Mark the following statements () or ()

Macroeconomics is the study of choices that

individuals and businesses make.

Microeconomics is the study of choices that

individuals and businesses make.
Mark the following statements () or ()

There are four factors of production: land,

labor, capital and factories.

There are four factors of production: land,

labor, capital and entrepreneur.
Mark the following statements () or ()

As the price of fish increases, the quantity

demanded for fish increases.

As the price of fish increases, the quantity

demanded for fish decreases.
Mark the following statements () or ()

As the price of fish increases, the quantity

supplied for fish decreases.

As the price of fish increases, the quantity

supplied for fish increases.
Mark the following statements () or ()

Reducing the cost of production leads to shift

the supply curve to the left

Reducing the cost of production leads to shift

the supply curve to the right
Mark the following statements () or ()

The elasticity coefficient equals to one in elastic

demand

The elasticity coefficient equals to one in unit

elastic demand
Mark the following statements () or ()

If the supply curve is a straight line parallel to

the vertical axis, it is a perfectly elastic supply

If the supply curve is a straight line parallel to

the vertical axis, it is a perfectly inelastic
supply
Mark the following statements () or ()

If the demand curve is a straight line parallel to

the horizontal axis, it is a perfectly inelastic
demand

If the demand curve is a straight line parallel to

the horizontal axis, it is a perfectly elastic
demand
Mark the following statements () or ()

Oligopoly is one of the market structures

consists of large number of firms

Oligopoly is one of the market structures

consists of small number of firms
Mark the following statements () or ()

When price in the market is above the

equilibrium price, there will be shortage in the
market

When price in the market is above the

equilibrium price, there will be surplus in the
market
Mark the following statements () or ()

Marginal utility is the number of units of utility

a consumer gains from consuming a good or
service.

Total utility is the number of units of utility a

consumer gains from consuming a good or
service.
Mark the following statements () or ()

Total utility is the added satisfaction that a

consumer gets from having one more unit of a
good or service

Marginal utility is the added satisfaction that a

consumer gets from having one more unit of a
good or service
Mark the following statements () or ()

The lower a consumer’s total utility, the

greater consumer’s level of satisfaction

The higher a consumer’s total utility, the

greater consumer’s level of satisfaction
Mark the following statements () or ()

Total cost is the additional cost of producing

one more unit of goods or services

Marginal cost is the additional cost of

producing one more unit of goods or services
Choose the correct answer

The basic economic problem is that resources

are ............. and wants are ................
(a) unlimited – limited
(b) limited – unlimited
(c) scarce – limited

Durable goods such as ................

(a) pens (b) cups (c) furniture
Choose the correct answer
The ............. shows all combinations of two
goods that can be produced in the economy
with the available resources.
(a) demand curve
(b) supply curve
(c) production possibility curve (PPC)

The elasticity coefficient ................. in perfectly

inelastic supply.
(a) = zero (b) < 1 (c) > 1
Choose the correct answer
The .............. shows combinations of two goods
that yield equal satisfaction.
(a) demand curve (b) supply curve
(c) indifference curve

............ of demand measures the responsiveness

of quantity demanded to a change in price of
goods and services.
(a) Price elasticity (b) Income elasticity
(c) Cross elasticity
Choose the correct answer
....................... is not the determinant of supply.
(a) Number of producers
(b) Number of consumers
(c) Cost of production

If the quantity supplied of a good is less than

the quantity demanded of it, there will be
............................ in the market.
(a) equilibrium (b) surplus (c) shortage
Choose the correct answer
A good is a ................. good if an increase in
income causes an increase in demand.
(a) substitute (b) normal (c) inferior

In ................ market individuals buy goods and

services through internet.
(a) black (b) virtual (c) physical
Choose the correct answer
In ........... some costs of production are constant
(a) short run (b) long run

In ........... some costs of production are variable

(a) short run (b) long run
 Solving Problems

Find the price elasticity of demand ED =  Q ÷  P

Find the price elasticity of supply Q P

Find the income elasticity of demand ED =  Q ÷  I

Q I

 Q  Py
ED =
Qx ÷ Py
Find the cross elasticity of demand x
 Solving Problems
The following table represents the costs of production
of Ahmed’s company.

Q FC VC TC MC AFC AVC ATC

0 2

1 1

2 1.8

3 4.8

Find the missing values

 Solving Problems
Total Cost = Fixed Cost + Variable Cost
TC = FC + VC

Marginal Cost =  Total Cost ÷  Output

MC = TC ÷ Q

Average Fixed Cost = Fixed Cost ÷ Output

AFC = FC ÷ Q

Average Variable Cost = Variable Cost ÷ Output

AVC = VC ÷ Q

Average Total Cost = Total Cost ÷ Output

ATC = TC ÷ Q
 Solving Problems
The following table represents the costs of production
of Ahmed’s company.

Q FC VC TC MC AFC AVC ATC

0 2 0 2 - - 0 -

1 2 1 3 1 2 1 3

2 2 1.8 3.8 0.8 1 0.9 1.9

3 2 2.8 4.8 1 0.66 0.93 1.6

Find the missing values

 Engine
(000 units)
15
A
14 
 G

12 B

E H
F
9 C

D

6 10 12 13 Computers
(000 units)
The economy has fully utilized all resources
available in the nation if it produces ---------
a) 12,000 engines and 6,000 computers
b) 10,000 computers and 10,000 engines
c) 12,000 engines and 10,000 computers
 Engine
(000 units)
15
A
14 
 G

12 B

E H
F
9 C

D
Computers
6 10 12 13 (000 units)

Referring to point A, the total production of the

Nation is consisted of ---------- and ---------- .
a) 6,000 engines; 14,000 computers.
b) 14,000 engines; 6,000 computers.
c) 14,000 engines; 6,000 computers.
 Engine
(000 units)
15
A
14 
 G

12 B

E H
F
9 C

D
Computers
6 10 12 13 (000 units)
If the production point moved from B to C. What
is the amount of trade off to produce more
computers?
a) 2,000 engine
b) 3,000 engine
c) 3,000 computer
d) 2,000 computer
 Engine
(000 units)
15
A
14 
 G

12 B

E H
F
9 C

D
Computers
6 10 12 13 (000 units)
The unattainable production levels are
represented by points ----------
a) G and H
b) A and E
c) D, E, and F
d) A, B, and C
 Engine
(000 units)
15
A
14 
 G

12 B

E H
F
9 C

D
Computers
6 10 12 13 (000 units)
Producers utilized and managed the factors of
production efficiently if they produce at points ---
a) G and H
b) A and E
c) D, E, and F
d) A, B, and C