Principles of Microeconomics (ECON2101)
Faculty of Economics and Management Science (FEMS)
Semester: First Semester
Level: 200
Year: 2015
Instruction: tick the right answer. Any cancelling is considered a wrong answer
1)
According 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”
2)
The focuses of economic analysis of real world phenomenon revolves around:
A.
Positive economics and micro economics.
B.
Positive economics and normative economics
C.
Normative economics and macro economics
D.
Micro economics and macro economics
3)
In positive economics, the subject matter of analysis is on:
A.
What ought to be instead of what is
B.
What ought to be and what is
C.
What will be
D.
What is instead of what ought to be
4)
In normative economics, the center of the discussion revolves around:
A.
What will be
B.
What is instead of what ought to be
C.
What ought to be and what is
D.
What ought to be instead of what is
5)
The fundamental economic problem to be answered by every economy include the
questions of:
A.
Where are we, where do we go and do we reach there?
B.
How much to produce, hoe to sell and where to produce?
C.
How to survive, what to produce and when to produce?
D.
What to produce, how to produce and for whom to produce?
6)
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 frame work within which the market is at peak period
D.
A position where the market forces of a given phenomenon agree at a given time
7)
The factor of production-land refers to:
A.
The piece of plot on which an economic activity can be run.
B.
The physical assets that enable the undertaking of an economic activity
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
1
st
Semester C.A
Course Title: Principles of Microeconomics
Credit Value:
Course Lecturers:
Time:
Course Code: ECON201
Venue:
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C. None of the above
D. The area on the surface of the earth on which an economic activity can be run
8) The factor of production-capital refers to:
A. The amount of money that enables the undertaking of an economic activity
B. The physical assets that enable the undertaking of and economic activity
C. None of the above
D. The financial and physical resources that enable the undertaking of an economic
activity.
9) A diagram that best illustrates the economic concept of choice, scarcity and opportunity
cost is:
A. The demand curve.
B. The supply curve
C. The market equilibrium
D. The production possibility curve
10) Risk describes a situation where:
A. The outcome of an event is known, but the probability of alternative outcomes
unknown
B. The probabilities of different outcomes are known
C. The probabilities of different outcomes are unknown
D. The outcome of an event is unknown, but the probability of alternative outcomes
known
11) Uncertainty depicts a situation where:
A. The probabilities of different outcomes are known
B. The outcome of an event is known, but the probability of alternative outcomes
unknown
C. The outcome of an event is unknown, but the probability of alternative outcomes
known
D. The probabilities of different outcomes are unknown
12) The inductive method of reasoning heavily depends on data collected and proceeds from:
A. General to details
B. Mathematical expression to conceptual expression
C. Conceptual expression to mathematical expression
D. Details to general
13) The deductive method of reasoning heavily depends on established principles and
proceeds from:
A. Details to general
B. Mathematical expression to conceptual expression
C. Conceptual expression to mathematical expression
D. General to details
14) 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
15) One major defect of an inductive method of reasoning is that:
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A. It is too rigid in its analysis
B. It is highly abstract
C. Its conclusions are universally applicable
D. Its relies on statistical numbers for its analysis
16) 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 the above
17) Which school of taught assumed that a consumer may derive satisfaction from the
consumption of a combination of goods and services, which will then be ranked according
to preference?
A. Ordinalist school only
B. Cardinalist school only
C. Cardinalist and ordinalist school
D. None
18) From your knowledge of the principle of microeconomics, how do you consider the utility
concept?
A. Subjective concept
B. Objective concept
C. Bijective concept
D. All of the three
19) From figure 2.5 of the equilibrium of the consumer (as discussed in your lecture notes),
when is the consumer said to be at equilibrium?
A. At point ‘a’
B. At point ‘e’
C. At point ‘b’
D. At point ‘AB’
20) From the indifference curve technique, following the Hicksian compensating variation
method or the Slusky’s cost-difference method, what happens if in figure 2.6, the price of
‘x’ falls?
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A. The consumer moves to a higher indifference curve IC
2
B. The technique of compensating variation will force the consumer to his old
indifference curve IC
1
C. The consumer will move from e
1
to e
0
on the indifference curve IC
1
D. All of the above
21) If income elasticity of demand is less than 1, what is the nature of the good?
A. Inferior good
B. Normal good
C. Luxury good
D. Substitute good
22) If cross elasticity of demand is equal to 0, what is the nature of the goods?
A. Complementary good
B. Substitute good
C. Independent good
D. None
23) From the graph below, how can you best describe S
4
S
4
?
A. Relative inelastic supply B. Perfectly elastic supply
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C. Perfectly inelastic supply D. Relatively elastic supply
24) Which of the following is not a function of price mechanism in a market economy?
A. Signaling function
B. Transmission of preferences
C. Rationing function
D. Pricing function
25) Considering the curve below and in the case of an industry, what is the nature of supply
at a low price and for small quantities?
A.
Unitary elasticity
B.
Perfectly elastic
C.
Perfectly inelastic
D.
None of the above
26)
What are the difference aspects of production processes?
A.
Quantity of good, size of good, distribution of good and service
B.
Form, quantity and distribution of good or service
C.
Temporal and spatial distribution, size of good, form of good
D.
Quantity of the good, period of production, distribution of good or service
27)
What are the most important forms of production?
A.
Household, subsistence, market
B.
Market, surplus, subsistence
C.
Public, household, market
D.
Subsistence, domestic, surplus
28)
What type of production function is this: Q=
?
+
'
'
+
,"#
+ #
'"
$
+ "#
A. CES production function
B. Quadratic production function
C. Leontief production function
D. Cobb-Douglas production
function
29) Stage two of the production is characterized by?
A. The variable input is used with
increasing output per unit
B. Output increases at a decreasing
rate
C. Variable inputs are over-utilized
D. All of the above
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30) What are homothetic functions?
A. Functions whose marginal technical rate of substitution is homogeneous of degree
zero
B. Functions whose marginal technical rate of substitution is homogeneous of degree
minus one
C. Functions whose marginal technical rate of substitution is homogeneous of degree
one
D. None of the above
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