BUS400: Highlights of Test #1-Fall 2022

1. The test consists of 30 multiple choice questions worth 1/3 (0.33) marks each for a total of 10

marks.

2. The 30 questions are based on two chapters, namely, Chapter 1 (The Economic Problem, and

Chapte2 (Demand and Supply).

Questions Related to Chapter 1

What is the study of economics important/useful?

What are the factors of production?

What are the incomes/rewards received by the four factors of production?

What are the three fundamental economic questions?

What is the difference between microeconomics and macroeconomics?

What is the difference between a positive statement and a normative statement?

What is a capital good as opposed to a consumer good?

What is the opportunity cost?

What is the law of increasing opportunity cost?

What are the underlying assumptions of the PPC?

What does the negative slope of the PPC implies

What do points inside the PPC mean/imply?

What causes the PPC to shift outward and/or inward?

What are the two types of efficiency

Questions Related to Chapter 2: Demand and Supply

What is demand? What is supply?

What is the law of demand? What is the law of supply?

Why does the demand curve slope downward?

What is the income effect? What is the substitution effect?

What are the determinants of demand?

What are the determinants of supply?

What would happen if the price is above or neloe equilibrium

What is the difference between a change in the quantity demand and a change in demand?

What happens to equilibrium price and quantity when either demand or supply changes?

What are complementary goods? What are substitute goods?

What happens to equilibrium price and equilibrium quantity if either supply or demand changes

What is an inferior good? What is a normal good?

What is the impact of an improvement in technology?