ECN 201 MID SEMESTER TESTBy Hassan Egbetunde / November 29, 2023 Welcome to your ECN 201 MID SEMESTER TEST ___________________ is a graph that shows all of the different combinations of output that can be produced given current resources and technology. __________ is the additional satisfaction a consumer derives from an additional unit of a commodity consumed by him when the level of consumption of all other commodities are held constant. The law of ___________________ states that as more and more units of a particular commodity is consumed during a specific period of time, total utility increases, but at a diminishing rate. When the price of a commodity rises from N8 to N10, the quantity demanded decreases from 500 units to 400 units. The coefficient of arc price elasticity of demand is ________ . Another name for marginal utility theory is ___________________________ theory. ____________________ joins together all points representing different combinations of two goods which yield equal utility to the consumer. An indifference curve is …………………….. to the origin. The consumer’s _________________ refers to the actual quantity of goods and services that he can buy. For a rational consumer, a fall in the price of a normal commodity will lead, all things being equal, to __________________ in quantity demanded. An inward shift in supply or decrease in supply lowers the equilibrium price as well as ____________________ . Given the table below, the income elasticity of demand is ______________. Given that Quantity supplied = 5p – 25 and Quantity demanded = 2p + 24 the equilibrium price is _______________. __________________________ refers to the locus of points each showing the different combinations of two substitutes which yield the same level of satisfaction to the consumer. The three types of supply are joint supply, ____________________ and composite supply. Production possibility curve illustrate …………………. Scarcity Choice Scarcity and trade offs Elasticity An indifference curve in consumer behavior is synonymous to _______ in the production process. _______ demand applies to commodities which are demanded as direct result of need for another. When two goods are substitutes, a decrease in the price of one leads to ____ in the quantity demanded of the other. Mr. Nelson needs a television and a refrigerator, each cost N 10,000, the exact amount he has, If he buys the television the refrigerator would be regarded as the marginal cost inferior item opportunity cost supplementary cost prime cost The basic concern of economist is to create human wants satisfy all human wants redistribute income so that it is used correctly create perfect competition allocate scarce resources to satisfy human want. Choice is necessary because resources are available can be found everywhere are constant are scarce are unlimited. According to the Cardinalist approach to utility Utility can be: put in order or degrees measured or calculated classified Utility can be erased The slope of indifference curve is called the Marginal Rate of: technical substitution (MRTS) substitution (MRS) production substitution(MRPS) production efficiency(MRPE) A vertical demand curve represents, Perfectly elastic Perfectly inelastic Inelastic Unitary elasticity Which of these is concerned with ordering of consumer utility? Cardinal utility approach Production utility approach Consumer behavior approach Ordinal utility approach When an indifference curve shift to the right, then, The consumer is on lower level of satisfaction Medium level of satisfaction Higher level of satisfaction He is at equilibrium point Change in quantity demanded along the demand curve is referred to as: Price elasticity of demand Income elasticity of demand Cross elasticity of demand Cross-price elasticity of demand The relationship between price and quantity supplied is: Negative Positive Neutral Greater than infinity Identify the correct statement, Quantity demamnded of an inferior good: increases with increase in income is infinite with increase in income decreases with increase in income increases with increase in price Identify the correct statement. In the case of inelastic demand, There is a greater change in demand but a lower change in price A large change in price will not affect quantity demanded A large increase in price will result in lower quantity demanded A large change in price will result in proportional change in quantity The costs that have nothing to do with rational decision-making is known as ____ total cost variable cost sunk cost opportunity cost Allocations of resources imply that decisions must be made, which in turn involves _________ scarcity choice scale of prefence wants The change in utility derived from the consumption of one more unit of a commodity is called ___________ marginal utility total utility additional utility ordinal utility The ________ effect is the fact that as the price of a commodity increases, consumers will buy less of it and more of other commodities. income substitution efficiency utility The law of ___________________ states that as more and more units of a particular commodity is consumed during a specific period of time, total utility increases, but at a diminishing rate. The assumption of _____________ in consumer choice expects that if A>B and B>C, then A>C. ____________________ joins together all points representing different combinations of two goods which yield equal utility to the consumer. A consumer maximizes his satisfaction at the point where the indifference curve is just tangent to the ______________________ . __________ is defined as all the people who live under one roof and who take joint economic decision. For a rational consumer, a fall in the price of a normal commodity will lead, all things being equal, to __________________ in quantity demanded. A higher indifference curve is contains ……………………. Utility than a lower one. Less greater no supply Price theory comprises of the theory of demand and theory of ……………… ____________ is an economic system in which the members of the society had a large measure of economic freedom to engage in any economic activity. An example of perfectly inelasticity is __________ land income price supply Given that quantity demanded in January was 200 units when price was N10. But when price was N12 in February, the quantity demanded was 150 units. Calculate the price elasticity of demand. 1 1.25 1.5 2 Demand is inelastic when: EP is less than 1 EPis greater than 1 EP is infinity EP is equal to 1 Unit elasticity of supply occurs when change in quantity supplied equals ……… in price. The equation MUx/MUy = Px/Py, shows marginal utility theory of price Consumers optimal utility level Utility maximimization equation Diminishing marginal utility equation What will happen if price ceiling is set below equilibrium price? surplus of goods scarcity of goods increase in price market equilibrium Normative economics means Positive statement based on facts Opinions based on personal value Positive statements based on value Opinion based on personal experience If a consumer is rational and consistent, he will aim to ……. His utility within the limit of his income straight- jacket minimize maximize circulate The classical economist that defined economics as science of material wealth is …………….. The Neo Classical economist that defined economics as study of mankind in the ordinary business life is ………………………… Two goods are substitutes when: An increase in the price of one leads to an increase in the quantity demanded of the other An increase in the price of one leads to a decrease in the quantity of the other A decrease in the price of one leads to an increase in the quantity demanded of the other None of the above The equilibrium price clears the market, it is the price at which: Everything is sold Quantity demanded equals quantity supplied Excess demand is zero B and C The Cardinal approach claims that utility can be measured in: Monetary value meters value utils value Euro/Dollar value The main function of the price system is to: Distribute resources equally among competing ends Allocate goods and services equally Ensure efficient allocation of resources in the economic system Minimize cheating A vertical demand curve represents, Perfectly elastic Perfectly inelastic Inelastic Unitary elastic The fundamental economic problems of every society arises as a result of ………… The study of economics may not be suitable without: scarcity choice scarcity and choice capitalism Time's upTime is Up!
