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Some examples from this set of practice questions
1.
What is utility?
Answer: The satisfaction received from consumption.
2.
What is total utility?
Answer: The total satisfaction received from consumption.
3.
What is marginal utility?
Answer: The utility derived from the consumption of one more unit of the good or service.
4.
What is diminishing marginal utility?
Answer: The fall in marginal utility as consumption increases.
5.
What is equimarginal principle?
Answer: Consumers maximise their utility where their marginal valuation for each product consumed is the same.
Some examples from this set of practice questions
1.
What is the marginal product?
Answer: The change in output arising from the use of one or more unit of a factor of production.
2.
What are diminishing returns?
Answer: Where the output from an additional unit of input leads to a fall in the marginal product.
3.
What is a firm?
Answer: Any business that hires factors of production in order to produce goods and services.
4.
What is profit maximisation?
Answer: The assumed objective of a firm where the difference between total revenue and total cost is at a maximum.
5.
What are fixed costs?
Answer: Costs that are independent of output in the short run.
Some examples from this set of practice questions
1.
What are external economies of scale?
Answer: Cost savings accruing to all firms in an industry as the scale increases.
2.
What is the minimum efficient scale?
Answer: The lowest level of output at which costs are minimised.
3.
What is profit?
Answer: The difference between total revenue and total costs.
4.
What is normal profit?
Answer: A cost of production that is just sufficient for a firm to keep operating in a particular industry.
5.
What is abnormal profit?
Answer: Profit that is earned above normal profit.
Some examples from this set of practice questions
1.
What is perfect competition?
Answer: An ideal market structure that has many buyers and sellers, identical or homogeneous products, no barriers to entry.
2.
What is a monopoly?
Answer: A pure monopoly is just one firm in an industry with very high barriers to entry.
3.
What is monopolistic competition?
Answer: A market structure where there are many firms, differentiated products and few barriers to entry.
4.
What is an oligopoly?
Answer: A market structure with few firms and high barriers to entry.
5.
What is imperfect information?
Answer: Any market structure except for perfect competition.
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