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Microeconomics is usually one of the first courses anyone interested in business will take.

That's because it's foundational for understanding the world from an economic perspective.

During the semester, you'll cover topics like opportunity costs, rational decision making, 

cost-benefit analysis and thinking in marginal terms to better understand

how individual consumers, households, firms and industries operate under the limits

of scarcity.

Below are some sample practice questions to get you started on your journey

to mastering microeconomics this semester.

1. Which of the following best describes economics?

A. How politicians decide what people should want

B. A social science about decisions that people and societies make when faced with scarcity

C. An analysis of how people use unlimited resources to satisfy limited wants

D. A study of how the stock market allocates wealth from the poor to rich

E. What businesses do to manipulate politicians to keep prices high to maintain their high profits


2. Which of the following would not be an economic problem?

A. How much of your weekly budget you allocate to pizza and Chinese food

B. The amount that a business should produce and the prices it should charge for its products.

C. Whether you should return home to your parent's house over your holiday break

D. How much advertising a business should run to drive product sales

E. Whether it is morally right for Bill Gates to be worth close to 100 billion dollars


3. All of the following illustrate scarcity except

A. deciding between studying for an exam or playing video games

B. choosing between working or going to a movie

C. going to whatever restaurant you want because it's your birthday and your parents are paying

D. having to give up sleep to finish a paper

E. spending the 200 dollars that you allocated for food on groceries instead of going out to

eat at restaurants


4. Opportunity costs are

A. only the money that you spend

B. only the value of your time

C. irrelevant when making decisions

D. the value of the best alternative foregone

E. the same as sunk costs


5. The law of increasing opportunity costs is best demonstrated when

A. you give up more leisure time not studying to go from an A to A+ compared to going from

a B to an A

B. you always give up the same amount of leisure time not studying to go from an A to A+

compared to going from a B to an A

C. you give up less leisure time not studying to go from an A to A+ compared to going from a

B to an A

D. your grades don't correspond to the amount of leisure time given off

E. you don't study at all

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