microeconomics most missed questions

question

When the production possibilities curve is bowed out, resources are

answer

not equally well suited to the production of both goods.

question

Which of the following illustrates the law of supply?

answer

An increase in price causes an increase in the quantity supplied, and a decrease in price causes a decrease in the quantity supplied.
P INCREASE -> Q SUPPLIED INCREASE
P DECREASE -> Q SUPPLIED DECREASE

question

If the demand for a good increases, which of the following will generally occur in a market setting?

answer

The quantity supplied will increase.
Q SUPPLIED INCREASE

question

Which of the following is not a fundamental that underlies consumer behavior?

answer

Consumers always make choices with perfect information.

question

Economic efficiency

answer

is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production.
MB = MC

question

When is output inefficiently low?

answer

When marginal benefit is greater than marginal cost.
MB > MC

question

Both price floors and price ceilings, when effective (binding), lead to

answer

a decrease in the quantity traded.
Q TRADED DECREASE

question

Because the benefits derived from an activity decline as it is expanded, it is generally

answer

efficient to stop well before perfection is achieved.

question

The principle of opportunity cost is that

answer

the economic cost of using a factor of production is the alternative use of that factor that is given up.

question

The demand by all the consumers of a given good or service is the _______ for the good or service.

answer

market demand

question

Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase?

answer

a decrease in the price of cattle

question

Consumers are willing to purchase a product up to the point where

answer

the marginal benefit of consuming a product is equal to its price.
MB = P

question

If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set

answer

equal to the marginal external cost at the economically efficient level of pollution.
= EXTERNAL MC @ EQUILIBRIUM

question

If the market for a product is broadly defined, then

answer

there are few substitutes for the product and the demand for the product is relatively inelastic.
FEW SUBS, INELASTIC D

question

Suppose a decrease in the supply of bottled water results in a decrease in revenue. This indicates that

answer

the demand for bottled water is elastic in the price range considered.
ELASTIC D

question

In the short run, if marginal product is at its maximum, then

answer

marginal cost is at its minimum

question

The minimum efficient scale is

answer

level of operation where long-run average costs are lowest.

question

Which of the following would cause a decrease in the supply of milk?

answer

an increase in the price of a product that producers sell instead of milk.

1 of 18

question

When the production possibilities curve is bowed out, resources are

answer

not equally well suited to the production of both goods.

question

Which of the following illustrates the law of supply?

answer

question

If the demand for a good increases, which of the following will generally occur in a market setting?

answer

The quantity supplied will increase.
Q SUPPLIED INCREASE

question

Which of the following is not a fundamental that underlies consumer behavior?

answer

Consumers always make choices with perfect information.

question

Economic efficiency

answer

is a market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production.
MB = MC

question

When is output inefficiently low?

answer

When marginal benefit is greater than marginal cost.
MB > MC

question

Both price floors and price ceilings, when effective (binding), lead to

answer

a decrease in the quantity traded.
Q TRADED DECREASE

question

Because the benefits derived from an activity decline as it is expanded, it is generally

answer

efficient to stop well before perfection is achieved.

question

The principle of opportunity cost is that

answer

the economic cost of using a factor of production is the alternative use of that factor that is given up.

question

The demand by all the consumers of a given good or service is the _______ for the good or service.

answer

market demand

question

Ranchers can raise either cattle or sheep on their land. Which of the following would cause the supply of sheep to increase?

answer

a decrease in the price of cattle

question

Consumers are willing to purchase a product up to the point where

answer

the marginal benefit of consuming a product is equal to its price.
MB = P

question

If policymakers use a pollution tax to control pollution, the tax per unit of pollution should be set

answer

equal to the marginal external cost at the economically efficient level of pollution.
= EXTERNAL MC @ EQUILIBRIUM

question

If the market for a product is broadly defined, then

answer

there are few substitutes for the product and the demand for the product is relatively inelastic.
FEW SUBS, INELASTIC D

question

Suppose a decrease in the supply of bottled water results in a decrease in revenue. This indicates that

answer

the demand for bottled water is elastic in the price range considered.
ELASTIC D

question

In the short run, if marginal product is at its maximum, then

answer

marginal cost is at its minimum

question

The minimum efficient scale is

answer

level of operation where long-run average costs are lowest.

question

Which of the following would cause a decrease in the supply of milk?

answer

an increase in the price of a product that producers sell instead of milk.

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