Principles of Microeconomics (ECON201)
Faculty of Economics and Management Science (FEMS)
Semester: First Semester
Level: 200
Year: 2019
1. The focus of economic analysis of real-world phenomena revolves around:
a) positive economics and microeconomics
b) positive economics and normative economics
c) microeconomics and macroeconomics
d) normative economics and macroeconomics
2. In positive economics, the subject matter of analysis is on:
a) what ought to be instead of what is.
b) What is instead of what ought to be.
c) What will be
d) what ought to be and what is.
3. The fundamental economic problem addressed by every economy include the
question of:
a) where are we, where do we go and when do we reach there?
b) How much to produce, how to sell and where to sell?
c) What to produce, how to produce and for whom to produce?
d) How to survive, what to produce and when to produce?
4. The factor of production – land refers to:
a) the area on the surface of the earth on which an economic activity can be run
b) the piece of plot on which an economic activity can be run
c) the physical assets that enable the running of an economic activity
d) none of the above.
5. A diagram that best explains the economic concepts of choice, scarcity and
opportunity cost is;
a) the demand curve
b) the supply curve
c) the market equilibrium
d) the production possibility curve
6. In normative economics, the center of the discussion revolves around:
a) what ought to be instead of what is.
b) what will be
c) what is instead of what ought to be
d) what ought to be and what is
7. Market equilibrium is;
a) a point where the market forces of a given phenomenon agree at a given time
b) an interval within which the demand and supply of a given phenomenon agree at a
given time
c) a position where the market forces of a given phenomenon agree at a given time
d) a framework within which the market is at peak period
8. The inductive method of reasoning heavily depends on data collection and proceeds
from:
a) general to details
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FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
First Semester C.A Course: Principles of Microeconomics: ECON201
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b) mathematical expression to conceptual expression.
c) conceptual expression to mathematical expression
d) detail to general
9. Risk describes is a situation where:
a) the outcome of an event is unknown, but the probability of alternative outcomes
known
b) the outcome of an event is known, but the probability of alternative outcomes
unknown
c) the probabilities of different outcomes are known
d) the probabilities of different outcomes are unknown
10. Uncertainty describes a situation where:
a) the probabilities of different outcomes are known
b) the probabilities of different outcomes are unknown
c) the outcome of an event is known, but the probability of alternative outcomes
unknown
d) the outcome of an event is unknown, but the probability of alternative outcomes
known
11. The deductive method of reasoning heavily depends on established principles and
proceeds from;
a) general to details
b) details to general
c) mathematical expression to conceptual expression
d) conceptual expression to mathematical expression
12. A model is often regarded as:
a) generalization about a real-world phenomenon
b) a detailed representation of a real world phenomenon
c) an abstraction from a real world phenomenon
d) an inquiry about the global picture of a real world phenomenon
13. Which of the following approach uses qualitative measure of utility?
a) cardinal approach only b) cardinal and ordinal approaches
c) ordinal approach only d) none of three
14. The most fundamental economic problem is:
a) security b) the fact Cameroon imports more than it exports
c) health d) scarcity
15. Economics is best defined as the study of how people and their institutions:
a) make choices to cope with scarcity b) attain wealth
c) choose abundance over scarcity d) use their infinite resources
16. Economics point out that scarcity confronts;
a) the rich but not the poor b) the poor but not the rich
c) both the poor and the rich d) neither the poor nor the rich
17. Scarcity requires people must:
a) trade b) compete c) cooperate d) make choices
18. Which of the following is a microeconomic topic?
a) The reason for a decline in average prices
b) The reasons why a consumer buys less orange juice.
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c) the cause of why total employment may decrease
d) the effect of the government budget deficit on inflation
19. Microeconomics focuses on all the following except:
a) the effect of increasing the money supply on inflation
b) the purchasing decisions that an individual consumer makes
c) the effect of an increase in the tax on cigarettes sales
d) the hiring decisions that a business makes
20. Studying the determination of prices in individual markets is primarily a concern of;
a) negative economics b) micro economics
c) positive economics d) macroeconomics
21. When an economy produces more houses and fewer bicycles, it is answering the
question of:
a) where to produce b) for whom to produce c)
how to produce d) what to produce
22. The term used to emphasize that making choices in the face of scarcity involves a cost
is:
a) utility cost b) opportunity cost
c) accounting cost d) substitution cost
23. In economics, positive statement are about:
a) macroeconomics, not microeconomics b) the way things are
c) the way things ought to be d) microeconomics, not macroeconomics
24. Statements about what ought to be are called:
a) normative statement b) implication
c) assumptions d) positive statements
25. Three steps that economics take to discover how the economic world works are:
a) model building; speculation; and revision
b) observation and measurement; model building; and testing models
c) data mining; data testing and drawing conclusions
d) speculation; observation and measurement; and drawing conclusions
26. The fallacy of composition is:
a) an expression that means “other things being equal”
b) the false statement that what is true of the parts is true of the whole and vice versa
c) the reasoning that a first event causes a second event because the first occurred
before the second
d) a statement about the way the economic world ought to be
27. One major defect of the inductive method of reasoning is that;
a) it is too rigid in ids analysis
b) it is highly abstract
c) it relies on statistical numbers for its analysis
d) its conclusions are universally applicable
28. In broad terms the difference between microeconomics and macroeconomics is that:
a) microeconomics studies the effects of government taxes on the national
unemployment rate
b) macroeconomics studies government regulations on individual goods whereas
microeconomics does not
c) they use different set of tools and ideas
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d) microeconomics studies decisions of people and firms and macroeconomics studies
the entire economy
29. According to Adam Smith, economics can be defined as;
a) “the practical science of the production and distribution of wealth”
b) “the study of mankind in the ordinary business of life”
c) “the study of the way in which people and their institutions act to satisfy their
unlimited wants”
d) “an inquiry into the nature and causes of wealth of nations”
30. There are basically three participating economic agents in the functioning of an
economy:
a) “the firms, the government and the households”
b) “the students, the teacher and the parents”
c) “the rich, the poor, and the middle class”
d) “the father, the mother and the children”
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