A-Level Economics Practice: Microeconomics

An increase in the price of coffee causes a movement along the demand curve. What is this effect called?

Consumer surplus is defined as:

If the government imposes a price ceiling below the equilibrium price, the likely outcome is:

If the price of a good rises by 10% and the quantity demanded falls by 25%, what is the price elasticity of demand?

If demand for a good is price inelastic (PED = -0.3) and the price is increased, what happens to total revenue?

Two goods have a cross-price elasticity of demand (XED) of +2.5. What is the relationship between these goods?

Which of the following is an example of a negative externality?

Which of the following is a characteristic of a public good?

The tragedy of the commons occurs because:

An indirect tax (e.g., on cigarettes) is most effective at reducing consumption when demand for the good is:

A subsidy on a good with a positive externality will shift the supply curve and result in:

What is a cost-benefit analysis used for in government decision-making?

A profit-maximising firm will produce at the output level where:

Economies of scale occur when:

In the short run, a firm will continue to produce even if it is making a loss provided that:

Which market structure is characterised by many firms, homogeneous products, perfect information, and freedom of entry and exit?

A natural monopoly exists when:

In an oligopoly, firms may engage in tacit collusion through price leadership. This occurs when: