focuses and scope of micro econ

Question 1

What are the four main market structures in economics?

Answer 1

Perfect competition, monopolistic competition, oligopoly, and monopoly.

Question 2

True or False: In a perfect competition market structure, there are many buyers and sellers.

Answer 2

True

Question 3

Fill in the blank: In a monopoly market structure, there is __________ control over the market.

Answer 3

complete

Question 4

Which market structure is characterized by a few firms dominating the market?

Answer 4

Oligopoly

Question 5

Multiple Choice: In which market structure do firms sell differentiated products?

Answer 5

B) Monopolistic competition

Question 6

what is the core difference between oligopoly and monopolistic competition

Answer 6

moopolistic competition tend to be more competitve. oligopoly have a higher barrier of entry and thus a lot less competitive

Question 7

True or False: Oligopolies can lead to collusion among firms.

Answer 7

True

Question 8

In perfect competition, firms are considered __________.

Answer 8

price takers

Question 9

What is a common outcome of monopolistic competition?

Answer 9

Product differentiation

Question 10

Multiple Choice: Which market structure typically results in the highest prices for consumers?

Answer 10

D) Monopoly

Question 11

What is the definition of utility in consumer behavior?

Answer 11

Utility is a measure of the satisfaction or pleasure that a consumer derives from consuming a good or service.

Question 12

True or False: Marginal utility refers to the additional satisfaction gained from consuming one more unit of a good.

Answer 12

True

Question 13

Fill in the blank: The law of __________ states that as a consumer consumes more of a good, the additional satisfaction from each additional unit tends to decrease.

Answer 13

diminishing marginal utility

Question 14

when measuring the utility between two goods and the consumer vaules both the same, what is it called on a graph?

Answer 14

Indifference curve

Question 15

What does the concept of ‘consumer surplus’ represent?

Answer 15

Consumer surplus represents the difference between what consumers are willing to pay for a good and what they actually pay.

Question 16

what is a substitute?

Answer 16

Substitutes are goods that can replace each other.

Question 17

if the price of A goes up, and more of B is bought. what is their relation?

Answer 17

substitute

Question 18

if the price of A goes up, and less of B is bought. what is their relation?

Answer 18

complaiments

Question 19

what is production?

Answer 19

the process of turning inputs (resources) into outputs (products)

Question 20

what are the 5 costs of production?

Answer 20

FIxed cost, variable cost, total cost, average cost, marginal cost

Question 21

what is fixed cost?

Answer 21

the fixed expensess such as rent

Question 22

what is variable cost?

Answer 22

costs that change with output like wages

Question 23

what is total cost?

Answer 23

Variable+fixed cost

Question 24

what is average cost?

Answer 24

total cost over quantity produced

Question 25

what is marginal cost?

Answer 25

the cost to produce one more unit

Question 26

What is market equilibrium?

Answer 26

Market equilibrium is the point where the quantity supplied equals the quantity demanded at a particular price.

Question 27

What happens if the price is above the equilibrium price?

Answer 27

If the price is above equilibrium, a surplus occurs because quantity supplied exceeds quantity demanded.

Question 28

What happens if the price is below the equilibrium price?

Answer 28

if the price is below equilibrium, a shortage occurs because quantity demanded exceeds quantity supplied.

Question 29

What is disequilibrium?

Answer 29

Disequilibrium occurs when the market is not in balance, meaning the quantity supplied does not equal the quantity demanded

Question 30

What is a price ceiling?

Answer 30

A price ceiling is a maximum price set by the government, which is below the equilibrium price, creating a shortage.

Question 31

What is a price floor?

Answer 31

A price floor is a minimum price set by the government, which is above the equilibrium price, creating a surplus.

Question 32

How does a shift in demand affect equilibrium?

Answer 32

If demand increases, equilibrium price and quantity both rise. If demand decreases, equilibrium price and quantity both fall.

Question 33

How does a shift in supply affect equilibrium?

Answer 33

if supply increases, equilibrium price falls and quantity rises. If supply decreases, equilibrium price rises and quantity falls.

Question 34

What is the relationship between equilibrium price and the market clearing price?

Answer 34

The equilibrium price is the market clearing price, where the quantity demanded equals the quantity supplied.

Question 35

How do government interventions like price floors and ceilings impact equilibrium?

Answer 35

Price floors and ceilings prevent the market from reaching equilibrium, causing either surpluses (floor) or shortages (ceiling).

Question 36

when quantity supplied is greater than quantity demand that means?

Answer 36

there is a surplus

Question 37

when quantity demanded is greater than quantity supplied it results in?

Answer 37

a shortage

Question 38

how do producers deal with surplus?

Answer 38

they sell for lower to shake off the excess

Question 39

how do producers deal with shortages?

Answer 39

they sell each unit for a higher price to break a profit

Question 40

what is a price ceiling?

Answer 40

the maximum a unit could be sold for

Question 41

what is a price floor

Answer 41

the minimum a unit could be sold for