Kotebe university of education science share campus

Economics questions

Submitted by; Eyuel Solomon, 9C

Submitted to; Mr, Abdissa
 I Write ‘TRUE’ if the statement is correct or ‘FALSE’ if
not.
False 1, Microeconomics Studies an economy as a whole and
its aggregates.
True 2, Capitalism is the oldest formal economic system in
the world.
False 3, The reward for entrepreneurship is labour.
False 4, Law of demand states that, ceteris paribus, price of a
commodity and its quantity demanded are not inversely related.
True 5, Economics is both science and an art.
II Choose the best answer from the given alternatives.
C 6, are the chief owners of the factors of
production.
A, Government B, Business firms
C, House hold D, All
D 7, Which statement is correct about market equilibrium
A, Supply = Demand B, Supply < Demand
C, Supply > Demand D, B&C
A 8, Which of the following economic system is
mismatched with it’s features?

A, Capitalism = Strong Role of Government.

B, Socialism = Collective Ownership.
 C, Mixed economy = Co-existence of Public and
Private Sectors.
D, All.
C 9, Which of the following is not correct about Two-
sector circular flow model.
A, It is a closed economy.
B, There is no government sector.
C, There are only three sectors in the economy.
D, Households receive income for their factor services
and spend the entire amount on consumption.
B 10, refers to the physical as well as
mental efforts of human beings in the production and distribution
of goods and services.
A, Land B, Labour C, Entrepreneurship D, Capital
III Fill in the blank space with appropriate answer.
11, Economic resource is a type of resource that is scare to the
society and the amount available is less than the amount of
people who wish to have it at zero price.
12, A growth on PPF along only x-axis or y-axis is called
asymmetric growth .
13, A supply function is a mathematical representation of the
relationship between price and quantity supplied of a commodity.

14, The price at which the quantity demanded of a commodity

equals the quantity supplied is called equilibrium price.
 15, The deductive method proceeds from general to particular. It
involves reasoning from certain principles to the analysis of
specific facts.
Iv Give brief explanation for the following questions.
16, Define the terms Case of Excess Supply and Case of Excess
demand
❖Case of excess supply is occured when the amount of good
that the producers provide is greater than the amount of
people want to buy it.

❖Case of excess demand is occured when the amount of good

that the producers provide is Less than the amount of people
want to buy it.
17, What is the relationship in household and firms in a Two-
sector circular flow model?
❖The house hold provides factor service to the firms and
it receives money from them and totally spend on in
needs or products from firms.
18, List and explain Central Problems of Economies.
➢ Central problems of economy are problems that occur
due to the scarcity of resources. A society must decide
what to produce, how to produce and for whom to
produce
1. What to produce
➢ This question is also known as the problem of the
allocation of resources. It implies that every economy
must decide on the type and quantity of goods to be
produced.
 2. How to produce
➢ This question is also called the problem of choice of
technique. It implies that the economy must choice
techniques to produce goods, either capital intensive or
labour intensive techniques.
3. For whom to produce
➢ This question is also called the problem of the
distribution of the national product of a country. It
implies that the economy must decide for which part of
the society must goods produce, either for basic needs
for the majority poor peoples or luxurious goods for few
rich peoples.
19, list and explain the approaches of studying economics.
1. Positive economics is the approach of studying
economics relaying on facts . It attempts to answer what
was?, what is? And what will be? It studies based on
experiment not judgment.
2. Normative economics is the approach of studying
economics relaying on opinion. It attempts to answer
what should be? It studies based on valued judgment.
20, List the characteristics of command economy?
✓ Collective Ownership
✓ Central Economic Planning
✓ Strong Role of Government
✓ Relative Equality of Incomes