Multiple Choice (MicroEconomics) (Answers Only)

It is the market system that has total control over the market resulting in pareto inefficiency.

A.Monopoly

B.Duopoly

C.Oligopoly

D.Perfect Competition

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"The Office of the Director of Public Prosecutions (ODPP) statistics on sexual offences in the month of June 2022 stated that there were 18 cases of sexual abuse and 10 out of the 18 cases were children below 18 years of age." Sourcesadhttps://www.savethechildren.org.fj). This is a normative statement.

Select one:

True

False

Question 3

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The Edgeworth box is used to model; (i) welfare social functions; (ii) welfare economic theory; (iii) non-welfare economic theory.

Which of the following is correct?

A. Only alternative (iii) is true.

B. Only alternative (ii) is true.

C. Only alternative (i) is true.

D. All alternatives (i) to (iii) are true.

Question 4

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This theory is based on the argument that the allocation of resources make no person better off without making another person worse off.

A.Pareto improvement

B.Pareto efficiency

C. Production Efficiency

D.Consumption Efficiency

Question 5

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This curve represents the set of all points that are pareto efficient.

A.Consumption curve.

B.Indifference curve.

C.Production curve.

D.Contract curve.

Question 6

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Assume that we know the marginal rate of substitution (MRS) for two people, Alana and Jone, in their consumption of two goods, taro and fish. The consumption efficiency for Alana and Jone, for taro and fish occurs when the MRS(taro,fish)(Alana) is greater than MRS (taro,fish)(Jone).

Select one:

True

False

Question 7

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The absolute value of the slope of an individual's indifference curve represents the marginal rate of transformation between two goods.

Select one:

True

False

Question 8

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Fiji is well known for its production of sugar and gold. The rate at which Fiji can transform sugar resources into gold production is known as the marginal rate of technological substitution (MRTS).

Select one:

True

False

Question 9

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The marginal rate at which housing resources could be transformed into hospitals is calculated by taking the absolute value of marginal cost of housing dividing by the marginal cost for hospitals.

Select one:

True

False

Question 10

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The first fundamental theorem of welfare economics; (i) all producers are price makers; (ii) only one of all the producers is price maker; (iii) all producers are price takers.

Which of the following statement is correct?

A.Only alternatives (i) and (ii) are true.

B.Only alternative (iii) is true.

C.Only alternative (ii) is true.

D. Only alternative (i) is true.

Question 11

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Suppose we are to assess the efficiency of consuming 2 goods, chicken (c) and fish (f), by Ana (A) and Lola (L). For this case, the necessary condition for pareto efficiency to occur under the first fundamental theorem of welfare economics is

A.

MRTcf = MRScf(A) = MRScf(L)

B.

MRTcf = MRScf(A) + MRScf(L)

C.

MRTcf < MRScf(A) < MRScf(L)

D.

MRFcf > MRScf(A) > MRScf(L)

Question 12

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It is the condition for fairness and the second fundamental theory of welfare economics.

A.

Redistribute initial resource allocation and let people trade freely.

B.

No redistribution of the initial resource allocation and let people trade freely

C.

No redistribution of the initial resource allocation with strong restriction on people trading

D.

Redistribution of the initial resource allocation and people are strongly restricted from trade.

Question 13

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Making decisions by Governments on financing public policies are always an easy task.

Select one:

True

False

Question 14

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Production efficiency level is achieved when MRTS(food) is not equal to the MRTS(clothes).

Select one:

True

False

Question 15

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Consumption efficiency (exchange) is achieved when the marginal rate of substitution for two goods by two people is equal.

Select one:

True

False

Question 16

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A production-mix efficiency is achieved in any point under the PPF.

Select one:

True

False

Question 17

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The first welfare theorem only occurs under this market structure.

A.

Perfect competitive market structure.

B.

Duopoly market structure.

C.

Monopoly market structure.

D.

Monopsony market structure.

Question 18

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It is one of the limitations of the First Theorem of Welfare Economics; (i) competitive markets are not able to achieve efficiency; (ii) an economy is able to provide maximum amount of goods and services that individuals want using existing resources and technology; (iii) it does not clearly discuss equity.

Which of the following statement is correct?

A.

Only alternative (iii) is true.

B.

Only alternative (i) is true.

C.

None of the alternatives (i) to (iii) is true.

D.

Only alternative (ii) is true.

Question 19

The Second Theorem of Welfare Economics argued that: (i) it is not possible for the government to re-distribute the resource endowment; (ii) a perfect competitive market economy will result in an outcome that is efficient and equitable once government re-distribute income in an equitable way; (iii) the Edgeworth box is the common instrument of choice for social welfare analysis.

Which of the following statement is correct?

A.

Only alternative (i) is true.

B.

Only alternative (iii) is true.

C.

All of the alternatives (i) to (iii) are true.

D.

Only alternative (ii) is true

Question 20

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The Edgeworth box is commonly used by economists to study: (i) production efficiency; (ii) consumption efficiency; (iii) both production and consumption efficiencies.

A.

All alternatives (i) to (iii) are true.

B.

Only alternative (i) is true.

C.

Only alternative (iii) is true.

D.

Only alternative (ii) is true.