MULTIPLE CHOICE QUESTIONS
MICROECONOMICS
1. Suppose the supply for product A is perfectly elastic. If the demand for this product increases:
A. the equilibrium price and quantity will increase;
B. the equilibrium price and quantity will decrease;
C. the equilibrium quantity will increase but the price will not change;
D. the equilibrium price will increase but the quantity will not change.
2. If the coefficient of income elasticity of demand is higher than 1 and the revenue increases, the
share of expenditures for commodity X in total expenditure:
A. will increase;
B. will decrease;
C. will remain constant;
D. can not be determined.
3. If the demand for agricultural products is inelastic:
A. as the prices decrease, the revenues earned by producers increase;
B. as the prices decrease, the revenues earned by producers decrease;
C. rising prices do not lead to differentiation in producers' incomes;
D. the percentage decrease in prices is lower than the percentage increase in demand.
4. For a rational consumer who has to choose between two goods in the context of budget constraints,
the price change of one of the goods, caeteris paribus, will determine:
A. a parallel shift of the budget line to the left;
B. a change in the slope of the budget line;
C. no change in the budget line;
D. a parallel shift of budget line to the right.
5. The price of the product A was reduced from 100 to 90 lei and, as a result, the quantity demanded
has increased from 70 to 75 units. The demand is:
A. inelastic;
B. elastic;
C. unit elastic;
D. can not be determined from the given information.
6. Choose the false statement:
A. in general, the demand for necessity goods is less elastic than demand for luxury goods;
B. if the price and the producers` income are directly proportional, the demand is elastic;
C. after a long period of time since the change in the price of the good A, supply
becomes more elastic;
B. for a company whose production process involves making two goods, one main and the
other secondary, if the price of the main good increases, - caeteris paribus - the supply on
the secondary good`s market will increase (and vice versa).
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7. If the demand curve for product A moves to the right, and the price of product B decreases, it can be
concluded that:
A. A and B are substitute goods;
B. A and B are complementary goods;
C. A is an inferior good, and B is a superior good;
D. Both goods A and B are inferior.
8. Suppose the price of a good decreases by 10% and the quantity demanded for a certain period of time
increases by 15%. In these conditions:
A. the revenues earned by producers decrease;
B. the revenues earned by producers increase;
C. the revenues are not influenced in any way;
D. the company's expenses rise.
9. If a price increase of 50% results in an increase in the quantity supplyed of an economic good from
10 to 20 pieces, calculate the coefficient of price elasticity of supply.
A. ¼. B. ½; C. 1; D. 2.
10. The total utility coincides with the marginal utility:
A. for the first unit consumed;
B. only for the irrational consumer;
C. at the level of the last unit consumed;
D. at the saturation point.
11. The indifference curve means:
A. equal consumption of two goods;
B. equal utility from the consumption of two combinations of goods;
C. equal consumer income;
D. equal prices of the goods consumed.
12. The points located at the intersection of the budget line with the coordinate axes mean:
A. the consumer does not spend all his income;
B. the consumer spends all his income for only one good;
C. the consumer spends absolutely nothing;
D. these are points impossible to reach by the consumer.
13. An economic agent contracts a loan of 15.000 lei, which he will repay in three equal annual
installments. What will be the total interest paid, knowing that the annual interest rate is 12%
per year?
A. 3.600 lei;
B. 1.800 lei;
C. 5.400 lei;
D. 1.500 lei.
14. An economic agent makes a bank deposit of 10.000 lei with an interest rate of 5%. What will be the
amount in the bank after 2 years, if the economic agent does not make withdrawals from the account
created during this period?
A. 11.000 lei;
B. 1.000 lei;
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C. 11.025 lei;
D. 500 lei.
15. Which of the following statements are false?
A. information, the entrepreneur's ability, technical progress are neo-factors of production;
B. according to the stages of the circular flow of the company's capital, it takes three forms:
money, capital goods and commodity;
C. fixed capital depreciation is only due to physical deterioration;
D. the factors of production are resources attracted and used in economic activity.
16. Which of the following aspects distinguish fixed capital from working capital:
a. the number of cycles of production they participate in;
b. the location of the production activity;
c. the period of time after which they are replaced;
d. the way they transmit their value to the new product.
A (a,d) B (c,d) C (a,c,d) D (b,c,d)
17. The following data is given for a company: material costs 89 mil; working capital 45 mil; indirect
salaries 10 mil; fixed costs 90 mil.; variable costs 52 mil. Calculate fixed material costs and
depreciation:
A. 60 and 64; B. 70 and 56; C. 80 and 44; D. 89 and 45.
18. Fixed cost includes:
a. expenditures for the salaries of the administrative staff;
b. expenditure for depreciation of fixed capital;
c. energy costs for manufacturing;
d. expenditure for general lighting.
A. (a,b,c) B. (a,b,d) C. (a,c,d) D. (b,c,d)
19. When production volume is zero:
a. the fixed cost is 0;
b. the variable cost is 0;
c. the fixed cost is higher than the variable cost;
d. the variable cost is higher than the fixed cost.
A (a,b,c) B (b,c,d) C (b,c) D (a,d)
20. Calculate the average fixed cost (AFC), for a level of production Q = 20, knowing that the total cost
function is: TC = 200 + 3Q + 2Q2.
A. 1060;
B. 200;
C. 20;
D. 10.
21. Which of the following statements is false:
A. perfect competition involves many sellers of standardized products;
B. monopolistic competition involves many sellers of homogeneous products;
C. the oligopoly involves several producers of standardized or differentiated products;
D. monopoly involves a single product for which there are no close substitutes.
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22. On the market with perfect competition:
A. the firm is a "price-taker," meaning, it takes over the market price;
B. the firm is a "price-maker", meaning, it determines the market price;
C. the companies’ products are differentiated;
D. input barriers are minimal, and exit barriers are maximal.
23. Which of the following conditions indicate that a good is produced under perfect competition:
A. producers` profits are high;
B. producers` profits are small;
C. total supply is inelastic;
D. individual demand is perfectly elastic.
24. The profit maximization condition for a firm in a market with monopolistic competition is the
following (MR is marginal revenue, MC is marginal cost, P is price, ATC is average total cost, TR
is total revenue):
A. MR = MC;
B. MC = P;
C. MR = ATC;
D. TR to be maximum.
25. Which of the following statements about monopoly is true:
A. there are several companies producing a specific product;
B. there is only one producing company, but the product has close substitutes;
C. there are no competitors on the relevant market;
D. input barriers are low.
26. There are differences between monopolistic and perfect competition regarding:
A. market entry;
B. the number of sellers and buyers;
C. the market power of competitors;
D. homogeneity of products.
27. Which of the following can be considered as the basic features of public goods:
A. are state-owned;
B. are characterized by non-excludability and non-rivalry;
C. are characterized by excludability and rivalry;
D. may be positive or negative.
28. Which of the following solutions are not part of the ways of internalizing externalities:
A. the imposition of fines on the producer of negative externalities;
B. the introduction of taxes and duties that bring private costs to the level of social costs;
C. closure of companies producing positive or negative externalities;
D. the association of the negative externality manufacturer with the receptor of such an effect.
29. Normally, the natural economy is characterized by:
A. price formation through complex mechanisms;
B. perfect competition;
C. the preponderance of product exchange;
D. the satisfaction of the individual and community needs of its own production.
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30. Which of the following features define human needs:
A. are not concurrent;
B. do not disappear momentarily if they are satisfied;
C. are unlimited in capacity;
D. are unlimited in number.
CORRECT ANSWERS: MICROECONOMICS
1.C 11.B 21.B
2.A 12.B 22.A
3.B 13.A 23.D
4.B 14.C 24.A
5.A 15.C 25.C
6.B 16.C 26.D
7.B 17.C 27.B
8.B 18.B 28.C
9.D 19.C 29.D
10.A 20.D 30.D
