ECO401 Quiz

Question # 1 of 15 ( Start time: 03:16:39 PM ) Total Marks: 1
In a free-market economy, the allocation of resources is determined by:
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Votes taken by consumers.
A central planning authority.
Consumer preferences.
The level of profits of firms.

Question # 2 of 15 ( Start time: 03:17:18 PM ) Total Marks: 1
Marginal utility is best described as:
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The additional satisfaction gained by consumption of the last good.
The per unit satisfaction of the good consumed.
The total satisfaction gained from the total consumption of the good.
The change in satisfaction from consuming one additional unit of the good.

Question # 3 of 15 ( Start time: 03:17:43 PM ) Total Marks: 1
The numerical measurement of a consumer’s preference is called:
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Satisfaction.
Use.
Pleasure.
Utility.

Question # 4 of 15 ( Start time: 03:17:56 PM ) Total Marks: 1
The demand for chicken is downward-sloping. Suddenly the price of chicken rises from Rs. 130 per kg to Rs. 140 per kg. This will cause:
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The demand curve of chicken to shift to the right.
The demand curve of chicken to shift to the left.
Quantity demanded of chicken to increase.
Quantity demanded of chicken to decrease.

Question # 5 of 15 ( Start time: 03:18:19 PM ) Total Marks: 1
More output could be produced with available resources if:
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Resources are allocated efficiently.
Resources are imperfectly shiftable among alternative uses.
Prices are reduced.
The economy is operating at a point inside the production possibilities curve.

Question # 6 of 15 ( Start time: 03:18:52 PM ) Total Marks: 1
If the supply of a product decreases and supply curve shifts leftward, and the demand for that product simultaneously increases and demand curve shifts rightward, then equilibrium:
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Price must rise.
Price must fall.
Quantity must rise.
Quantity must fall.

Question # 7 of 15 ( Start time: 03:19:41 PM ) Total Marks: 1
You observe that the price of houses and the number of houses purchased both rise over the course of the year. You conclude that:
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The demand for houses has increased.
The demand curve for houses must be upward-sloping.
The supply of houses has increased.
Housing construction costs must be decreasing.

Question # 8 of 15 ( Start time: 03:20:27 PM ) Total Marks: 1
Production possibilities analysis assumes that:
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Resources and technology increase with production.
Resources are used to produce thousands of goods.
Extra resources are saved for emergency use.
Resources are used in a technically efficient way.

Question # 9 of 15 ( Start time: 03:20:52 PM ) Total Marks: 1
Consider two commodities X and Y. If the cross-elasticity of demand is positive, it means the goods are:
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Independent.
Complements.
Substitutes.
Inferior.

Question # 10 of 15 ( Start time: 03:21:38 PM ) Total Marks: 1
According to the law of diminishing marginal utility, as the consumption of particular good increases:
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Total utility increases.
Marginal utility increases.
Total utility decreases.
Marginal utility decreases.

Question # 11 of 15 ( Start time: 03:22:08 PM ) Total Marks: 1
Assume that the current market price is above the market clearing level. We would expect:
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A shortage to accumulate.
Downward pressure on the current market price.
Upward pressure on the current market price.
Lower production during the next time period.

Question # 12 of 15 ( Start time: 03:22:49 PM ) Total Marks: 1
A nation's production possibilities curve is "bowed out" from the origin because:
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Resources are not perfectly shiftable between productions of the two goods.
Capital goods and consumer goods utilize the same production technology.
Resources are scarce relative to human wants.
Opportunity costs are decreasing.

Question # 14 of 15 ( Start time: 03:24:20 PM ) Total Marks: 1
A normative economic statement:
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Is a statement of fact.
Is a hypothesis used to test economic theory.
Is a statement of what ought to be, not what is.
Is a statement of what will occur if certain assumptions are true.

Question # 15 of 15 ( Start time: 03:24:38 PM ) Total Marks: 1
If utility remains the same for original and new combination of goods consumed, the effect of a change in the price of a good on the quantities consumed will be called as:
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Substitution effect.
Real income effect.
Income effect.
Budget effect.