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ECO802 List of Questions

Latex formatted questions may not properly render

Q1 When analysis income demand, consumer goods and services are grouped into___broad
categories
4
2
3
5

Q2 Price of the product, price of the related goods (subsided) and ____are the major
determinant of the market demand for a good
Quantity of product
Income of the consumers
Price of the product
Quality of the product

Q3 Linear demand function, non -linear demand function and _____or____are the three most
common function of demand function
Cross sectional demand function
Multi-variant or dynamic demand function
Individual demand function
Curves linear demand function

Q4 How many major types of demand are encounter in business decision

4
2
5
3

Q5 The negative slope of the indifference curves is known as____of goods X for good y MRSx, y
Average rate of substation
Marginal rate of substitution
Diminishing rate of substitution
Equal rate of substitution

Q6 The process of ranking of relative desirability of goods and services is known as___ which
assume that more desirable alternative offers more____
Utility
Translates
Completeness
Attractive

Q7 The_____are where faction of production such as land, labor and capital are exchange for
money, whereas the_____are where goods of services are exchange for money
Product market and factor market
Product market and goods market
Factor market and product market
Factor market and good market
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Q8 The major goal of participants in the market is the desire to ____the returns on limited
resources
Minimize
Maximize
Reduce
Monetize

Q9 In the market consumers are out to maximize their _____or____from their limited disposal
income
Quantity of goods services
Services or quantity of goods
Satisfaction or utility
Demand or supply

Q10 Economic data can be classified into two namely

Cross section data time service data
Time series data or cross section data
Cumulative data or disaggregate data
Measurable data or unmeasurable data

Q11 Macroeconomic model are classified into _____

5
2
4
3

Q12 The basic analytical model in any economic analysis consist of ___ basic steps
2
3
4
5

Q13 The short non equilibrium in an economy is based on the assumption that several _____are
held constraint which can bring about change
Variable
Prices
Investment
Employment

Q14 Analysis that focuses on the path that the variable take to reach an equilibrium
(disequilibrium ) is known as___by bringing in time element
Static analysis
Flow analysis
Dynamic analysis
Standard analysis

Q15 Studies that seek to inquire into the forces leading to, maintaining and reestablishing the
equilibrium condition is known as___
Dynamic analysis

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Static analysis
Equilibrium analysis
Flow analysis

Q16 Macroeconomic variable could be distinguished into ____which is important because of the
time element present in all economic variable.
Stock or flow variables.
Non stock or variables flowor stock
stock or variable
flow or variable

Q17 One major short-coming of macroeconomic is that it classify widely varied goods as activity
into one and treated as___
homogenous
double
disaggregated
equal

Q18 Economics studies or analysis based on aggregate qualification and relationship, such as
aggregate consumption and government equilibrium is
Micro economic
Macro- economic
Mino economic
Aggregate economic

Q19 The study of Microeconomics is the study of economics action of___

Broad aggregates
Specific aggregate
Individual households
firms

Q20 The tools of economic analysis are derived from_____

Microeconomics and macroeconomics
Microeconomics and industrial economics
Monetary economics and Microeconomics
Microeconomics and political economics

Q21 Prices in an economic perfect competitive prices production will lead to efficiency in ---------
------------- allocation rules:
4
3
2
5

Q22 profit-maximising firm and perfectly competitive environment would produce that output
level for which marginal cost equals the market price
MC=MP
MP=MC
MC=MR
MRS=MC

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Q23 Efficiency in ------------------------------- is attained at the point where the consumers�??

marginal rate of substitution (MRS) is identical to firms�?? rate of product transformation
(RPT).
Production and consumption
Demand and Supply
Production and Exchange
Production and Investment

Q24 Since conditions of perfect competition are that ------------------------------------------ that is

relevant to firms�?? decisions and price that is relevant to individuals�?? decisions.
Marginal Cost
Marginal Revenue
Marginal Rate of Substitution
Marginal Income

Q25 An interaction between the firm�??s level of production and the individuals�?? utilities
that is not accounted for by the price system is called --------------------------
Production Internality
Production equality
Production unequality
Production Externality

Q26 One of the possible failure of the price system to yield an optimal allocation of resources in
an economy arises from the existence of goods that must be provided on a ---------------------------
basis
Non inclusive
Under Inclusive
Over Exclusive
Non Exclusive

Q27 Goods in a ------------------------------economy are in a perfectly competitive price system

Heterogenous
Monopolistic
Oligopolistic
Homogemous

Q28 Economists believe that a perfectly competitive price system can yield an efficient allocation
of resources.
Partially True
TRUE'
FALSE'
Variables

Q29 A profit-maximising firm, by equating marginal revenue to marginal cost, will not be
willing to produce at the point where price equal to marginal cost.
Income=MC
Price=MC
Labour=MC
MR=MC
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Q30 Efficiency in production and exchange is attained at the point where the consumers�??
marginal rate of substitution (MRS) is identical to firms�?? rate of product transformation
(RPT).
TRUE'
FALSE'
None of the Above
Partially True

Q31 The rate at which one output can be traded for another in the production process- between
any two goods are X and Y and-----------------------------
Input are same for all firms
Output are same for all firms
Input are different for all firms
Output are different for all firms

Q32 The basic conditions of efficiency for a ---------------------------- competitive environment

require rate of trade-off between any two goods and services
Monopsony
Monopolistic
Imperfectly Competitive
Perfectly Competitive

Q33 The allocation problem and the establishment of competitive prices are ----------------
problems.
Single Mode
Tripple Mode
Single-Dual
Dual Mode

Q34 Re-distribution of income from government has ------------ major programmes

4
3
2
1

Q35 Total income from households can be ----------------- as labour income and income from
Capital
Aggregated
Capital
Disaggregated
Inequality

Q36 Income distribution curve has ------ features

Two
Four
Three
Five

Q37 High propensity to ------------- households are more likely to be rich in capital accumulation
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than those with low propensity to ----------------

Save -Save
Consume-Consume
Save-Consume
Consume-Save

Q38 A measure of the inequality is called ---------------------------derived from the Lorenz Graph
Ginni Coeefficient
Gini Equilibrium
Lorenz Table
Gini Coefficient

Q39 Income perfectly equally distributed on the Lorenz curve would be a ----------------- straight
line
Hexagonal
Diagonal
Horizontal
Vertical

Q40 Income distribution of a country can be drawn on the -----------------------------

Lorenz Curve
Lorenz Graph
Lorenz Table
Lorenz Diagram

Q41 With actual output below the full employment output, there is ----------------- and prices are
falling
Inflation Input
Under utilization
Deflation
Constant

Q42 When output is below normal, declining costs would lead to falling---------------------
Income
Prices
Output
Labour

Q43 The behaviour of expectations is crucial to the dynamic adjustment of the economy to
changes ---------------------
Macro and Micro economic policies
Inflation and Growth Policies
Monetary and Fiscal Policies
Foreign and Direct Investment Policies

Q44 The short-run equilibrium of ----------------- affects the current and last period�??s
expected inflation rates
Economic
Theory
Economy
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Income

Q45 The intersection between the aggregate demand and supply curves will determine the short
run inflation rate and level of output
Curve
Lines
Graph
Rate

Q46 Nominal wages adjust to expected inflation because both firms and workers are concerned
with the real wages
Nominal Wages
Income Wages
Real Wages
Standard Wages

Q47 The expected rate of inflation affects both ---------------and -----------------

Demand and Supply
Supply and Demand
Demand and Income
Wholesale and Retail

Q48 The lower the rate of ------------------------ the faster the rate of growth of output, and the
more real money demand rises with increased---------------------
Inflation Input
Inflation Output
Income Inflation
Direct Income

Q49 If the money supply has to be decreasing at 3.1 per cent to ensure monetary equilibrium,
the rate of --------------------- less than the rate of monetary growth
iInflation 4.1 %
Inflation 3.1 %
Inflation 3 %
Deflation 3 %

Q50 If the nominal money stock is increasing at 10 per cent and the rate of inflation is six
percent, the real money supply will be growing at ---------------.
Five Percent
Six Percent
Four Percent
Three Percent

Q51 To maintain a constant real money supply, an increasing nominal money stock has to be
matched by rising prices.
Prices
Income
Inflation
Dividends

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Q52 The economic argument that �??inflation is always a phenomenon�?� is simply an

implication of monetary equilibrium
Economic
Stablization
Price
Monetary

Q53 If the stock of money increases by 5 per cent per year, prices would have to be rising at the
rate of 5 per cent per year to maintain a constant real money supply
Decreasing
Increasing
Constant
All of the Above

Q54 In a static economy, the rate of ------------------ equals the rate of growth of the nominal
quantity of money
Deflation
Variables
Income
Inflation

Q55 The major determinant of employment is increments in output levels, assuming constant ---
------- prices and stable output ------------
Product Prices
Factor Income
Product Income
Factor Prices

Q56 The equilibrium level of national income occurs where aggregate demand is --------------
aggregate supply
greater than
Less than
Equals to
Constant

Q57 The profit-maximising condition for a perfectly competitive firm requires that both
marginal costs of production, marginal revenue product of labour and output prices must be
equal.
Straight Line
Curve
Equal
Direct

Q58 Output depends on labour input in the short run

Long run
International market
Short run
Investment

Q59 The law of diminishing returns exists in any production process for which ------------------- is

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the only variable input.

Government
Man days
Income
Deflation

Q60 Employment is a function of the level of ---------------- and national income.

Income
Output
Input
Inflation

Q61 The major goals of monetary policies are___

3
5
4
6

Q62 Shifts in the LM curve occurs as a result of changes in the underlying ___or ___
Money supply or money demand
Money in circulation or Demand for money
Money demand or Money Demanded
Monetary policy or Money demand

Q63 The General equilibrium requires simultaneous equilibrium in both commodity market
and___
Money market
Goods Market
Services market
Services market

Q64 The inclusion of Government expenditure G and net trade balance (X-M) into the simple
simple income determination model is called the expanded ___
Unitary equilibrium model
General equilibrium model
Modern equilibrium model
Quantitative equilibrium model

Q65 Given a consumption function C = 20+ 0.8Y and investment expenditure I + 60 for a given
period determine equilibrium income___
400
300
500
250

Q66 In a simple economy without Government Aggregate demand is given as___

Y = C+I
Y =C+S
Y = C+G
Y = C+T
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Q67 The autonomous saving function �??So is considered a ___

Plus saving
Autonomous
Saving
Dissaving

Q68 The changes in consumption brought about by changes in income is known as___
Average propensity to consume
Total propensity to consume
Marginal Propensity to consume
Consumption function

Q69 The consumption function is determined by the disposable income that is___after___
Income -Taxes
Income +Taxes
Income+ Government
Income

Q70 The solutions to an optimisation or Minimisation in Linear programming is based

on___number of assumptions
5
3
2
4

Q71 The Marginal cost MC, is the derivative of the cost function with respect to output
mathematically give as ___
MC= dQ/dC
MC =dC/dQ
MC= C/Q
MC = Q/C

Q72 Accounting cost=Total Variable Cost(TVC) +Total Fixed cost(TFC), where, economics cost
=___
Variable costs + Opportunity costs
Fixed Cost + Opportunity cost
Accounting costs + Opportunity costs
Total Costs + Accounting costs

Q73 The expected returns from the second best use of an economic resource which is forgone
due to scarcity of the resource is known as___ or ___
Opportunity cost or Alternative cost
Substitution Cost or Replacement cost
Missed Opportunity or foregone cost
Replacement cost or alternative cost

Q74 The quantity of inputs multiplied by their respective prices will give the monetary value or
the___ or production which is important in business decision making
Production value
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Production prices
Cost of Production
Product cost

Q75 In production, cost minimising firms are said to substitute relatively cheaper k inputs for
more expensive ones, which is known as ___of relative input-price changes
Replacement effect
Multiplication effect
Exponentiation effect
Substitution effect

Q76 The two instruments in the maximisation of output are the ___ and ___ , often referred to as
the Budget constraint line
Cost and production curve
Isoquants curve and Isocost line
Isocost curves and Isoquant line
Isoquant lines isocost curves

Q77 When all inputs are increased in the same proportion (k) and output also increases in the
same propotions (k) the production function is said to be ___of degree 1 or constant ___
Homogeneous or return to scale
Variable or return scale
Famous or scale returns
Degree one or return to scale

Q78 The Cobb-Douglas Production function has ___important propeties

4
2
5
1

Q79 In the short-run the production function is referred to as___and written as Q= f( L)

Double variable production function
No variable production function
Production function
Single variable production function

Q80 The production function is concerned with relationship between___and___in physical terms
People and goods
Goods and people
Inputs and outputs
Labour and time

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