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Microeconomics Practice Tests

These Grade 12 Social Studies practice tests develop Microeconomics skills through consumer choice, production, costs, market structures, labor markets, externalities, public goods, information problems, and efficiency.

Skills covered

  • Analyzing marginal utility, diminishing utility, budget constraints, normal goods, substitution, complements, utility maximization, consumer surplus, producer surplus, and demand shifts
  • Calculating and interpreting fixed, variable, total, marginal, and average costs, economies of scale, diminishing marginal product, short run, long run, explicit costs, and economic profit
  • Comparing price-taking firms, monopoly, oligopoly, monopolistic competition, profit maximization, price discrimination, cartels, deadweight loss, antitrust, and natural monopoly
  • Evaluating derived labor demand, marginal revenue product, minimum wage, monopsony, human capital, wage differentials, unions, discrimination, income inequality, and labor supply
  • Applying Pigouvian taxes, subsidies, Coase bargaining, free-rider problems, common resources, asymmetric information, adverse selection, moral hazard, tax incidence, and cap-and-trade

How to use these practice tests

Focus on the marginal change and the incentive it creates. Identify the relevant curve, cost, market structure, or external effect, then decide whether the outcome is efficient and who gains or bears the cost.

For more Grade 12 Social Studies practice, return to the Grade 12 Social Studies category.

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Grade 12 Microeconomics Practice Tests

Practice Grade 12 Social Studies questions about consumer choice, production, costs, market structures, labor markets, externalities, public goods, and information problems.

Choose the best answer. Identify the marginal change, incentive, market structure, cost, external effect, or information problem and evaluate efficiency.

10 Questions
0/10 Questions0 %
Correct 0
Incorrect 0
Unanswered 10
1. QuestionMultiple choice

What is a fixed cost?

Please select an answer first.

Correct answer: A

The correct answer is A cost that does not change with short-run output.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: Rent for a facility is often treated as fixed in the short run, even when output changes.
  3. Check incentives and efficiency: The correct answer is A cost that does not change with short-run output.

Rent for a facility is often treated as fixed in the short run, even when output changes.

2. QuestionMultiple choice

What is a variable cost?

Please select an answer first.

Correct answer: B

The correct answer is A cost that changes as the quantity produced changes.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: Materials and hourly production labor are common variable costs because they vary with output.
  3. Check incentives and efficiency: The correct answer is A cost that changes as the quantity produced changes.

Materials and hourly production labor are common variable costs because they vary with output.

3. QuestionMultiple choice

What is total cost?

Please select an answer first.

Correct answer: C

The correct answer is The sum of fixed cost and variable cost.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: Total cost includes all economic costs associated with producing a given output.
  3. Check incentives and efficiency: The correct answer is The sum of fixed cost and variable cost.

Total cost includes all economic costs associated with producing a given output.

4. QuestionMultiple choice

What is marginal cost?

Please select an answer first.

Correct answer: D

The correct answer is The additional cost of producing one more unit of output.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: Marginal cost is the change in total cost divided by the change in quantity produced.
  3. Check incentives and efficiency: The correct answer is The additional cost of producing one more unit of output.

Marginal cost is the change in total cost divided by the change in quantity produced.

5. QuestionMultiple choice

What is average total cost?

Please select an answer first.

Correct answer: A

The correct answer is Total cost divided by quantity of output.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: Average total cost shows the cost per unit and equals average fixed cost plus average variable cost.
  3. Check incentives and efficiency: The correct answer is Total cost divided by quantity of output.

Average total cost shows the cost per unit and equals average fixed cost plus average variable cost.

6. QuestionMultiple choice

What are economies of scale?

Please select an answer first.

Correct answer: B

The correct answer is Long-run average cost falls as output increases.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: Specialization, bulk purchasing, and spreading fixed costs can reduce average cost over a range of output.
  3. Check incentives and efficiency: The correct answer is Long-run average cost falls as output increases.

Specialization, bulk purchasing, and spreading fixed costs can reduce average cost over a range of output.

7. QuestionMultiple choice

What is diminishing marginal product?

Please select an answer first.

Correct answer: C

The correct answer is Additional units of a variable input add less output when other inputs are fixed.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: In the short run, crowding a fixed input can cause each additional unit of labor to contribute less output.
  3. Check incentives and efficiency: The correct answer is Additional units of a variable input add less output when other inputs are fixed.

In the short run, crowding a fixed input can cause each additional unit of labor to contribute less output.

8. QuestionMultiple choice

What distinguishes the long run from the short run in production analysis?

Please select an answer first.

Correct answer: D

The correct answer is In the long run, all inputs can be varied.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: The short run has at least one fixed input; the long run is long enough for all inputs and capacity to adjust.
  3. Check incentives and efficiency: The correct answer is In the long run, all inputs can be varied.

The short run has at least one fixed input; the long run is long enough for all inputs and capacity to adjust.

9. QuestionMultiple choice

What is an explicit cost?

Please select an answer first.

Correct answer: A

The correct answer is A direct monetary payment made by a firm.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: Wages, rent, utilities, and purchased materials are examples of explicit costs.
  3. Check incentives and efficiency: The correct answer is A direct monetary payment made by a firm.

Wages, rent, utilities, and purchased materials are examples of explicit costs.

10. QuestionMultiple choice

What is economic profit?

Please select an answer first.

Correct answer: B

The correct answer is Total revenue minus explicit and implicit opportunity costs.

  1. Identify the microeconomics concept: Determine whether the question concerns consumer choice, production, costs, market structure, labor, externalities, information, or public goods.
  2. Apply the microeconomic model: Economic profit includes the opportunity cost of owner-supplied resources, while accounting profit subtracts explicit costs.
  3. Check incentives and efficiency: The correct answer is Total revenue minus explicit and implicit opportunity costs.

Economic profit includes the opportunity cost of owner-supplied resources, while accounting profit subtracts explicit costs.

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