Principles of Microeconomics (ECNC2101)
Higher Institute of Commerce and Management (HICM)
Semester: Resit
Level: 200
Year: 2018
THE UNIVERSITY OF BAMENDA
Higher Institute of Commerce and Management
(HICM Level 1)
Resit Examination 2017/2018 Principles of Microeconomics, course code: ECNC 102, Time
Allowed:1H
Examiner: Dr NDAMSA / Mr Kifen
QUESTION 1( 10 MARKS)- 1 Mark each
Write TRUE for the correct statement and FALSE for the wrong one. Do not copy
statements.
1) A need becomes demand when a consumer expresses the desire to have a good.
2) A minimum price set by the government is above the equilibrium price.
3) When a firm does not produce anything its total costs made up of fixed cost
4) Normal and luxurious goods can be determined by their income elasticities.
5) The technical inefficiency region of production lies within the upper and lower
ridge lines.
6) Technology is the only production input that does not vary in the very long run.
7) Market equilibrium is stable with a normal demand curve and a supply curve that slopes
downwards from right to left.
8) If MUA/PA is greater than MUB/PB then we need to Increase the consumption of B in order to
get to equilibrium.
9) The income consumption curve is always positive since changes in income increase consumption.
10) A demand curve slopes downwards from left to right due to the inverse relationship between price
and quantity demanded.
QUESTION II (20 MARKS) - 2 marks each
1) Why makes economics a 'normative science'? (a sentence)
2) Where does the government place a minimum price policy with respect to the market price?
(3 or 4 words)
3) Why are indifference curves convex to the origin? (1 or 2 phrases)
4) If we have two goods A and B. State the first and second order conditions for utility
maximization, (a mathematical expression and a phrase)
5) Under which time period can production technology be varied? (2 or 3 words)
6) What is the economic significance of a negative Marginal Rate of Technical Substitution
(MRTS)? (one sentence) j '
www.schoolfaqs.net
7) Which economic principle is used to explain what happens to production with one input
which can be changed? (3 or 4 words)
8) Why do higher isoquants yield higher levels of output to the producer? (a phrase)
9) Which economic principle explains the upward sloping section of the long run average cost
curve?
10) When do diseconomies of scale occur? (a sentence)
QUESTION III: (5 marks)
a) Differentiate between implicit and explicit costs (2 marks)
b) Differentiate between economic and accounting profit ( 3 marks).
Good luck!
www.schoolfaqs.net
