NumicornNumicornLearn, solve, progress

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.

Select a test

5 Tests
1. Test2. Test3. Test4. Test5. Test

5. Test

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 Pigouvian tax?

Please select an answer first.

Correct answer: A

The correct answer is A tax designed to make producers or consumers account for an external 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: A Pigouvian tax can align private incentives with social costs by placing a price on harmful external effects.
  3. Check incentives and efficiency: The correct answer is A tax designed to make producers or consumers account for an external cost.

A Pigouvian tax can align private incentives with social costs by placing a price on harmful external effects.

2. QuestionMultiple choice

How can a subsidy address a positive externality?

Please select an answer first.

Correct answer: B

The correct answer is It can encourage activities whose social benefits exceed private benefits.

  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: Education and vaccination can create benefits for others, so subsidies may increase output toward a more efficient level.
  3. Check incentives and efficiency: The correct answer is It can encourage activities whose social benefits exceed private benefits.

Education and vaccination can create benefits for others, so subsidies may increase output toward a more efficient level.

3. QuestionMultiple choice

What is the Coase theorem associated with?

Please select an answer first.

Correct answer: C

The correct answer is The possibility that bargaining can address externalities when property rights are clear and transaction costs are low.

  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: Private negotiation can sometimes reach an efficient outcome, but high transaction costs and many affected parties limit the result.
  3. Check incentives and efficiency: The correct answer is The possibility that bargaining can address externalities when property rights are clear and transaction costs are low.

Private negotiation can sometimes reach an efficient outcome, but high transaction costs and many affected parties limit the result.

4. QuestionMultiple choice

What is the free-rider problem?

Please select an answer first.

Correct answer: D

The correct answer is People benefit from a public good without paying or contributing toward its provision.

  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: Nonexcludability can make it difficult to collect payment, causing underprovision of public goods.
  3. Check incentives and efficiency: The correct answer is People benefit from a public good without paying or contributing toward its provision.

Nonexcludability can make it difficult to collect payment, causing underprovision of public goods.

5. QuestionMultiple choice

What is a common-resource problem?

Please select an answer first.

Correct answer: A

The correct answer is Users overconsume a shared resource because access is difficult to restrict and individual costs are incomplete.

  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: Fisheries, groundwater, and open grazing areas can be depleted when users do not bear the full social cost of use.
  3. Check incentives and efficiency: The correct answer is Users overconsume a shared resource because access is difficult to restrict and individual costs are incomplete.

Fisheries, groundwater, and open grazing areas can be depleted when users do not bear the full social cost of use.

6. QuestionMultiple choice

What is asymmetric information?

Please select an answer first.

Correct answer: B

The correct answer is One side of a transaction has relevant information that the other side lacks.

  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: Information asymmetry can affect quality, pricing, contracts, and the willingness to trade.
  3. Check incentives and efficiency: The correct answer is One side of a transaction has relevant information that the other side lacks.

Information asymmetry can affect quality, pricing, contracts, and the willingness to trade.

7. QuestionMultiple choice

What is adverse selection?

Please select an answer first.

Correct answer: C

The correct answer is A problem that occurs when hidden information affects who chooses to participate before a transaction.

  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 insurance, people with higher expected risk may be more likely to seek coverage, changing the pool of participants.
  3. Check incentives and efficiency: The correct answer is A problem that occurs when hidden information affects who chooses to participate before a transaction.

In insurance, people with higher expected risk may be more likely to seek coverage, changing the pool of participants.

8. QuestionMultiple choice

What is moral hazard?

Please select an answer first.

Correct answer: D

The correct answer is A problem in which behavior changes after protection or a contract because the person does not bear the full consequences.

  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: Insurance or limited liability can reduce incentives for careful behavior when actions are difficult to monitor.
  3. Check incentives and efficiency: The correct answer is A problem in which behavior changes after protection or a contract because the person does not bear the full consequences.

Insurance or limited liability can reduce incentives for careful behavior when actions are difficult to monitor.

9. QuestionMultiple choice

Who bears more of a tax when demand is relatively inelastic?

Please select an answer first.

Correct answer: A

The correct answer is Consumers generally bear a larger share through a higher price.

  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 less responsive side of the market has fewer alternatives, so it tends to bear more of the economic burden.
  3. Check incentives and efficiency: The correct answer is Consumers generally bear a larger share through a higher price.

The less responsive side of the market has fewer alternatives, so it tends to bear more of the economic burden.

10. QuestionMultiple choice

What is cap-and-trade?

Please select an answer first.

Correct answer: B

The correct answer is A system that sets an emissions limit and allows permits to be traded.

  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: Trading permits can achieve an emissions target while allowing reductions to occur where they are least costly.
  3. Check incentives and efficiency: The correct answer is A system that sets an emissions limit and allows permits to be traded.

Trading permits can achieve an emissions target while allowing reductions to occur where they are least costly.

Previous testNext test