Introduction to Microeconomics Test

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Introduction to Microeconomics Test - 10

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Weekly Quiz Competition

Question 1
1 / -0.25

The problem of growth in an economy means

A
Having limited goods and services to enjoy a high standard of living

B
Having more goods and services to enjoy a high standard of living

C
Having enough goods and services to enjoy a high standard of living

D
Having same goods and services to enjoy a high standard of living

Solution

Economic growth is the increase in the inflation-adjusted market value of the goods and services produced by an economy over time. The "rate of economic growth "refers to the geometric annual rate of growth in GDP between the first and the last year over a period of time.
Question 2
1 / -0.25

Improvement in technology shifts PPC to the right because

A
Economy ’s capacity to produce decreases

B
Individual ’s capacity to produce increases

C
Economy ’s choice to produce increases

D
Economy ’s capacity to produce increases

Solution

The most common reason a PPF would shift is because of a change in technology, or because of economic growth. Everything else held constant more goods can be produced after the technological change.
Question 3
1 / -0.25

A correct example of growth of resources is

A
Increase in consumption

B
Increase in production

C
Increase in capital formation

D
Improvement in technology

Solution

Economic growth is an increase in what an economy can produce if it is using all its scarce resources. An increase in an economy 's productive potential can be shown by an outward shift in the economy 's production possibility frontier.
Question 4
1 / -0.25

If many people die due to an earthquake, it will shift the country ’s PPC to the

A
Not affected

B
Can ’t say

C
Left

D
Right

Solution

Severe earthquake in a country leads to decline in both human as well as capital resources. As a result of which less resources are left for producing the goods. Thus decline in resources will lead to a leftward shift in the PPC.
Question 5
1 / -0.25

If many people die due to a flood, it will shift the country ’s PPC to the

A
Right

B
Left

C
Can ’t say

D
Not affected

Solution

Severe flood leads to a decline in both human as well as capital resources. As a result less resources are left for production, thus result in leftward lift in PPC
Question 6
1 / -0.25

If there is a recession, it will shift the country ’s PPC to the

A
No effect

B
Left

C
Right

D
Can ’t say

Solution

During a recession (where all resources are not being utilized), then a movement out to the production possibility curve has no real opportunity cost.
Question 7
1 / -0.25

Massive unemployment shifts the PPC to the

A
Can ’t say

B
Right

C
Left

D
No effect

Solution

The point on the PPC where the economy was producing earlier will shift below the PPC. This is because unemployment implies inefficient use of resources and this inefficient use of resources depicted by shifting the point below PPC.
Question 8
1 / -0.25

For a farmer increasing sacrifice of potatoes for each unit of onions will produce _______ shape of his PPC.

A
Concave

B
Hyperbola

C
Straight

D
Convex

Solution

Marginal opportunity cost is defined as the amount of one good that needs to be given up in order to increase the production of the other good by one unit. It is calculated as Units of good one sacrificed/ units of the other good obtained. PPC is concave to origin because marginal opportunity cost increase due to law of diminishing returns.
Question 9
1 / -0.25

What is the SI unit of impulse?

A
N/m

B
N.s

C
N/m²

D
Kg.m

Solution

The SI unit of impulse is Newton second. It is given by the linear momentum due to the vector change. This produces an impulse in the same direction with respect to a given time.
Question 10
1 / -0.25

A tutor earns Rs. 1000 per hour teaching economics. If he joins a school, he would earn on an average Rs. 300 per hour. What is the opportunity cost of teaching in school?

A
Rs. 300

B
Rs. 700

C
Rs. 1000

D
Rs. 1300

Solution

Opportunity cost is the profit lost when one alternative is selected over another. The concept is useful simply as a reminder to examine all reasonable alternatives before making a decision.

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Re-Attempt Weekly Quiz Competition

Introduction to Microeconomics Test - 10

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Introduction to Microeconomics Test - 10

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Question 1

Having limited goods and services to enjoy a high standard of living

Having more goods and services to enjoy a high standard of living

Having enough goods and services to enjoy a high standard of living

Having same goods and services to enjoy a high standard of living

Solution

Question 2

Economy ’s capacity to produce decreases

Individual ’s capacity to produce increases

Economy ’s choice to produce increases

Economy ’s capacity to produce increases

Solution

Question 3

Increase in consumption

Increase in production

Increase in capital formation

Improvement in technology

Solution

Question 4

Not affected

Can ’t say

Left

Right

Solution

Question 5

Right

Left

Can ’t say

Not affected

Solution

Question 6

No effect

Left

Right

Can ’t say

Solution

Question 7

Can ’t say

Right

Left

No effect

Solution

Question 8

Concave

Hyperbola

Straight

Convex

Solution

Question 9

N/m

N.s

N/m2

Kg.m

Solution

Question 10

Rs. 300

Rs. 700

Rs. 1000

Rs. 1300

Solution

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N/m²