Program : Academic

Damat Hotel and Business College of Degree Year: 2023

Distance Education
Assignment One
Instructor: Yezena
Course title – Economics

Submission Date:- _____________________

Full Name: -
ID No.:-
Department:-
Coordination Center: -
Instruction I. Choose the correct answer from the given alternatives
1. Which of the following is not one of the three core economic issues that must be resolved?
A. How to produce the goods and services we select C. Who should get the goods and services we produce
B. What to produce with unlimited resources D. What to produce with limited resources
2. The fundamental problem of economics is:
A. The law of increasing opportunity costs. C. How to get government to operate efficiently.
B. The scarcity of resources relative to human wants. D. How to create employment for everyone.
3. In economics, scarcity means that:
A. A shortage of a particular good will cause the price to fall.
B. A production-possibilities curve cannot accurately represent the tradeoff between two goods.
C. Society's desires exceed the want-satisfying capability of the resources available to satisfy those desires.
D. The market mechanism has failed.
4. Given that resources are scarce:
A. A "free lunch" is possible but only for a limited number of people.
B. Opportunity costs are experienced whenever choices are made.
C. Poor countries must make choices but rich countries with abundant resources do not have to make choices.
D. Some choices involve opportunity costs while other choices do not.
5. A consequence of the economic problem of scarcity is that:
A. Choices have to be made about how resources are used.
B. There is never too much of any good or service produced.
C. The production of goods and services must be controlled by the government.
D. The production-possibilities curve is bowed outward.
6. The basic factors of production include:
A. Land, labor, money, and capital. C. Labor and capital.
B. Land, labor, money, and inputs. D. Land, labor, capital, and entrepreneurship.
7. Which of the following is not a factor of production?
A. A psychiatrist C. A bulldozer
B. The $100,000 used to start a new business D. Six thousand hectares of farmland

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8. With respect to factors of production, which of the following statements is not true?
A. Factors of production are also known as resources.
B. In order to produce any good or service, it is necessary to have factors of production.
C. Factors of production include land, labor, capital, and entrepreneurship.
D. Only those resources that are privately owned are counted as factors of production.
9. Which of the following is the best example of land?
A. A factory that produces new goods and services C. The ethanol refined from corn
B. The river water used to float a riverboat casino D. A barber's chair
10. Capital, as economists use the term, refers to:
A. The money needed to start a new business.
B. Final goods that are used to produce other goods and services.
C. Shares or stock issued by businesses. D. The costs of operating a business.
11. The role of the entrepreneur in an economy is to:
A. Bring the factors of production together and assume the risk of production.
B. Work with government planners to determine what goods are produced.
C. Arrange bank financing for the owners of new businesses.
D. Ensure full employment of labor.
12. Economics can be defined as the study of:
A. For whom resources are allocated to increase efficiency.
B. How society spends the income of individuals.
C. How scarce resources are allocated to best meet society's goals.
D. What scarce resources are used to produce goods and services.
13. A production-possibilities curve indicates the:
A. Combinations of goods and services an economy is actually producing.
B. Maximum combinations of goods and services an economy can produce given its available resources and
technology.
C. Maximum combinations of goods and services an economy can produce given unlimited resources.
D. Average combinations of goods and services an economy can produce given its available resources and
technology.
14. Which of the following is an assumption under which the production-possibilities curve is drawn?
A. There is significant unemployment. C. The price level is changing.
B. The supply of resources is fixed. D. Technology is changing.
15. A point on a nation's production-possibilities curve represents:
A. An undesirable combination of goods and services.
B. Combinations of production those are unattainable, given technology and resources.
C. Levels of production that will cause both unemployment and inflation.
D. The full employment of resources to achieve a particular combination of goods and services.
16. Which of the following correctly characterizes the shape of PPC?
A. A straight line indicating the law of increasing opportunity costs applies
B. A straight line when there is constant opportunity costs
C. A line that curves outward when resources are perfectly adaptable in the production of different goods
D. A line that curves inward when resources are perfectly adaptable in the production of different goods.
17. According to the law of increasing opportunity costs:
A. The more one is willing to pay for resources; the larger will be the possible level of production.
B. Increasing the production of a particular good will cause the price of the good to rise.
C. In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly
larger amounts of alternative goods.
D. Only by keeping production constant can rising prices be avoided.
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18. If a country decides to convert automobile factories to tank production, as it was during World War II, but
finds that some auto manufacturing facilities are not well suited to tank production, then:
A. The production-possibilities curve between tanks and automobiles will appear as a straight line.
B. The production-possibilities curve between tanks and automobiles will shift outward.
C. Decreasing opportunity costs will occur with greater automobile production.
D. Increasing opportunity costs will occur with greater tank production.
19. Which of the following is not a basic decision that all nations must confront?
A. Should we have economic growth? C. For whom should goods and services be produced?
B. How should we produce goods and services? D. What goods and services should we produce?
20. In a market economy, the people who receive the goods and services that are produced are those who:
A. Need the goods and services the most. C. Want the goods and services the most.
B. Have the most political power. D. Are willing to pay the highest price.
21. A mixed economy:
A. Is justified by the superiority of laissez faire over government intervention.
B. Utilizes both market and non market signals to allocate goods and services.
C. Relies on the use of central planning by private firms rather than the government.
D. Is one that allows trade with other countries.
22. Supply curve for a normal commodity is______________
A. Positively sloping in own price C. negatively sloping in own prices
B. always horizontal D. vertical in times of excess supplies
23. Supply function of a commodity is best described as
A. the law of supply
B. the functional relationship between supply of the commodity and factors affecting it.
C. positive relationship between price of the commodity and its supply.
D. negative relationship between price of the commodity and its supply.
24. How is the market supply to be determined from the supply curve of individual producers?
A. horizontally sum individual supplies
B. ones needs to know in addition the change in technology
C. adding equilibrium prices and quantities D. vertically sum the individual supplies
25. Which of the following is a correct statement about utility?
A. Utility derived from a good by different consumers is the same.
B. For a person, utility remains same in consuming more of a product.
C. Utility derived from certain consumption does not vary across time.
D. Utility maximization behavior assumes rationality.
26. Which of the following is not among the determinants of price elasticity of demand?
A. Availability of substitutes C. Price range
B. Nature of the commodity D. Equilibrium price and quantity
27. Which one of the following serves as an example of declining total utility?
A. Enjoy lunch until fully satisfied and leave behind leftovers
B. Stop reading a book and start watching TV shows
C. Leaving the football field unsatisfied having still more leisure time
D. Being fed up or getting bored of leisure time
28. Suppose Qd = 200 – 10P and if there are 2000 identical buyers in the market, what is the total demand of the
commodity assuming that price is birr 10?
A. 100 units B. 1000 units C. 2000 units D. None

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29. Which of the following is helpful in stating the law of demand for a commodity?
A. Tastes and preferences of the consumer can be varied
B. Prices of all other goods can be varied
C. There should not be any change in the income of the consumer
D. The law of demand is the same as demand function
30. ____ is the study of the choices people make, without judging those choices.
A) Deductive reasoning C) Positive economics
B) Inductive reasoning D) Normative economics
31. In resource market
A) Firms purchase resources C) Households purchase goods and services
B) Firms sell goods and services D) all
32. Is the imbalance between our wants and the means satisfy these wants
A) Economics B) Input C) Scarcity D) Shortage
33. Which of the following alternative economic system best describes how most economies perform in reality?
A) Command economy C) Traditional economy
B) Mixed economy D) Pure market economy
34. Payments made for capital and land respectively
A) profit and wage C) rent and interest
B) interest and wage D) None
35. In economics observation of the real world, collection of data, and employment of statistical measure are
known as
A) Normative Economics C) Theory economics
B) Descriptive economics D) Policy economics
36. Economics is the study of how to
A) Obtain equal distribution of our limited resources
B) Allocate limited resources to satisfy economic objectives & goals
C) Limit our natural resource D) All

N.B: it a must to attaché this paper with your answers during submission!

Damat Hotel and Business College of Distance Education

| Mobile: 0905515253/0905525354
E-mail: damattcollege@gmail.com P.O.Box: 29379 Addis Ababa, Ethiopia Telegram: Page 4
https://t.me/DamatHotelandBusinessCollege https://t.me/DamatHotelandBusinessCollegeሀ
”A Journey towards Excellence”