Online Test — Introduction to Microeconomics
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
The branch of economics that studies individual units (a firm, a market) is:
Macroeconomics
Microeconomics
Statistics
Normative economics
Explanation: Microeconomics studies individual units.
Question 2 of 15
The study of national income and total employment belongs to:
Microeconomics
Macroeconomics
Price theory
Statistics
Explanation: Economy-wide aggregates are studied in macroeconomics.
Question 3 of 15
Microeconomics is also called:
Income theory
Price theory
Growth theory
Trade theory
Explanation: Microeconomics is also known as price theory.
Question 4 of 15
A statement of 'what is' that can be tested as true or false is:
Positive economics
Normative economics
Macroeconomics
An opinion
Explanation: Positive economics deals with testable facts.
Question 5 of 15
'The rich should be taxed more' is a ____ statement.
Positive
Normative
Factual
Statistical
Explanation: It is a value judgement — normative economics.
Question 6 of 15
The root of all economic problems is:
Scarcity
Money
Government
Banks
Explanation: Scarcity (unlimited wants, limited resources) is the root cause.
Question 7 of 15
Economics is often called the science of:
Money
Choice
Numbers
Trade
Explanation: Because scarcity forces choices, economics is the science of choice.
Question 8 of 15
Opportunity cost is the value of the:
Chosen good
Next-best alternative foregone
Cheapest good
Sum of all options
Explanation: It is the next-best alternative given up.
Question 9 of 15
Which is NOT one of the three central problems of an economy?
What to produce
How to produce
For whom to produce
When to retire
Explanation: The three problems are what, how and for whom to produce.
Question 10 of 15
'How to produce' refers to the choice of:
Technique/method of production
Who gets the goods
Which goods to make
The price level
Explanation: 'How to produce' is about the technique (labour vs machine intensive).
Question 11 of 15
The PPC shows combinations of two goods produced using resources:
Partly
Fully and efficiently
Wastefully
Not at all
Explanation: The PPC assumes full and efficient use of resources.
Question 12 of 15
The PPC slopes downward because:
Resources are unlimited
More of one good means less of the other
Prices rise
Technology is fixed forever
Explanation: Limited resources create a trade-off (opportunity cost).
Question 13 of 15
A point inside the PPC shows:
Efficiency
Under-utilisation of resources
Unattainable output
Maximum output
Explanation: Inside the PPC means resources are not fully/efficiently used.
Question 14 of 15
A point outside the PPC is:
Efficient
Unattainable with current resources
Inefficient
On the frontier
Explanation: Beyond the PPC is unattainable with current resources/technology.
Question 15 of 15
Economic growth shifts the PPC:
Leftward (inward)
Rightward (outward)
Downward only
It cannot shift
Explanation: Growth (more/better resources) shifts the PPC outward to the right.