Free Microeconomics MCQs with Answers
1,742 Microeconomics MCQs from Economics, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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1,742 questions · page 57 of 88
- A. an import tariffs
- B. a tariff rate quota
- C. a selective quota
- D. a global quota
Explanation: A global quota limits the total quantity imported from all countries without assigning shares to particular countries or importers.
Correct answer: a global quota- A. The within-quota tariff rate exceeds the over-quota tariff rate
- B. the over-quota tariff rate exceeds the with-quota tariff rate
- C. The within-quota tariff rate equals the over-quota tariff rate
- D. The within-quota tariff rate plus over-quota tariff rate equal 100 percent
Explanation: A tariff-rate quota applies a lower tariff to imports within the allowed quantity and a higher tariff once that quantity is exceeded.
Correct answer: the over-quota tariff rate exceeds the with-quota tariff rate1123. Buy national policies ?
- A. result in government purchase policies favoring domestic over foreign producers
- B. result in government purchase policies favoring foreign over domestic producers
- C. attempt to restrict the number of tourists leaving a nation
- D. are intended to publicize the advantage of the most efficient domestic companies
Explanation: Buy-national policies direct government procurement toward domestically produced goods even when foreign suppliers may offer lower prices…
Correct answer: result in government purchase policies favoring domestic over foreign producers- A. export quotas imposed by the Japanese government
- B. export tariffs imposed by the Japanese's government
- C. import quotas imposed by the U.S government
- D. domestic subsidies granted by the U.S government
Explanation: During 1981–1984, Japan restricted its automobile exports to the United States through a voluntary export restraint, which functioned as…
Correct answer: export quotas imposed by the Japanese government- A. sporadic dumping
- B. predatory dumping
- C. persistent dumping
- D. foreign dumping
Explanation: Sporadic dumping occurs when firms sell temporary excess inventory abroad, often caused by unexpected changes in domestic supply or…
Correct answer: sporadic dumping- A. Predatory dumping
- B. sporadic dumping
- C. persistent dumping
- D. year end dumping
Explanation: Sporadic dumping is associated with recessions or excess inventories, because firms dispose of surplus goods in foreign markets rather…
Correct answer: sporadic dumping- A. two tier tariff applied to a country's imports
- B. three-tier tariff applied to a country's imports
- C. two tier quota applied to a county's exports
- D. three tier quota applied to a country's exports
Explanation: A tariff-rate quota applies a low tariff up to a specified import quantity and a higher tariff to imports beyond that quantity.
Correct answer: two tier tariff applied to a country's imports- A. domestic content laws
- B. government procurement policies
- C. health, safety, and environmental standards
- D. antidumping/countervailing duties applied to imports
Explanation: Domestic-content rules, procurement restrictions, and product standards can restrict trade without directly imposing tariffs.
Correct answer: antidumping/countervailing duties applied to imports- A. export quota
- B. embargo
- C. auction quota
- D. tariff quota
Explanation: Under an export quota, the exporting country restricts the quantity shipped abroad, and foreign exporters may hold the valuable quota…
Correct answer: export quota- A. quota licenses are given to foreign exporting companies
- B. quota licenses are auctioned to the highest bidding importing company
- C. if quota licenses are given to domestic consumers of the good
- D. Both A and C
Explanation: Quota restrictions create quota rents because importers can buy goods at the lower world price and sell them at the higher domestic price.
Correct answer: quota licenses are auctioned to the highest bidding importing company- A. who has the quota license
- B. the size of the quota
- C. elasticities of domestic demand and supply
- D. All of the above
Explanation: Quota welfare effects depend on the quota's size, the demand and supply elasticities, and who receives the quota rents.
Correct answer: All of the above- A. embargoes
- B. voluntary export restraints
- C. nontariff barriers
- D. orderly marketing agreements
Explanation: An embargo is a complete prohibition on trade in a good or with a country, so it represents a quota of zero.
Correct answer: embargoes- A. Orderly marketing
- B. trigger pricing
- C. domestic content pricing
- D. dumping
Explanation: Selling goods abroad at prices below those charged in the home market is price discrimination known as dumping.
Correct answer: dumping- A. always
- B. often
- C. seldom
- D. never
Explanation: Governments seldom auction quota licenses; they commonly allocate them administratively or grant them to domestic firms.
Correct answer: seldom1135. To maintain that South koreans are dumping their DVDs in the United States is to maintain that ?
- A. Koreans are selling DVDs in the U.S below their production cost
- B. Koreans are selling DVDs is the U.s above their productions cost
- C. The cost of manufacturing DVDs in Korea is lower in Korea than in the U.S since wages are lower in Korea
- D. The cost of manufacturing DVDs in Korea is higher in Korea than in the U.S since wages are higher in Korea
Explanation: Dumping means selling a product in a foreign market at an unfairly low price, commonly defined in basic trade analysis as below its…
Correct answer: Koreans are selling DVDs in the U.S below their production cost- A. domestic producers of the imported good being harmed
- B. domestic consumers of the imported good being harmed
- C. Prices increasing in the importing country
- D. Prices falling in the exporting country
Explanation: An import quota restricts foreign supply, raising the domestic price and benefiting protected domestic producers while harming consumers.
Correct answer: domestic producers of the imported good being harmed- A. foreign corporations
- B. foreign workers
- C. domestic corporations
- D. The domestic government
Explanation: When import licences are auctioned competitively, the scarcity rent is captured by whoever sells the licences.
Correct answer: The domestic government- A. is less restrictive on a country's imports than a tariff
- B. Is more restrictive on a country's imports than a tariff
- C. has the same restrictive effect on a country's imports as a tariff
- D. will always generate increased tax revenue for the government
Explanation: A quota fixes the physical quantity of imports, so it becomes more restrictive as domestic demand grows and pushes up the domestic price.
Correct answer: Is more restrictive on a country's imports than a tariff- A. increase, increase
- B. increase, decrease
- C. decrease, increase
- D. decrease, decrease
Explanation: A binding quota reduces imports and raises Norway's domestic price relative to free trade.
Correct answer: decrease, increase- A. offset the margin of dumping
- B. punish domestic consumers for buying high-priced imported goods
- C. discourage foreign governments from subsidizing their exporters
- D. reduce the tariff revenue of the domestic government
Explanation: An antidumping duty is set to offset the dumping margin, typically the difference between the foreign product's normal value and its…
Correct answer: offset the margin of dumping