Quick Quiz (3) Higher Level Only

Ten questions for higher level students on section 2 from the syllabus.

1) Explain the law of diminishing returns

2) Draw a diagram to show economies of scale.

3)Explain the difference between abnormal and normal profit

4) Explain the difference between accounting and abnormal profit

5) State two other firm objectives aside from profit maximization

6) Draw the long run equilibrium position for a firm in perfect competition

7) Explain what is meant by ‘shut down’ price.

8) Outline the key features of a ‘contestable market’.

9) Outline the three main forms of price discrimination

10) Explain the difference between productive, allocative and dynamic efficiency