What is the primary focus of microeconomics?

• Economic growth and inflation

• Individual markets and decision-making

• Global trade and exchange rates

• Government spending and taxation

Which of the following is NOT a fundamental economic problem?

• Scarcity

• Choice

• Opportunity cost

• Surplus resources

What does opportunity cost refer to?

• The actual cost of an item

• The next best alternative forgone

• The total revenue of a business

• The money spent on raw materials

The Production Possibilities Curve (PPC) represents:

• Unlimited resources

• The most efficient allocation of resources

• The relationship between supply and demand

• The total production of an economy

A point inside the PPC represents:

• Efficient resource use

• Unattainable production

• Inefficient resource use

• Economic growth

The law of demand states that when price decreases, the quantity demanded:

• Increases

• Decreases

• Stays the same

• Moves unpredictably

A movement along the demand curve is caused by:

• A change in consumer preferences

• A change in the price of the good itself

• A change in consumer income

• A change in the number of buyers

A rightward shift of the demand curve indicates:

• A decrease in demand

• An increase in demand

• A decrease in supply

• An increase in production cost

If two goods are complements, an increase in the price of one will:

• Increase the demand for the other

• Decrease the demand for the other

• Have no effect on the other

• Make both goods more expensive

Market equilibrium occurs when:

• Demand exceeds supply

• Supply exceeds demand

• Quantity demanded equals quantity supplied

• The government controls prices