the best answer.
1. When fixed costs are ignored because they are irrelevant
to a business's production decision, they are called _________ costs.
A.
prospective
B.
opportunity
C. sunk
D. marginal
2. If the
price elasticity of supply is 1.2, and price increased by 5% , quantity
supplied would ______.
A. increase by 6%
B. decrease
by 24
C. increase
by 24
D. decrease
by 6%
3. An
improvement in technology will shift the __________ curve to the _____________.
A. demand;
up
B. demand;
down
C. supply; right
D. supply;
left
4. If goods
A and B are compliments then an increase in the price of good A will ______ of
good B.
A. increase
the demand
B. decrease the demand
C. increase
the supply
D. decrease
the supply
5. The value
of a business owner's time is an example of _______.
A. implicit
cost
B. marginal
cost
C. explicit
cost
D. opportunity cost
6. Economics
primarily deals with the concept of _______.
A. surplus
B. profit
C. money
D. scarcity
7. Consumers buy Starbucks coffee
regardless of its change in prices. This implies that Starbucks coffee has a perfectly
_______.
A. inelastic price
B. inelastic demand
C. elastic supply
D. elastic demand
8. Foregone rent on office space owned
and used by the firm is an example of what kind of cost?
A. fixed
B. variable
C. opportunity
D. implicit
9. A firm that shuts down temporarily
has to pay its ________.
A. fixed costs but not its variable costs
B. fixed costs and its variable costs
C. variable costs but not its fixed
costs
D. opportunity costs only
10. Diseconomies of scale occur when
________.
A. short-run average total costs rise
as output decreases
B. long-run average total costs falls
as output increases
C. long-run average total costs rise as output increases
D. short-run average total costs falls
as output increases
11. The difference between accounting
profit and economic profit is ______.
A. implicit costs
B. marginal costs
C. net profit
D. opportunity
12. Total revenue equals _________.
A. gross profit minus total cost
B. price times quantity
C. total assets minus total
liabilities
D. total cost minus opportunity cost
13. What is the fundamental basis for
trade among nations?
A. foreign exchange
B. balance of trade
C. comparative advantage
D. low tariff
14. If Adam Smith is the father of
economics, the founding father of macroeconomics is _________.
A. Peter Drucker
B. David Ricardo
C. John Maynard Keynes
D. Thomas Malthus
15. The decrease in total surplus that
results from a market distortion, such as a tax, is called a/an ___________.
A. deadweight loss
B. implicit cost
C. opportunity cost
D. externality
16. It is a concept developed by Adam
Smith to describe the virtues of free markets.
A. Laissez-faire
B. Economics
C. Capitalism
D. Invisible hand
17. The difference between the buyer's
reservation price and the price he or she actually pays.
A. Discount Price
B. Buyer's Surplus
C. Ceiling Price
D. Cash on the Table
18. The demand for a good is elastic
with respect to price if its price elasticity of demand is ______ 1.
A. equal to
B. lesser than
C. greater than
D. at least
19. A tax that collects the same
amount from every taxpayer.
A. Income tax
B. Value-added tax
C. Ad valorem tax
D. Head tax
20. It refers to a good whose demand
curve shifts leftward when the incomes of buyers increase.
A. Inferior Good
B. Complement Good
C. Substitute Good
D. Normal Good
21. Hilda was very excited when she
opened her graduation gifts and found out that it was a Barbie doll. However,
her excitement waned when she opened the remaining boxes and they also
contained Barbie dolls. This situation illustrates the __________.
A. Law of Diminishing Returns
B. Law of Diminishing Marginal Utility
C. Law of Supply and Demand
D. Law of Self-interest
22. A term increasingly used to
connote having services performed by low-wage workers overseas.
A. Outsourcing
B. Offshoring
C. Nearshoring
D. Sweatshop
23. A public expenditure that is
larger than the total benefit it creates but that is favored by a legislator
because his or her constituents benefit from the expenditure by more than their
share of the resulting extra taxes.
A. Mandatory Spending
B. Pork Barrel Spending
C. Discretionary Spending
D. Appropriation Bill
24. It is a curve that plots the
relationship between the quantity of x consumed and income.
A. Supply & Demand curve
B. Price-consumption curve
C. Marshallian demand curve
D. Engel curve
25. "Greatest happiness for the
greatest number"
A. Utilitarianism
B. Communism
C. Humanism
D. Gestalt
ANSWERS
