Microeconomics MCQs


Microeconomics MCQs with Answers


What is the definition of microeconomics?
a. The study of the economy as a whole
b. The study of individual economic agents and their interactions
c. The study of government policies and their effects on the economy
d. The study of international trade and exchange rates
Answer: b. The study of individual economic agents and their interactions


What is the law of supply?
a. The higher the price, the less people are willing to buy a good or service
b. The lower the price, the more people are willing to buy a good or service
c. The higher the price, the more firms are willing to supply a good or service
d. The lower the price, the less firms are willing to supply a good or service
Answer: c. The higher the price, the more firms are willing to supply a good or service


What is the difference between a normal good and an inferior good?
a. Normal goods are always more expensive than inferior goods
b. Normal goods are those that people buy more of when their income increases, while inferior goods are those that people buy less of when their income increases
c. Inferior goods are always of lower quality than normal goods
d. Normal goods are those that people buy less of when their income increases, while inferior goods are those that people buy more of when their income increases
Answer: b. Normal goods are those that people buy more of when their income increases, while inferior goods are those that people buy less of when their income increases


Microeconomics MCQs for Lecturer Economics

What is the difference between a monopoly and a perfectly competitive market?
a. In a monopoly, there is only one seller, while in a perfectly competitive market, there are many sellers
b. In a monopoly, there is only one buyer, while in a perfectly competitive market, there are many buyers
c. In a monopoly, there are no barriers to entry, while in a perfectly competitive market, there are high barriers to entry
d. In a monopoly, the seller has complete control over the price, while in a perfectly competitive market, the price is set by the market
Answer: a. In a monopoly, there is only one seller, while in a perfectly competitive market, there are many sellers


What is the difference between explicit costs and implicit costs?
a. Explicit costs are those that require a monetary payment, while implicit costs do not require a monetary payment
b. Explicit costs are those that are incurred in the short run, while implicit costs are incurred in the long run
c. Explicit costs are those that are incurred by firms, while implicit costs are incurred by individuals
d. Explicit costs are those that are easy to calculate, while implicit costs are difficult to calculate
Answer: a. Explicit costs are those that require a monetary payment, while implicit costs do not require a monetary payment


What is the difference between a price floor and a price ceiling?
a. A price floor is a legal minimum price for a good or service, while a price ceiling is a legal maximum price
b. A price floor is a legal maximum price for a good or service, while a price ceiling is a legal minimum price
c. A price floor is set by the market, while a price ceiling is set by the government
d. A price ceiling is set by the market, while a price floor is set by the government
Answer: a. A price floor is a legal minimum price for a good or service, while a price ceiling is a legal maximum price


Microeconomics MCQs Past Paper MCQs

What is the law of demand?
a. The higher the price, the less people are willing to buy a good or service
b. The lower the price, the more people are willing to buy a good or service
c. The higher the price, the more firms are willing to supply a good or service
d. The lower the price, the less firms are willing to supply a good or service
Answer: b. The lower the price, the more people are willing to buy a good or service


What is the difference between a positive and a normative statement?
a. A positive statement is a statement of fact, while a normative statement is a statement of opinion
b. A positive statement is a statement of opinion, while a normative statement is a statement of fact
c. A positive statement is a statement about what ought to be, while a normative statement is a statement about what is
d. A positive statement is a statement about the future, while a normative statement is a statement about the past
Answer: a. A positive statement is a statement of fact, while a normative statement is a statement of opinion


Microeconomics MCQs for FPSC Economics Tests

What is the difference between a fixed cost and a variable cost?
a. A fixed cost is a cost that does not change with the level of output, while a variable cost is a cost that changes with the level of output
b. A fixed cost is a cost that changes with the level of output, while a variable cost is a cost that does not change with the level of output
c. A fixed cost is a short-term cost, while a variable cost is a long-term cost
d. A fixed cost is a cost that is easy to calculate, while a variable cost is difficult to calculate
Answer: a. A fixed cost is a cost that does not change with the level of output, while a variable cost is a cost that changes with the level of output


What is the difference between a private good and a public good?
a. Private goods are provided by the government, while public goods are provided by private companies
b. Private goods are excludable and rival, while public goods are non-excludable and non-rival
c. Private goods are non-excludable and non-rival, while public goods are excludable and rival
d. Private goods are non-rival, while public goods are rival
Answer: b. Private goods are excludable and rival, while public goods are non-excludable and non-rival


Microeconomics MCQs for KPPSC, PPSC, SPSC

What is the difference between marginal cost and average cost?
a. Marginal cost is the cost of producing one more unit of output, while average cost is the total cost divided by the total output
b. Marginal cost is the total cost divided by the total output, while average cost is the cost of producing one more unit of output
c. Marginal cost is a long-term cost, while average cost is a short-term cost
d. Marginal cost is a variable cost, while average cost is a fixed cost


What is the difference between perfect competition and monopolistic competition?
a. Perfect competition has many buyers and many sellers, while monopolistic competition has many buyers but few sellers
b. Perfect competition has few buyers but many sellers, while monopolistic competition has many buyers and few sellers
c. Perfect competition has identical products, while monopolistic competition has differentiated products
d. Perfect competition is a market structure with only one seller, while monopolistic competition is a market structure with only one buyer
Answer: c. Perfect competition has identical products, while monopolistic competition has differentiated products


Microeconomics MCQs ETEA, PTS, NTS, ATS

What is the difference between a normal good and an inferior good?
a. A normal good is a good that people buy more of when their income increases, while an inferior good is a good that people buy less of when their income increases
b. A normal good is a good that people buy less of when their income increases, while an inferior good is a good that people buy more of when their income increases
c. A normal good is a luxury good, while an inferior good is a necessity
d. A normal good is always more expensive than an inferior good
Answer: a. A normal good is a good that people buy more of when their income increases, while an inferior good is a good that people buy less of when their income increases


What is the difference between a firm’s total revenue and its profit?
a. Total revenue is the amount of money a firm makes from selling its products, while profit is the difference between total revenue and total cost
b. Total revenue is the difference between total cost and total profit, while profit is the amount of money a firm makes from selling its products
c. Total revenue is the amount of money a firm makes from selling its products minus its fixed costs, while profit is the amount of money a firm makes from selling its products minus all its costs
d. Total revenue is the amount of money a firm makes from selling its products plus its fixed costs, while profit is the amount of money a firm makes from selling its products minus its variable costs
Answer: a. Total revenue is the amount of money a firm makes from selling its products, while profit is the difference between total revenue and total cost


Microeconomics MCQs

What is the difference between a perfectly elastic demand curve and a perfectly inelastic demand curve?
a. A perfectly elastic demand curve is a demand curve that is horizontal, while a perfectly inelastic demand curve is a demand curve that is vertical
b. A perfectly elastic demand curve is a demand curve that is vertical, while a perfectly inelastic demand curve is a demand curve that is horizontal
c. A perfectly elastic demand curve is a demand curve that is steep, while a perfectly inelastic demand curve is a demand curve that is flat
d. A perfectly elastic demand curve is a demand curve that is flat, while a perfectly inelastic demand curve is a demand curve that is steep
Answer: a. A perfectly elastic demand curve is a demand curve that is horizontal,


What is the difference between a price floor and a price ceiling?
a. A price floor is a minimum price set by the government, while a price ceiling is a maximum price set by the government
b. A price floor is a maximum price set by the government, while a price ceiling is a minimum price set by the government
c. A price floor is a price set by the market, while a price ceiling is a price set by the government
d. A price floor and a price ceiling are the same thing
Answer: a. A price floor is a minimum price set by the government, while a price ceiling is a maximum price set by the government


Microeconomics MCQs

What is the difference between a positive externality and a negative externality?
a. A positive externality is a cost that is borne by a third party, while a negative externality is a benefit that is received by a third party
b. A positive externality is a benefit that is received by a third party, while a negative externality is a cost that is borne by a third party
c. A positive externality is a cost that is borne by the producer, while a negative externality is a benefit that is received by the producer
d. A positive externality is a benefit that is received by the producer, while a negative externality is a cost that is borne by the producer
Answer: b. A positive externality is a benefit that is received by a third party, while a negative externality is a cost that is borne by a third party


Microeconomics MCQs

What is the difference between a budget deficit and a national debt?
a. A budget deficit is the amount by which government spending exceeds government revenue in a single year, while a national debt is the total amount of money that a government owes
b. A budget deficit is the total amount of money that a government owes, while a national debt is the amount by which government spending exceeds government revenue in a single year
c. A budget deficit is the total amount of money that a government spends, while a national debt is the total amount of money that a government collects in taxes
d. A budget deficit and a national debt are the same thing
Answer: a. A budget deficit is the amount by which government spending exceeds government revenue in a single year, while a national debt is the total amount of money that a government owes


What is the difference between a public good and a private good?
a. A public good is a good that is provided by the government, while a private good is a good that is provided by a private company
b. A public good is a good that is non-rival and non-excludable, while a private good is a good that is rival and excludable
c. A public good is a good that is provided for free, while a private good is a good that is sold in the market
d. A public good is a good that is provided to individuals, while a private good is a good that is provided to the society
Answer: b. A public good is a good that is non-rival and non-excludable, while a private good is a good that is rival and excludable


Microeconomics MCQs

What is the difference between a monopoly and a perfectly competitive market?
a. A monopoly is a market with only one seller, while a perfectly competitive market is a market with many sellers
b. A monopoly is a market with many buyers, while a perfectly competitive market is a market with only one buyer
c. A monopoly is a market with no government intervention, while a perfectly competitive market is a market with government intervention
d. A monopoly and a perfectly competitive market are the same thing
Answer: a. A monopoly is a market with only one seller, while a perfectly competitive market is a market with many sellers


What is the difference between a normal good and an inferior good?
a. A normal good is a good for which demand increases as income increases, while an inferior good is a good for which demand decreases as income increases
b. A normal good is a good for which demand decreases as income increases, while an inferior good is a good for which demand increases as income increases
c. A normal good is a luxury good, while an inferior good is a necessity good
d. A normal good and an inferior good are the same thing
Answer: a. A normal good is a good for which demand increases as income increases, while an inferior good is a good for which demand decreases as income increases


Microeconomics MCQs

What is the difference between a short-run and a long-run in microeconomics?
a. The short-run is a period of time in which all inputs are fixed, while the long-run is a period of time in which some inputs can be varied
b. The short-run is a period of time in which some inputs can be varied, while the long-run is a period of time in which all inputs are fixed
c. The short-run is a period of time in which the market is not in equilibrium, while the long-run is a period of time in which the market is in equilibrium
d. The short-run and the long-run are the same thing
Answer: a. The short run is a period of time in which all inputs are fixed, while the long-run is a period of time in which some inputs can be varied


What is the difference between elasticity and inelasticity in microeconomics?
a. Elasticity refers to the degree of responsiveness of quantity demanded or supplied to changes in price, while inelasticity refers to the degree of unresponsiveness of quantity demanded or supplied to changes in price
b. Elasticity refers to the degree of unresponsiveness of quantity demanded or supplied to changes in price, while inelasticity refers to the degree of responsiveness of quantity demanded or supplied to changes in price
c. Elasticity refers to the degree of responsiveness of price to changes in quantity demanded or supplied, while inelasticity refers to the degree of unresponsiveness of price to changes in quantity demanded or supplied
d. Elasticity and inelasticity are the same thing
Answer: a. Elasticity refers to the degree of responsiveness of quantity demanded or supplied to changes in price, while inelasticity refers to the degree of unresponsiveness of quantity demanded or supplied to changes in price


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