Microeconomics

What is primary focus of microeconomics

• The study of government policies

• The study of global trade

• The study of individual units like households and firms

• The study of national economies

What does the term 'opportunity cost' refer to?

• The cost of producing one more unit of a good

• The total cost of production

• The benefit received from consuming an additional unit

• The sacrifice of alternatives when making a choice

Which of following is a factor affecting demand

• Number of firms in the market

• Technological improvement

• Cost of production

• Taste and preferences

What is the law of demand?

• As the price of a commodity increases, the demand decreases

• As the price of a commodity increases, the supply decreases

• As the price of a commodity decreases, the demand decreases

• As the price of a commodity decreases, the supply increases

What is meant by 'elastic demand'

• Demand changes significantly with price changes

• Demand is not affected by price changes

• Demand remains constant regardless of price

• Demand is inversely proportional to supply

What is the law of supply?

• As the price of a commodity decreases, the supply increases

• As the price of a commodity increases, the supply increases

• As the price of a commodity increases, the supply decreases

• As the price of a commodity decreases, the demand increases

Which of the following are factors affecting supply?

• Income levels

• Consumer preferences

• Government subsidies

• Availability of related goods

• Cost of production

What does 'general equilibrium' refer to in economics?

• The balance between imports and exports

• The overall balance in all market of an economy where the supply meets the demand

• Where supply exceeds demand in the market

• Where demand exceeds supply in the market

If oil executives read in newspaper that massive new oil supplies have been discovered under the Pacific Ocean but will likely only be useful in 10 years, what is likely to happen to the supply of oil today?

• The supply of oil will rise today

• The supply of oil will fall today

• There will be no change in the supply of oil

If oil executives read in the newspaper that new solar-power technologies have been discovered but will likely only become useful in 10 years, what is the likely equilibrium impact on the price and quantity of oil today?

• The price of oil will increase, the quantity of oil will decrease

• The price of oil will decrease, the quantity of oil will increase

• The price and quantity of oil will decrease

• The price and quantity of oil will increase