Principles of Microeconomics (ECON2101)
Faculty of Economics and Management Science (FEMS)
Semester: First Semester
Level: 200
Year: 2015
DURATION: 3 HOURS
INSTRUCTION: tick the right answer. Any cancellation is considered a wrong answer.
1. What is the nature of total cost curve?
a) Continuous curve.
b) Discrete curve.
c) Intermittent curve.
d) Rising slope curve
2. Total fixed cost is synonymous to:
a) Replacement cost.
b) Business cost.
c) Overheard cost.
d) Direct cost.
3. The backbone of the market economy is:
a) The production of goods and services
b) The consumption of goods and services.
c) Demand and supply of goods and services
d) The choice of goods and services
4. Total variable cost is also known as:
a) Replacement cost.
b) Business cost.
c) Overheard cost.
d) Direct cost.
5. In the short run analysis of the firm, which cost is most important?
a) Total cost.
b) Marginal cost.
c) Average cost.
d) None of the above.
6. Why does the demand curve slopes downward from left to right?
a) Because of the price of goods and services.
b) Because of the quantity of goods and services bought.
c) Because of the law of diminishing marginal utility.
d) Because of the law of diminishing marginal consumption.
7. What is the principal cause of the behavior of this curve?
a) Price.
b) Taste and fashion.
c) Change in technology.
d) Weather condition.
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
1st Semester Exam
Course Title: Principles of Microeconomics
Course Code: ECON201
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8. Where do you classify the market structure for private schools in Cameroon?
a) Monopoly market
b) Monopolistic market
c) Oligopoly market
d) Perfect market
9. In the short run, why are the utility cost curve having a U-shaped?
a) Because they exist only TFC.
b) Because of the law of diminishing marginal returns.
c) Because of internal diseconomies of scale.
d) Because of internal economies of scale.
10. In an industry, when MR>MC, what will the firm do to increase profits?
a) Increase productivity
b) Decrease productivity
c) Increase expenditure
d) Decrease expenditure
11. Considering a long run situation, what is the nature of this market structure
AC<P=MR=MC=AR
a) Monopoly
b) Perfect market
c) Inequality market
d) None of the above
12. At what output are profits maximized in an enterprise?
a) When MR=MC
b) When TR=TC
c) When AR=AC
d) All of the three
13. Where do you classify the market structure of MTN, Orange, CAMTEL, Nextel
companies in Cameroon?
a) Monopoly market
b) Monopolistic market
c) Oligopoly market
d) Perfect market
14. Where do you classify the market structure of Amour Mezam, Grand Jeanot, Guarantee
Express transport companies in Cameroon?
a) Monopoly market
b) Monopolistic market
c) Oligopoly market
d) Perfect market
15. In the Cobb-Douglas production function if + + ⋯ > 1, what happens to the returns
to scale?
a) Increasing
b) Decreasing
c) Constant
d) None
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16. What is the nature of cigarette product?
a) Normal good
b) Elastic good
c) Inelastic good
d) Private good
17. The most fundamental economic problem is?
a) Security
b) The fact Cameroon imports more
than it exports
c) Health
d) Scarcity
18. 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
19. Economist point out that scarcity confronts
a) The rich but not the poor
b) The poor but not the rich
c) Both the poor and rich
d) Neither the poor nor the rich
20. Scarcity requires that people must
a) Trade
b) Compete
c) Cooperate
d) Make choices.
21. Which of the following is a microeconomic topic?
a) The reasons for a decline in average prices
b) The reasons why a consumer buys less orange juice
c) The cause of why total employment may decrease
d) The effect of the government budget deficit on inflation
22. Micro economics focuses on 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 cigarette sales
d) The hiring decision that a business makes.
23. Studying the determinant of prices in individual markets is primarily a concern of:
a) Negative economics
b) Micro economics
c) Positive economics
d) Macroeconomics
24. The analysis of the behavior of individual decision making units is the definition of:
a) Micro economics
b) Macro economics
c) Positive economics
d) Normative economics
25. When an economy produces more houses and fewer typewriters, it is answering the
question of:
a) Where to produce
b) When to produce
c) What to produce
d) For whom to produce
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26. When firms in an economy start producing more cars and fewer pens, they are answering
the question of:
a) Where to produce
b) When to produce
c) What to produce
d) For whom to produce
27. A model is often regarded as:
a) Generalization about a real world phenomenon
b) A detailed representation of a real world phenomenon
c) An inquiry about the global picture of a real world phenomenon
d) An abstract from a real world phenomenon
28. The question “should movies or compact discs be produced?” is an example of:
a) How to produce
b) Who to produce
c) Where to produce
d) What to produce
29. Which of the following is not a factor of production?
a) The water used to cool a nuclear power plant
b) The wages paid to workers
c) The effort of farmers raising cattle
d) The management skill of a small business owner
30. 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
31. In economics, positive statements are about:
a) macroeconomics not microeconomics
b) the way things are
c) the way things ought to be
d) microeconomics not macroeconomics
32. statements about what ought to be are called?
a) Normative statements
b) Implications
c) Assumptions
d) Positive statements
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33. 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 conclusion
34. 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
35. 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 sets of tools and ideas.
d) Microeconomics studies decisions of people and firms and macroeconomics studies
the entire economy
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