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 85 of 88
- A. moves down to the right
- B. moves up to the left
- C. moves up to the right
- D. moves down to the left
Explanation: On the usual graph, a positive relationship means both variables rise together, so the line slopes upward from left to right.
Correct answer: moves up to the right- A. they suggest relationships for explanation, allow testing of hypotheses
- B. they can be used for tables, they can be graphed
- C. they can be used in computers governments use them
- D. they provide interesting information can be summarized
Explanation: Economic data help economists identify relationships between variables and test whether hypotheses are supported by evidence.
Correct answer: they suggest relationships for explanation, allow testing of hypotheses- A. no more of the activity.
- B. less of the activity
- C. more of the activity
- D. more or less, depending on the benefits of other activities
Explanation: When marginal benefit exceeds marginal cost, the additional unit provides more benefit than sacrifice, so a rational person should…
Correct answer: more of the activity1684. In a free market?
- A. government intervenes
- B. government plan production
- C. government interferes
- D. Prices adjust to reconcile scarcity and desires
Explanation: In a free market, prices change in response to shortages, surpluses, and consumer demand.
Correct answer: Prices adjust to reconcile scarcity and desires- A. the time lost in finding it
- B. the quantity of other goods sacrificed to get another unit of that good
- C. the expenditure on the good
- D. the loss of interest in using savings
Explanation: Opportunity cost is the value of the best alternative forgone, commonly expressed as the quantity of another good sacrificed to obtain one…
Correct answer: the quantity of other goods sacrificed to get another unit of that good- A. improving the education of workers
- B. raising union wages.
- C. raising minimum wages.
- D. restricting trade with foreign countries.
Explanation: Education and training can improve workers’ skills, enabling them to produce more output per unit of labour.
Correct answer: improving the education of workers- A. Rs 300
- B. Rs 1000
- C. Rs 500
- D. Rs 800
Explanation: The Rs 1,000 already spent is a sunk cost and should not affect the decision.
Correct answer: Rs 800- A. Subaru's impact on the price f cars
- B. a farmer's impact on the price of corn
- C. Microsoft's impact on the price of desktop operating systems
- D. a student's impact on college tuition
Explanation: Microsoft historically dominated desktop operating systems, so it could influence prices more than a Subaru manufacturer, an individual…
Correct answer: Microsoft's impact on the price of desktop operating systems- A. A student eats a hamburger in the student union.
- B. A student reads a novel for pleasure
- C. A student sits at home and watches T.V
- D. A student has a party in her room in the student hall of residence.
Explanation: A party can impose noise, disturbance, or other costs on nearby residents who are not part of the transaction, creating a negative…
Correct answer: A student has a party in her room in the student hall of residence.- A. Taking a nap
- B. All of these answers involve trade-offs
- C. Watching a football game on Saturday afternoon
- D. Going to university
Explanation: Each activity uses scarce time that could have been devoted to another valuable activity, so each has an opportunity cost.
Correct answer: All of these answers involve trade-offs- A. Consumers
- B. voters
- C. government
- D. Workers
Explanation: In a command economy, a central authority makes the major decisions about what to produce, how to produce it, and for whom.
Correct answer: government- A. capital consumption frontier.
- B. Lorenz curve.
- C. Circular-flow diagram.
- D. Production possibility curve.
Explanation: A production possibility curve shows the maximum combinations of two goods or services that can be produced when available resources are…
Correct answer: Production possibility curve.- A. is relevant only for a capitalist economy like the United States.
- B. Suggests a major increase in public health care spending means an expansion in other areas will be harder to achieve.
- C. Suggests all our wants can be achieved.
- D. Would be relevant if we eliminated poverty
Explanation: Opportunity cost means that choosing one use of scarce resources sacrifices the next-best alternative.
Correct answer: Suggests a major increase in public health care spending means an expansion in other areas will be harder to achieve.- A. The free provision of products
- B. The Subsidizing of products by the government
- C. Market forces of supply and demand
- D. All trade via barter
Explanation: A free market allocates resources mainly through the interaction of supply and demand, with prices coordinating buyers and sellers.
Correct answer: Market forces of supply and demand- A. What to produce
- B. Who to produce for
- C. How to produce
- D. How to maximize economic growth
Explanation: The basic economic questions are what to produce, how to produce and for whom to produce.
Correct answer: How to maximize economic growth- A. Always fixed
- B. Limited
- C. Unlimited
- D. Likely to decrease over time
Explanation: Human wants are unlimited, while the resources available to satisfy them are scarce.
Correct answer: Unlimited- A. Alternative
- B. Opportunity cost
- C. Consumer cost
- D. Producer cost
Explanation: Opportunity cost is the value of the next-best alternative sacrificed when a choice is made.
Correct answer: Opportunity cost- A. Are always found
- B. Can never decease
- C. Always increase over time
- D. Are limited at any moment in time
Explanation: Scarcity is the basic economic problem: available resources are insufficient to satisfy all human wants at a given time.
Correct answer: Are limited at any moment in time- A. irrational behavior
- B. a lazy person
- C. marginal benefit-marginal cost analysis
- D. programmed learning
Explanation: Asim compares the extra benefit of using the open door with the extra cost of opening the closed one, then chooses the lower-cost option.
Correct answer: marginal benefit-marginal cost analysis- A. is a reality that underlies economic behavior
- B. has the same meaning as selfishness
- C. is more characteristic of men than of women
- D. is usually self-defeating
Explanation: Economic self-interest means that people generally make choices they expect will improve their own welfare, and it is a foundation for…
Correct answer: is a reality that underlies economic behavior