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Multiple Choice (One Point Each)

This document contains an individual assignment that is 50% of the grade. It includes multiple choice questions testing concepts like demand, supply, elasticity, costs of production, and market equilibrium. It also includes essay questions requiring explanation of topics such as substitute and complementary goods, production functions, costs, and market structures. There are also workouts involving calculations of price and income elasticity, production quantities, costs, unemployment rates, and other economic measures. The assignment evaluates a student's understanding of fundamental microeconomic concepts.

Uploaded by

Mulugeta Girma
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86 views4 pages

Multiple Choice (One Point Each)

This document contains an individual assignment that is 50% of the grade. It includes multiple choice questions testing concepts like demand, supply, elasticity, costs of production, and market equilibrium. It also includes essay questions requiring explanation of topics such as substitute and complementary goods, production functions, costs, and market structures. There are also workouts involving calculations of price and income elasticity, production quantities, costs, unemployment rates, and other economic measures. The assignment evaluates a student's understanding of fundamental microeconomic concepts.

Uploaded by

Mulugeta Girma
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Individual assignment 50 %

Multiple choice ( one point each)

1. Demand reflects the quantity that consumers:


A. Want at alternative prices.
B. Need at alternative prices.
C. Are willing and able to buy at alternative prices.
D. Can buy at alternative prices.
2. A price change:
A. Affects the consumer’s ability to buy the good.
B. Affects the consumer’s willingness to buy the good.
C. Changes the tastes of consumers.
D. All of the above.
3. Which one of the following is not held constant in defining the demand schedule?
A. Income
B. prices of related goods
C. prices of the good in question
D. number of consumers
4. A movement along a demand curve can be caused by a change in:
A. Income
B. the price of a substitute or complement
C. expectation about future prices
D. the price of the good in question
5. If a supply curve is a vertical straight line, the value of elasticity of supply (es) is:
A. ∞
B. >1
C. <1
D. 0

Essay (Each one Point)

1. Give an example of a substitute good.


A. What happens to the demand for substitute goods of a commodity when the
price of the commodity falls
B. What will be the effect on the demand for tea if the price of coffee rises?
2. Give two examples of complementary goods.
A. What will be the effect on the demand for ink if the price for pens falls?
3. What do you understand by unrelated goods?
4. When is the market said to be in a state of equilibrium?
5. Explain two types of production function based on time period of production.
6. Explain the relationship between the average product and the marginal product.
7. Explain the relationship between average total cost curve, average variable cost curve,
and marginal cost curve.
8. Explain the concept of marginal cost. Does fixed cost affect marginal cost?
Give reasons.
9. List type of market structure and explain each of them
10. List and explain the difference between macro and micro economics
11. What is inflation and explain type of inflation
12. List and explain types of unemployment

Workout

1. Price per unit of a commodity increases from Birr 5 to Birr 6. As a result, the demand
decreases from 100 units to 80 units. Calculate price elasticity of demand.( 3 point )
2. Demand for a commodity increased from 100 units to 120 units as a result of 10% fall in
its price. Calculate price elasticity of demand.( 3 point)
3. At Birr 5 per unit, a consumer buys 40 units of a commodity and the price elasticity of his
demand is 2. How much will he buy if the price reduces to Birr 4 per unit?( 3 point )
4. Suppose the market demand function for good X is given by Qx = 30 – 2P, and the
supply function for good X is given by Qx = 6 + 4P. Then, calculate the:( 9 point )
A. Market clearing price and quantity respectively.
B. Determine market equilibrium
C. Price and supply elasticity of demand.
5. Assume that the MC of a firm is Birr 40 and its AVC is Birr 50. Identify the stage of
production in which the firm is operating. ( 3 point )
6. Given the cost function of a firm as: C = 128 – 6Q + 2Q 3 + 3Q2, Compute the following (
2 point each )
A. TFC
B. TVC of producing 4 units
C. AVC of producing 4 units
D. ATC of producing 4 units
E. MC of producing the 4th unit
7. The following data refer to the production department of a firm:
A. Number of workers: 1000
B. Wage rate per worker: Birr 25
C. Cost of raw materials used: Birr 15000
D. Rent of factory building: Birr 5000
E. Interest paid: Birr 2000
F. Expenses for fuel: Birr 2000
G. Number of units produced: 700
A. Compute AVC and AC for the firm ( 4 point )
13. Study the following table:
Units of labor employed 1 2 3 4 5 6
Total Product (kg.) 10 24 50 75 95 108
Find out:
A. A. The average product when 6 units of labor are employed.
The marginal product of the 5th unit of labor employed.( 2 point)
14. Complete the following table( 4 point )
Units of Total Product Marginal Product Average Product
Labor (kg.) (kg.) (kg.)
0 —
1 5
2 12
3 21
4 28

15. From the table given below, calculate TFC, TVC, AFC, AVC, AC and MC.( 4 point)
Quantity Produced (Units) Total Cost (Birr)
0 40
1 70
2 95
3 130
4 170
5 220
Hint the TFC= 40

16. Assume the total cost of a producer of a commodity in the short - run is given by the
equation:
TC = 30,000 + 15Q2 + 5Q where: TC = total cost, Q = level of output Using the given
total cost find equations for ( 2 point each)

A. variable costs
B. fixed costs
C. average variable costs
D. average fixed costs
E. average costs
F. marginal costs

17. if there is a total of 15 million population who are currently unemployed , and 33 million
employed ( 2 point)
A. Determine total labor force
B. Determine rate of unemployment
C. Determine rate of employment

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