Micro Economics

The demand curve for a normal good slopes downward because of:

In the short run, a firm's total cost is the sum of:

• Fixed cost and variable cost
  

• Marginal cost and variable cost

• Total revenue and marginal cost

• Variable cost and marginal revenue

A firm’s supply curve in the short run is its:

What happens to the supply curve when production costs increase?

• It shifts to the left
  

• It shifts to the right

• It remains unchanged

• It becomes vertical

Which of the following factors can cause a shift in the demand curve for a luxury good?

• Changes in the price of substitutes

• All of the above

• Changes in consumer income
  
  

• Changes in consumer preferences

In the long run, a firm can adjust all of its inputs, which means:

• It can change its production capacity
  

• It can only change variable costs

• It cannot change fixed costs

• It must operate at minimum average cost

What is the primary reason a firm may experience diminishing returns in the short run?

• Increased market competition

• Limited variable inputs

• Increased fixed costs
  

• Higher average total costs

How does an increase in consumer income typically affect the demand for inferior goods?

• It has no effect

• It decreases demand

• It increases demand
  

• It makes demand more elastic

Which of the following best describes the relationship between price and quantity supplied?

• They are directly related

• They are dependent on consumer preferences

• They are unrelated

• They are inversely related
  

• 10

• 20

• 30

• 40