Microeconomics Fundamentals Quiz

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Questions and Answers

What are the basic elements analyzed in microeconomics?

Individual agents and markets, their interactions, and the outcomes of interactions.

What does macroeconomics analyze as a system?

Production, consumption, saving, and investment interactions, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies.

What are the broad distinctions within economics?

Positive economics (describing 'what is') and normative economics (advocating 'what ought to be'); economic theory and applied economics; rational and behavioural economics; mainstream economics and heterodox economics.

Where can economic analysis be applied throughout society?

Business, finance, cybersecurity, health care, engineering, and government; diverse subjects such as crime, education, the family, feminism, law, philosophy, politics, religion, social institutions, war, science, and the environment. Signup and view all the answers

What does economics focus on?

The behaviour and interactions of economic agents and how economies work. Signup and view all the answers

Explain the relation between cost curves and the optimization of production in a free market economy.

In a free market economy, productively efficient firms optimize their production process by minimizing cost consistent with each possible level of production. The result is a cost curve that helps profit-maximizing firms decide output quantities. Signup and view all the answers

What are the standard acronyms used to express different cost concepts?

The standard acronyms for cost concepts are: SR (short run), LR (long run), A (average), M (marginal), F (fixed), V (variable), and T (total). These can be combined in various ways to express different cost concepts. Signup and view all the answers

Explain the relationship between marginal cost curves and total cost curves.

Marginal cost curves are equal to the differential of the total cost curves. This means that the marginal cost represents the additional cost incurred for each additional unit of output, and is derived from the total cost curve. Signup and view all the answers

How do different types of cost curves relate to each other?

There are various types of cost curves, including total and average cost curves, marginal cost curves, and variable cost curves. These curves are all related to each other and can provide valuable insights into production and cost optimization. Signup and view all the answers

What are the applications of different cost curves in the short run and long run?

Some cost curves are applicable to the short run, while others are applicable to the long run. The distinction between short run and long run cost curves is based on the time frame and the types of costs involved (e.g., costs spent on non-reusable materials in the short run, and costs spent on renewable materials in the long run). Signup and view all the answers

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