Microeconomics 3rd Edition by Austan
Goolsbee, Steven Levitt, Chad Syverson
Microeconomics Practice Questions 1–200
Topics Covered:
1. Introduction & Ten Principles of Economics
2. Supply & Demand
3. Elasticity
4. Consumer Choice
5. Production & Costs
6. Perfect Competition
7. Monopoly
8. Monopolistic Competition & Oligopoly
9. Game Theory & Strategic Behavior
10.Factor Markets & Labor
11.Capital & Investment
12.General Equilibrium & Welfare Economics
13.Externalities & Public Goods
14.Information Economics
15.Market Failures & Policy
Format:
● Multiple-choice (A–D)
● Correct answer provided
● Step-by-step solutions for numerical or conceptual problems
,1–10: Introduction & Principles
1. Economics is primarily concerned with:
A. Unlimited resources
B. Scarcity and choice
C. Only money management
✅
D. Government regulation
Answer: B
Solution: Economics studies how society allocates scarce resources among competing uses.
2. Opportunity cost is:
A. The monetary cost of a good
B. The value of the next best alternative foregone
C. Total expenditures
✅
D. Profit only
Answer: B
Solution: Choosing one option means you give up another; that foregone benefit is the
opportunity cost.
3. A rational decision maker:
A. Ignores benefits
B. Weighs costs and benefits to maximize utility
C. Chooses randomly
✅
D. Always spends less money
Answer: B
Solution: Rationality implies comparing marginal benefits and costs to make optimal decisions.
4. Marginal changes are:
A. Small incremental adjustments to a plan of action
B. Complete strategy shifts
C. Irrelevant in economics
, ✅
D. Fixed costs only
Answer: A
5. Trade can make people better off because:
A. It allows specialization and comparative advantage
B. It reduces scarcity
C. It eliminates opportunity cost
✅
D. It guarantees profits
Answer: A
6. Market economies allocate resources through:
A. Central planning
B. Prices and voluntary exchange
C. Random allocation
✅
D. Political decisions only
Answer: B
7. Government intervention may improve market outcomes when:
A. There are market failures like externalities or public goods
B. Prices are stable
C. Markets are perfect
✅
D. Competition is high
Answer: A
8. The production possibilities frontier (PPF) shows:
A. Maximum output combinations of two goods given resources and technology
B. Prices of goods only
C. Market demand
✅
D. Consumer preferences
Answer: A
Goolsbee, Steven Levitt, Chad Syverson
Microeconomics Practice Questions 1–200
Topics Covered:
1. Introduction & Ten Principles of Economics
2. Supply & Demand
3. Elasticity
4. Consumer Choice
5. Production & Costs
6. Perfect Competition
7. Monopoly
8. Monopolistic Competition & Oligopoly
9. Game Theory & Strategic Behavior
10.Factor Markets & Labor
11.Capital & Investment
12.General Equilibrium & Welfare Economics
13.Externalities & Public Goods
14.Information Economics
15.Market Failures & Policy
Format:
● Multiple-choice (A–D)
● Correct answer provided
● Step-by-step solutions for numerical or conceptual problems
,1–10: Introduction & Principles
1. Economics is primarily concerned with:
A. Unlimited resources
B. Scarcity and choice
C. Only money management
✅
D. Government regulation
Answer: B
Solution: Economics studies how society allocates scarce resources among competing uses.
2. Opportunity cost is:
A. The monetary cost of a good
B. The value of the next best alternative foregone
C. Total expenditures
✅
D. Profit only
Answer: B
Solution: Choosing one option means you give up another; that foregone benefit is the
opportunity cost.
3. A rational decision maker:
A. Ignores benefits
B. Weighs costs and benefits to maximize utility
C. Chooses randomly
✅
D. Always spends less money
Answer: B
Solution: Rationality implies comparing marginal benefits and costs to make optimal decisions.
4. Marginal changes are:
A. Small incremental adjustments to a plan of action
B. Complete strategy shifts
C. Irrelevant in economics
, ✅
D. Fixed costs only
Answer: A
5. Trade can make people better off because:
A. It allows specialization and comparative advantage
B. It reduces scarcity
C. It eliminates opportunity cost
✅
D. It guarantees profits
Answer: A
6. Market economies allocate resources through:
A. Central planning
B. Prices and voluntary exchange
C. Random allocation
✅
D. Political decisions only
Answer: B
7. Government intervention may improve market outcomes when:
A. There are market failures like externalities or public goods
B. Prices are stable
C. Markets are perfect
✅
D. Competition is high
Answer: A
8. The production possibilities frontier (PPF) shows:
A. Maximum output combinations of two goods given resources and technology
B. Prices of goods only
C. Market demand
✅
D. Consumer preferences
Answer: A
