Chapter MCQ Test 2 — Introduction to Microeconomics
10 Questions • 12 min • Chapter MCQ
12:00
Question 1 of 10
Deciding the price of a single product, like a cup of tea, is a matter for:
Microeconomics
Macroeconomics
Normative economics
National income accounting
Explanation: The price of one product is an individual-unit issue — microeconomics.
Question 2 of 10
A farmer uses his only field to grow wheat instead of rice. The opportunity cost of the wheat is:
The rice he could have grown
The money he spent on seeds
Nothing
The wheat itself
Explanation: Opportunity cost is the next-best alternative foregone — the rice crop given up.
Question 3 of 10
If an economy moves from a point inside the PPC to a point on the PPC, it has:
Used its idle resources, raising output
Reduced its resources
Become unattainable
Shifted the curve left
Explanation: Moving to the frontier means previously idle resources are now fully employed, increasing output.
Question 4 of 10
The PPC is concave to the origin because, as more of one good is produced, the opportunity cost:
Rises (increasing opportunity cost)
Stays constant
Falls to zero
Disappears
Explanation: Resources are not equally suited to both goods, so each extra unit costs more of the other — increasing opportunity cost gives the concave shape.
Question 5 of 10
Which pair of statements is positive then normative?
'Unemployment rose to 8%' ; 'The government should create more jobs'
'The government should act' ; 'Unemployment rose'
Both are positive
Both are normative
Explanation: The first reports a measurable fact (positive); the second gives a value judgement (normative).
Question 6 of 10
A new invention that makes all factories more productive will shift the PPC:
Outward to the right
Inward to the left
It will not move
Straight down
Explanation: Better technology expands what the economy can produce, shifting the PPC outward.
Question 7 of 10
The problem 'for whom to produce' is essentially about the:
Distribution of output among people
Choice of technique
Choice of goods
Price level
Explanation: 'For whom' concerns how the produced goods are shared among members of society.
Question 8 of 10
During a recession with many unemployed workers, the economy is most likely producing at a point:
Inside the PPC
On the PPC
Outside the PPC
At the origin only
Explanation: Unemployment means resources are idle, so output lies inside (below) the frontier.
Question 9 of 10
Choosing a labour-intensive method over a machine-intensive one answers which central problem?
How to produce
What to produce
For whom to produce
When to produce
Explanation: The method/technique of production answers 'how to produce'.
Question 10 of 10
If wants could somehow be fully satisfied with available resources, the basic economic problem would:
Disappear, since there would be no scarcity
Get worse
Stay the same
Become macroeconomic
Explanation: No scarcity would mean no need to choose — the economic problem itself would vanish.