MULTIPLE CHOICE:

1.A technological advancement

Select one:

a.will shift the supply curve to the right.

b.Will shift the demand curve to the right.

c.will shift the demand curve to the left.

d.will shift the supply curve to the left.

2.Economics deals primarily with the concept of

Select one:

a.poverty

b.power

c.scarcity

d.change

3.Which of the following will have a movement along the demand curve of apple?

Select one:

a.Increase in the income of consumers.

b.Increase in price of oranges.

c.Increase in preference.

d.Increase in price of apple.

4.Which of the following ismostlikely to be studied by a Micro-Economist?

Select one:

a.Unemployment in the Economy.

b.Employment of Labour in Furniture Production.

c.The Growth Rate of Aggregate Output.

d.Inflation of the General Price Level.

5.The Points on the Production Possibilities Frontier are said to be _________

Select one:

a.efficient

b.normative

c.inefficient

d.unattainable

6.The relationship between quantity supplied and price is ____________ and the relationship between quantity demanded and price is ______________.

Select one:

a.inverse, inverse

b.inverse, direct

c.direct ,inverse

d.direct, direct

7.If the Cross Elasticity of Demand between two goods is Negative, then the two goods are ___________________ goods.

Select one:

a.substitute

b.complimentary

c.inferior

d.normal

8.Rent is the return from which of the following factors of production

Select one:

a.Capital

b.Land.

c.Business

d.Labour.

9.A 17% rise in the price of petrol causes a decline of 35% in the quantity of vehicles demanded and 12% increase in quantity demanded for LP Gas.

What is theCross Elasticity of demandfor vehicles with respects to the price of petrol?

Select one:

a.2.06

b.-0.49

c.0.49

d.-2.06

10.The market for good X in country MHN is given as follows: Market demand is given asP =50- 3Qwhile market supply is represented byP = 10 + 2Q.

What is the value of producer surplus in the market for good X?

Select one:

a.$65.00

b.$55.00

c.$64.00

d.$96.00

11.Microeconomics is the study of ________________________.

Select one:

a.how choices and decision are being made for the economy as a whole

b.the global economy

c.the performance of the national economy such as finding the GDP for the economy

d.how choicesare made by individuals and businesses and it looks at the behavior of individual people and companies

12.When there is no divergence between private MB and social MB and between private MC and social MC, a market achieves

Select one:

a.equitable allocation of resources.

b.neither efficientnor equitable allocation of resources.

c.both efficient and equitable allocation of resources.

d.efficient allocation of resources

13.Let's suppose that the equilibrium price of gasoline has increased recently. Which of the following combinations of changes in demand and supply best explains this price increase?

Select one:

a.Demand has decreased slightly, and supply has increased significantly.

b.Demand has decreased slightly, and supply has decreased significantly.

c.Demand has decreased significantly, and supply has decreased slightly.

d.Demand has increased slightly, and supply has increased significantly.

14.Holding all other factors constant, consumers demand more of a good the

Select one:

a.steeper the upward slope of the demand curve.

b.steeper the downward slope of the demand curve.

c.higher its price.

d.lower its price.

15.The market for good X in country MHN is given as follows: Market demand is given asP =50- 3Qwhile market supply is represented byP = 10 + 2Q. Suppose that a price floor is imposed at $35.00 per good X.

What is the dead weight loss created as a result of this imposition of price floor.

Select one:

a.$35.00

b.$22.50

c.$42.50

d.$45.00

16.When the price is $5.00, the quantity demanded is 10 units of Good M. When the price rises to $7.00 of the same Good M, the quantity demanded becomes 5 units. What is the Price Elasticity of Demand of Good M?

Select one:

a.2.00

b.0.50

c.0.33

d.1.00

17.A Production Possibilities Frontier will shift outward for which of the following reasons?

Select one:

a.Instability.

b.An economic growth.

c.Change from unemployment to full employment.

d.A decrease in the level of technology.

18.To determine the total demand for all consumers, sum the quantity each consumer demands

Select one:

a.both A and B will generate the same total demand.

b.at a given quantity.

c.at a given price

d.at all prices and then sum this amount across all consumers.