test I micro accounting

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Jigjiga University CBE
Department of Economics
Test I for the course Microeconomics
Program: Accounting Extension Students 1st year iii semester
Name……………………………………………..
I.D………………………………………………
Section………………….
Part I: choose the best Answer (1%)
1. The value of the best alternative sacrificed when taking an action
a. Scarcity
b. Opportunity cost
c. Production possibility curve.
d. None of the above.
2. 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
3. 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.
4. Except one all of them all are changes the demand curve.
a. Prices of related goods.
c) income
b. Expected future prices.
d) Population.
a) None of the above.
5. Labor, human capital, entrepreneurship and capital all are the examples of?
a. Public goods
b. Inferior goods
c. Factors of production
d. Output
e. Substitution in production
6. Is the rate at which one input can be substituted for another without changing the level of
outputs
a. Technical progress
c. Marginal rate of technical
b. Factor intensity
substitution
d. Budget line
1
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
8. 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.
9. Is one that connects all of the equilibrium points on a consumer indifference map as
income changes
a. Income consumption curve
c. Engel curve
b. Price consumption curve
d. All of the above
10. In Economics the goods that satisfy same needs and wants are
a. Inferior goods.
b. Complementary goods.
c. Substitute goods.
d. Velben goods.
e. None of the above.
11. the study of the behavior of individual households, firms, and governments; the choices
they make; and their interaction in specific markets
a. macroeconomics
b. microeconomics
c. International economics.
d. Financial economics
Part II: short discussion (2.5%)
1. List and discuss the properties of indifference curve
2. Discuss with the difference between Change in Quantity Demand and Change in
Demand.
Part III: work out (5%)
1. The demand for bottled water in a small town is as follows
Price per bottle
Quantity
1.00
500
1.50
400
2.00
300
2.50
200
3.00
100
Determine
2
a. Calculate the price elasticity of demand for bottled water for a price rise from
$1.00 to $1.50? Is demand elastic or inelastic for this price change?
b. Calculate the price elasticity of demand for a price rise from $2.50 to $3.00. Is
demand elastic or inelastic for this price change?
2. 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 maximum utility.
3
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