MICROECONOMICS COMPREHENSIVE
EXAMINATION TEST 2026 FULL QUESTIONS
AND CORRECT ANSWERS
◉firm. Answer: an organization that comes into being when a
person or a group of people decides to produce a good or service to
meet a perceived demand. transforms inputs into outputs. primary
producing unit in a market economy
◉fixed cost. Answer: a cost that does not change, no matter how
much of a good is produced. there are none in the long-run
◉free enterprise. Answer: the freedom of individuals to start and
operate private businesses in search of profits
◉free rider problem. Answer: getting the benefits of something
without having to contribute.. this problem also arises when
individuals receive the benefit whether they contributed or not
(Cleaner air).
◉Heckscher-Ohlin theorem. Answer: a country has a comparative
advantage in the production of a product if that country is relatively
, well endowed with inputs used intensively in the production of that
product.
◉homogenous products. Answer: undifferentiated products;
products that are identical to, or indistinguishable from, one another
◉income. Answer: the money a person gets from salary or wages,
profits, interest, investments, and other sources
◉imperfectly competitive industry. Answer: An industry in which
single firms have some control over the price of their output
◉income elasticity of demand. Answer: measures the
responsiveness of the quantity demanded of a good to the change in
the income of the people demanding the good. Formula: (%change
in quantity demanded) / (%change in income)
◉economies of scale. Answer: as a company produces larger
numbers of a particular product, the cost of each of these products
goes down aka increasing returns to scale
◉indifference curve. Answer: a curve showing the combinations of
two goods that leave the consumer with the same level of utility.
EXAMINATION TEST 2026 FULL QUESTIONS
AND CORRECT ANSWERS
◉firm. Answer: an organization that comes into being when a
person or a group of people decides to produce a good or service to
meet a perceived demand. transforms inputs into outputs. primary
producing unit in a market economy
◉fixed cost. Answer: a cost that does not change, no matter how
much of a good is produced. there are none in the long-run
◉free enterprise. Answer: the freedom of individuals to start and
operate private businesses in search of profits
◉free rider problem. Answer: getting the benefits of something
without having to contribute.. this problem also arises when
individuals receive the benefit whether they contributed or not
(Cleaner air).
◉Heckscher-Ohlin theorem. Answer: a country has a comparative
advantage in the production of a product if that country is relatively
, well endowed with inputs used intensively in the production of that
product.
◉homogenous products. Answer: undifferentiated products;
products that are identical to, or indistinguishable from, one another
◉income. Answer: the money a person gets from salary or wages,
profits, interest, investments, and other sources
◉imperfectly competitive industry. Answer: An industry in which
single firms have some control over the price of their output
◉income elasticity of demand. Answer: measures the
responsiveness of the quantity demanded of a good to the change in
the income of the people demanding the good. Formula: (%change
in quantity demanded) / (%change in income)
◉economies of scale. Answer: as a company produces larger
numbers of a particular product, the cost of each of these products
goes down aka increasing returns to scale
◉indifference curve. Answer: a curve showing the combinations of
two goods that leave the consumer with the same level of utility.
