JJU CBE Department of Economics
Final exam for the course Microeconomics (summer students)
Name………………………………………
I.d…………………………………………..
Time allowed: 1:15
Part one: choose the best answer (30%)
1) Is one that connects all of the equilibrium points on a consumer indifference map as price
changes
a) Income consumption curve
b) Price consumption curve
c) Engel curve
d) All of the above
2) The additional revenue the firm receives after selling extra out put
a) Marginal cost
c) Total revenue
b) Average revenue
d) marginal revenue
3) It’s the body of economic knowledge answering economic questions begins with what is
a) Normative economics
c) scarcity
b) Positive economics
d) choice
4) The negative slope of indifference curve implies
a) The two goods (x and y) are substitable for each other.
b) The MRS decreases along the X axis.
c) The consumer is indifferent between any two commodities.
d) All of the above.
5) Inputs whose usage doesn’t changes(constant) as the level of output changes are
a) Fixed inputs
c) constant inputs
b) Variable inputs
d) all of the above
6) 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) Moves downward along the initial indifference curve.
7) In economics those goods whose quantity demand increase as income of the consumer
increase are called
a) Normal goods
b) substitute goods
b) Inferior goods
d) complementary goods
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8)
It is the amount of good Y that the consumer would give up to obtain one more unit of
good X while holding utility constant.
a) Technical progress
b) Factor intensity
c) Marginal rate of substitution
d) Budget line
9) The physical relationship between inputs and output
a) Production function
c) Budget line
b) Consumer function
d) None of the above
10) in the production of automobiles, the factory and the assembling lines are the examples of
a) labor
c) land
b) capital
d) entrepreneurship
11) The satisfaction that the consumer can derive/get by consuming goods and services at
specific period of time is
a) Marginal utility
b) Engel curve
c) Utility
d) Total utility
12) If price is rise above equilibrium what is happen
a) Shortage
b) Surplus
c) A and B are answers.
d) None of the above
13) 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
14) The long run is defined as
a) A period long enough so that at least one factor of production is variable.
b) A period long enough so that at least one factor of production is fixed.
c) A period long enough for a firm to figure out how to maximize profit.
d) A period long enough that all factors of production can be varied.
15) the per-unit cost that the firm incurs to produce output is called
a) Average cost
c) variable cost
b) Marginal cost
d) total cost
16) 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
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17) When the long run average cost is declining the firm is experiencing
a) Diseconomies of scale.
b) Economies of scale.
c) Financial crisis
d) Constant economies of scale
e) B and d are answers
18) Payments for which there is no direct money transfer is
a) Explicit cost
c) Implicit cost
b) Economic cost
d) Variable cost
19) The return for capital in using of an input is
a) Interest.
b) Profit
c) Wage
d) Rent.
20) If price changes the effect is shown by the movement along the supply curve, we call
these effect as
a) Supply curve
b) Change in supply demand curve
c) Change in quantity supply
d) Change in supply
Part Two: discussion part (5%)
1) Briefly discuss with the properties of indifference curve.
2) Write and discuss with the assumptions of Ordinal utility.
3) Try to differentiate the difference between quantity demand and Change in quantity
demand?
Part three: Work out (5%)
1. Given the Total utility function by TU = 20X + 14X2 – (2/3)X3 find
a) The marginal utility function?
b) The point of diminishing marginal utility?
c) The satiation point?
2. If the market demand for shoe in jijiga town is given by Qd = 100-2p and its market
supply is also given by Qs = 50+4p, find
a) Equilibrium price.
b) Equilibrium quantity
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