Test I: For the Course of Introduction to Microeconomics
Name………………………………………..
I.d………………………………………………
1. Except one all of them all are changes the demand curve.
a) Prices of related goods.
b) Expected future prices.
c) Income
d) Population.
e) None of the above.
2. If price changes, the effect is shown by movement along the demand curve, we call this
effect as
a) Supply demand curve.
b) Change in the law of demand.
c) Change in quantity demand.
d) Quantity demand.
3. If the prices of goods and services increased above equilibrium, so what will happen?
a) Excess
b) Shortage.
c) profit
d) Nothing will happen price will adjust itself.
4. Consumers can reach equilibrium under ordinal utility approach, except?
a) MUx⁄Px =MUy/Py
b) MUx/MUy = Px/py
c) MRSxy = Px/Py
d) MUx/Py = MUy/Px
e) None of the above
5. In Economics the goods that satisfy same needs and wants are
a) Inferior goods.
c) Complemantary Goods
b) Substitute goods.
d) Velben goods
6. Pick up the wrong statement.
a) As long as marginal utility is positive, total utility is downward/rising.
b) The consumer will always chooses the point on the budget line, rather than a point
below it.
c) Marginal utility is the change in utility an individual enjoys from consuming an
additional unit of it.
d) An increase in income causes the budget line to shift upward.
e) None of the above
7. If consumers income increases( prices kept constant) the consumer would
a) Move to a higher indifference curve
b) Remain on the same indifference curve
c) Move to a lower indifference curve
d) None of the above
e) Pick out the wrong statement.
8. Is the rate at which one input can be substituted for another without changing the level of
outputs
a) Technical progress
b) Factor intensity
c) Marginal rate of technical substitution
d) Budget line
9. Is one that connects all of the equilibrium points on a consumer indifference map as
income changes
a) Income consumption curve
b) Price consumption curve
c) Engel curve
d) All of the above
10. In economics normal goods are
a) The goods whose demand increases as income increases
b) The goods whose demand decreases as income increases
c) The goods whose demand increases as income decreases
d) The goods whose demand decreases as income decreases.
11.
Part two: Short Discussion (5%)
1. Write and discuss the properties of Indifference Curve.
2. Discuss with the difference between Change in Quantity Demand and Change in
Demand.
Part three: work out (5%)
1) Suppose chaltu is consuming X and Y commodity most of the time. If utility function of
a chaltu is given by U=xy. given price of x is 3, price of y is 2 with the income of
300.find
a) The utility maximizing level of commodities x, and y.
b) The MRSxy at utility maximizing position.
c) The MRSyx at utility maximizing position.
d) The maximum utility.