Practice Quiz

CLEP Microeconomics Exam Prep - Question List

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6. Which principle maintains that the government should tax individuals in accordance with the benefits they receive-no matter what their income level?
  1. Ability-to-pay principle
  2. Benefits-received principle
  3. Regressive tax principle
  4. Progressive tax principle
See answer
7. In order to effectively maximize its profit, a business should mire labor until MRP = W. True or false?
  1. True
  2. False
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8. Think about accounting profits. You should know that accounting profits are different to an account versus an economist. To an economist, Economic Profit = Total Revenue − ______________.
  1. Explicit Costs
  2. Implicit Costs
  3. Explicit Costs + Implicit Costs
  4. Explicit Costs - Implicit Costs
See answer
9. If the demand for something is perfectly inelastic, then what is the price elasticity of demand?
  1. -1
  2. 0
  3. 1
  4. 100
See answer
10. Which of the following is the correct term for the simple act of giving one thing up for another?
  1. Opportunity cost
  2. Profit motive
  3. Trade-off
  4. Command
See answer

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