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Introduction to micro and macro economics questions.

Introduction to micro and macro economics questions.

Find Introduction to micro and macro economics university examination questions in acaproso.com

# Question
1

Mrs Kushoka has to decide how many kilograms of rice and chicken she can buy every month. If Mrs Kushoka has a fixed income of 30 USD/ month and she decides to spend her entire income on rice and chicken.

  1. How many kgs of rice will she buy per month if she decides to buy rice only, when the price for rice is 1USD/kg and chicken 3USD/kd ?
  2. How many kgs of chicken will she buy per month if she decides to buy chicken only, when the price for chicken is 3USD/kg and rice 1USD/kg?
  3. Calculate the marginal utility and total utility for rice and chicken in the table below
Point Quantity Marginal utility Total utility
  Chicken Rice Chicken Rice Chicken Rice Total utility
B 1 27   6 48 558  
C 2 24   8 93 540  
D 3 21   10 135 516  
E 4 18   12 171 486  
F 5 15   18 201 450  
G 6 12   24 225 396  
H 7 9   30 243 324  
I 7 6   36 255 234  
J 8 3   42 261 126  
  1.  Mention one similarity between a budget line and a demand curve

Mathematical Calculation
2

The total economic activity of an economy(value of the country`s total activity) can be calculated using three different approaches.

  1. Why is it important to use either of the approaches and not two or three approaches when estimating the value of a country`s total activity at a specific time period?
  2. Explain the difference between the GDP and the GNP
  3. Mention three macroeconomics tools
  4. Mention three sectors of the economy in the circular flow of income model

Long answers
3

Choose an item from list B and write its number against the number of an item in list A with which it matches closely.

List A List B

 

  1. The scientific aspects of economics that determines “what is”
  2. Utility-concept(what does it mean when we say that something gives us utility?)
  3. Total product is maximum and MP=0
  4. A situation in which quantity demanded is greater than quantity supplied
  5. The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises
  6. A graph of the relationship between the price of a god and the quantity supplied
  7. A graph of the relationship between the price of a good and the quantity demanded
  8. The portion of economics that attempts to address “what should be”?
  9. Shows the relation between inputs and the trade-offs amongst them, without changing the level of total output.
  10. Happens when in a production process, as one variable input is increased, there will be a point at which the margin per unit output will start to decrease,holding all other factors constant.
  11. The scientific aspects of economics that determines “what is”
  12. Two goods for which an increase in the price of one leads to the demand of the other.
  13. Opportunity cost
  14. A legal minimum price at which a good can be sold
  15. The slope of the Isoquant=The slope of the Isocost
  16. Occurs when the cost of producing a given output is as low as possible
  17. Occurs when it is not possible to increase output without increasing inputs
  18. All inputs considered to be variable
  19. Variable and fixed inputs included in production
  20. A curve showing all possible combinations of inputs physically capable of producing a given fixed level of output

 

  1. Production in the short run
  2. Isoquant
  3. Stage III in a short run analysis of a production function
  4. Substitutes
  5. Price floor
  6. Economic efficiency
  7. Shortages
  8. The law of supply
  9. Production in the long run
  10. Optimum point of production
  11. The best of the alternatives forgone when making any decision
  12. Production in the long run
  13. A supply curve
  14. Technical efficiency
  15. MRTS
  16. Positive economics
  17. Normative Economics
  18. Law of diminishing return/ law of diminishing marginal return
  19. Satisfaction derived or expected to be derived from the consumption of goods and services
  20. A demand curve

 


Matching items
4

If there were no scarcity, economics would still give valuable insights.


True OR False
5

Economists always assume rationality


True OR False
6

Points outside the production possibilities frontier are attainable but inefficient


True OR False
7

An advance in production techn ology would cause the production possibilities curve to shift outward


True OR False
8

Macroeconomics is concerned with the study of how households and firms make decisions and how they interact in specific markets


True OR False
9

A perfect competitive market consists of products that are all slightly different from one another


True OR False
10

Economics always make realistic assumptions to simplify analysis


True OR False