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TMA1/ECO232 – Micro Economic Theory II TMA 1 QUESTIONS AND SOLUTION

TMA Quiz Questions

TMA: TMA1/ECO232
ECO232 – Micro Economic Theory II
Mr. Adedeji Abiodun Liadi (aliadi@noun.edu.ng )
1 Within the relevant range, isoquants

A. are negatively sloped
B. are convex to the origin
C. cannot cross
D. are all of the above  

2 In relationship to the total cost of a good, the average cost is equal to

A. the slope of the total cost curve
B. the marginal cost
C. the slope of ray to the total cost  
D. the area under the total cost curve

3 A shortrun in the production is referred to a time when

A. both fixed and variable factor vary
B. only fixed factor exist
C. only variable factor varies  
D. both fixed and variable factor remain constant

4 For goods that are substitutes in consumption the cross elasticity will have a value

A. equal to 1
B. greater than 0  
C. equal to 0
D. less than 0

5 Which of the following is not classied as a barrier to entry

A. the negative economic  
B. government granted-franchise
C. significant economies of scale
D. the control of special resources

6 An ethical or value judgment must be made in order to derive

A. the transformation curve
B. the consumption contract curve
C. the grand utility-possibility curve
D. the social welfare function  

7 Which of the following is not a property of a production function

A. diminishing marginal products
B. fixed inputs
C. constant average product
D. technical efficient input combinations  

8 Which of the following is a function performed by producer

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A. organizing production
B. choosing technology
C. choosing quantities of inputs
D. all of the above  

9 Implicit costs are

A. the self –owned, self- employed factor of production  
B. the value of resources purchased for production
C. the identical to social costs
D. irrelevant since they do not to be paid

10 Which of the following is not true of production functions

A. Inputs may be fixed or variable
B. input combinations must be technically efficient
C. marginal product steadily beyond some points  
D. the law of diminishing return applies to variable input

11 If we have constant returns to scale and we increase the quantity of labor used per unit of time by 10% but keep the amount of capital constant, output will

A. increase by 10%
B. decrease by 10%
C. increase by more than 10%
D. increase by less than 10%  

12 Which of the following industries most closely approximates the perfectly competitive model?

A. Automobile
B. cigarette
C. newspaper
D. wheat farming  

13 The distribution of two commodities between two individuals is said to be Pareto optimal if

A. one individual cannot be made better off without making the other worse off
B. the individuals are on their consumption contract curve
C. the individuals are on their utility-possibility curve
D. all of the above  

14 In deriving the utility-possibility curve, we make interpersonal comparisons of utility

A. Always
B. sometimes
C. never  
D. often

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15 The term “demand” refers to a

A. point
B. quantity
C. curve or schedule  
D. need for good

16 Which of the following factor would least likely to appear as a variable in the demand function

A. price of inputs  
B. income
C. tastes
D. expectations

17 The law of demand implies that

A. as quantity increases, price increases
B. as price increases, quantity increases
C. everyone needs a certain number of items that are classified as necessities
D. price and quantity are inversely related on a demand curve  

18 A change in which of the following items will not cause a shift in the demand curve tyres

A. the price of tyres  
B. the price of automobiles
C. the price of petrol
D. consumers resolves to drive fewer miles per year

19 Which of the following is not a property of the demand curve

A. positive slope  
B. snapshot at one point in time
C. an inverse relationship between price and quantity
D. a shift in the curve when one of the ceteris paribus variables changes

20 In general equilibrium

A. all prices are assumed to be variable  
B. some prices are assumed to be fixed or constant
C. most prices are assumed to constant
D. most prices are assumed to variable

 

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