Introduction to Microeconomics Test 21

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Introduction to Microeconomics Test 21

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Weekly Quiz Competition

Question 1
1 / -0

Multiple choice question:
Which of the following is not concerned with the problem of choice?

A
Excessive income

B
Alternative use of resources

C
Unlimited wants

D
Limited (scarce) resources

Solution

When there is excessive income in the economy then a large part of it is spent on consumption of goods and services and its a human tendency that human needs are unlimited, so when the selection is done between various commodities in the market it is very difficult for all the consumers to decide the product being rational so they face problems inchoosing the product.
Question 2
1 / -0

Positive economics involves statements which are ____________.

A
verifiable

B
not verifiable

C
may or may not be verified

D
none of these

Solution

Positive statements refers to those statements that describe matters which have been proven through facts and figures after careful observations and are verifiable.
Question 3
1 / -0

Scarcity of resources exists ___________.

A
at the micro level

B
at the macro level

C
both A & B

D
none of the above

Solution

Scarcity of resources exist at both the macro and micro levels due to never ending human wants. In the situation of scarcity of resources, at macro level, the economy is able to maximize the welfare along with the rapid pace of economic growth. While, at micro level, an individual maximizes his satisfaction as consumers and maximizes his profit as producers.
Question 4
1 / -0

Which of the following is a positive statement?

A
Technology determines changes in price.

B
The fair price should rise.

C
Rate of inflation should be less than 5%.

D
Ethics makes employees reliable.

Solution

A positive statement describes the actual theory and not the expected or believed one. It describes information or raises questions which are based on proven facts and figures. Therefore, technology determines changes in price as it either increases the value of the product or decreases the value of the raw materials which is a positive statement.
Question 5
1 / -0

The following data gives the production possibilities frontier of an economy that produces two types of goods, guns and bread. Read the following table and answer questions.
Production Possibilities Guns Bread
A 0 105
B 10 100
C 20 90
D 30 75
E 40 55
F 50 30
G 60 0
H 30 45
Point D is efficient while point H (30 guns and 45 bread) is inefficient. Why?

A
Point D is outside the PPF while point H is on the PPF

B
Point D is inside the PPF while point H is on the PPF

C
Point D is on the PPF while point H is inside the PPF

D
Nothing can be said
Question 6
1 / -0

Normative economics deals with _____________.

A
facts

B
opinions

C
both (a) and (b)

D
none of the above

Solution

The beliefs of individuals expressed in the form of value judgments based on moral and ethical considerations are termed as normative statements. These statements that describe what ought to be on the basis of ethical considerations are the subject matter of normative economics.
Question 7
1 / -0

Multiple Choice Question:
Slope of production possibility curve is ______________.

A
a straight line

B
convex to the point of origin

C
concave to the point of origin

D
none of these

Solution

The slope of production possibility curve is marginal opportunity cost which refers to the additional sacrifice that a firm makes when they shift resources and technology from production of one commodity to the other. Since resources are use specific, therefore every time when one more unit of a commodity is produced more units of the other commodity is sacrificed that results in increasing marginal opportunity cost which leads to the concave shape of PPC to the origin.
Question 8
1 / -0

Multiple Choice Question:
The opportunity cost of $$100kg$$ of rice produced on a land which can also produce $$80$$ tonnes of wheat is _____________.

A
$$100kg$$ of wheat

B
$$80$$ tonnes of wheat

C
$$8,000$$ tonnes of wheat

D
none of these

Solution

Opportunity cost of production of a commodity refers to the resources which have to be sacrifice in terms of the next best alternative which could have been produced using the same resources.
Therefore, the next best alternative which could be produced on the piece of land mentioned here is 80 tonnes of wheat, which is sacrificed for the production of 100 kg of rice.
Question 9
1 / -0

The problem of 'what to produce' relates to ______________.

A
the choice of technique

B
distribution of income

C
market value of the goods and services

D
the choice of goods and services

Solution

The central problem of "what to produce?" which is faced by the economy where the economy decides the goods that need to be produced in the economy whether consumer or capital goods to satisfy human wants to keep in mind the available resources and state of technology in the economy.
Hence, D is the correct option.
Question 10
1 / -0

The shape of transformation curve is changed by a change in the _____________.

A
opportunity cost

B
total cost

C
marginal opportunity cost

D
none of the above

Solution

Marginal opportunity cost is also known as marginal rate of transformation or slope of production possibility curve which refers to the additional sacrifice that is made in the economy when it shifts resources and technology from production of one commodity to the other. Therefore, the shape of the transformation curve is affected by a change in the marginal opportunity cost.

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Re-Attempt Weekly Quiz Competition

Production Possibilities	Guns	Bread
A	0	105
B	10	100
C	20	90
D	30	75
E	40	55
F	50	30
G	60	0
H	30	45

Introduction to Microeconomics Test 21

Result

Introduction to Microeconomics Test 21

Score

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Rank

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SHARING IS CARING

Question 1

Excessive income

Alternative use of resources

Unlimited wants

Limited (scarce) resources

Solution

Question 2

verifiable

not verifiable

may or may not be verified

none of these

Solution

Question 3

at the micro level

at the macro level

both A & B

none of the above

Solution

Question 4

Technology determines changes in price.

The fair price should rise.

Rate of inflation should be less than 5%.

Ethics makes employees reliable.

Solution

Question 5

Point D is outside the PPF while point H is on the PPF

Point D is inside the PPF while point H is on the PPF

Point D is on the PPF while point H is inside the PPF

Nothing can be said

Question 6

facts

opinions

both (a) and (b)

none of the above

Solution

Question 7

a straight line

convex to the point of origin

concave to the point of origin

none of these

Solution

Question 8

$$100kg$$ of wheat

$$80$$ tonnes of wheat

$$8,000$$ tonnes of wheat

none of these

Solution

Question 9

the choice of technique

distribution of income

market value of the goods and services

the choice of goods and services

Solution

Question 10

opportunity cost

total cost

marginal opportunity cost

none of the above

Solution

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