[ DOST 13 ] DOST SCHOLARSHIP EXAM REVIEWER XIII

Microeconomics

Instructions:

Please answer each question to the best of your ability. Each question is multiple choice, and only one answer per question is correct. Select the most appropriate answer from the options provided. There are 20 questions in total.

When you have completed all questions, click the "Submit" button at the bottom of the page to see your score. Good luck!

1. What is the term used to describe the additional satisfaction gained from consuming one more unit of a good?

A) Total Utility
B) Marginal Utility
C) Average Utility
D) Consumer Surplus

2. If the price of a good increases and the quantity demanded decreases, this illustrates which law?

A) Law of Demand
B) Law of Supply
C) Law of Diminishing Returns
D) Law of Equilibrium

3. Which of the following is NOT a characteristic of perfect competition?

A) Many buyers and sellers
B) Product differentiation
C) Free entry and exit
D) Perfect information

4. In a market economy, what does the term "invisible hand" refer to?

A) The self-regulating nature of the marketplace
B) Government intervention in the economy
C) The role of monopolies
D) The influence of advertising

5. What is the primary goal of a firm operating under profit maximization?

A) Minimizing costs
B) Maximizing the difference between total revenue and total cost
C) Increasing market share
D) Enhancing product quality

6. What happens to the equilibrium price when there is a surplus in the market?

A) It decreases
B) It increases
C) It remains unchanged
D) It becomes unstable

7. Which of the following concepts refers to the loss of potential gain from other alternatives when one alternative is chosen?

A) Marginal Cost
B) Sunk Cost
C) Opportunity Cost
D) Implicit Cost

8. In the context of demand elasticity, what does it mean if a product has an elasticity greater than 1?

A) The product is elastic
B) The product is inelastic
C) The product is perfectly elastic
D) The product has unit elasticity

9. If a company experiences economies of scale, what does that indicate?

A) Decreasing average costs as production increases
B) Increasing average costs as production increases
C) No change in average costs
D) Fluctuating average costs

10. In the long run, what type of market structure is characterized by many firms selling similar but not identical products?

A) Monopolistic Competition
B) Perfect Competition
C) Oligopoly
D) Monopoly

11. What does the term "price ceiling" refer to?

A) A maximum price set by the government
B) A minimum price set by the government
C) The equilibrium price in a market
D) The highest price consumers are willing to pay

12. Which of the following best describes the law of diminishing marginal returns?

A) Adding more of one input while holding others constant will eventually yield lower per-unit returns
B) Total output will always increase with more input
C) Inputs can be substituted for one another without loss of output
D) Increased input leads to infinite output

13. What is the primary effect of a subsidy on a good or service?

A) It decreases the market price
B) It increases the market price
C) It eliminates shortages
D) It reduces the quantity demanded

14. If two goods are substitutes, what happens to the demand for one good if the price of the other good increases?

A) The demand for the first good increases
B) The demand for the first good decreases
C) The demand for the first good remains unchanged
D) The demand for both goods increases

15. What is the main characteristic of an oligopoly market structure?

A) A few firms dominate the market
B) Many firms compete with identical products
C) One firm controls the entire market
D) No barriers to entry exist

16. Which of the following best describes consumer surplus?

A) The difference between what consumers are willing to pay and what they actually pay
B) The total amount spent on a good
C) The total utility derived from a product
D) The total revenue received by sellers

17. In the context of Microeconomics, what is a “price taker”?

A) A firm that accepts the market price and cannot influence it
B) A firm that sets its own prices above the market level
C) A consumer who can set prices based on demand
D) A government entity that regulates prices

18. Which of the following scenarios demonstrates a shift in the supply curve?

A) A decrease in production costs
B) An increase in consumer income
C) A change in consumer preferences
D) A rise in the price of complementary goods

19. If a firm’s marginal cost exceeds its marginal revenue, what should it do to maximize profit?

A) Decrease production
B) Increase production
C) Maintain the same level of production
D) Raise prices

20. What type of market failure occurs when a single firm controls the entire market supply of a good or service?

A) Monopoly
B) Oligopoly
C) Perfect Competition
D) Monopolistic Competition

Result

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