Economics Quiz

What is the income earned by a firm through selling its product called?

• Explicit Costs

• Implicit Costs

• Revenue

• Economic Profit

What occurs when economic profit is zero?

• Implicit Costs

• Normal Profit

• Fixed Costs

• Variable Costs

What is a resource for which the quantity can vary in the time period under consideration?

• Fixed Resource

• Variable Resource

• Implicit Costs

• Explicit Costs

What is market structure?

• A classification system for markets based on certain characteristics.

• Costs associated with marketing activities.

• The change to total costs from additional units of output.

• A situation where costs decline as output increases.

What advantage do financial economies provide to larger firms?

• They are perceived as less risky borrowers by lenders.

• They can spread advertising costs over a larger output.

• They can buy materials in bulk for better discounts.

• They can divide work tasks for specialization.

How do marketing economies benefit larger firms?

• By spreading advertising costs over a larger output.

• By buying materials in bulk for better discounts.

• By being perceived as less risky borrowers.

• By investing in capital equipment to improve efficiency.

What is a market structure with very high barriers to entry, containing only one firm selling a unique product?

• Oligopoly

• Perfect competition

• Monopoly

• Differentiated product

Which market structure has high barriers to entry and a few large sellers with the majority of the market share?

• Monopoly

• Oligopoly

• Perfect competition

• Price taker

What is a product that is similar to other suppliers but contains distinguishing features or benefits?

• Homogenous product

• Differentiated product

• Monopoly

• Average Revenue

What principle states that firms will maximise their profit if they produce the level of output where marginal cost is equal to marginal revenue?

• Price maker

• Profit maximisation rule

• Barriers to entry

• Oligopoly