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ECO 100 Quiz 1 02 2020 Your Name Your Student Number

This document contains a quiz for an economics course. It includes 10 multiple choice and fill-in-the-blank questions covering fundamental economic concepts like: - Defining total revenue, costs, and profit. - Distinguishing fixed and variable costs. - Explaining economies of scale and increasing returns to scale. - Describing elasticity including price elasticity of demand. - Distinguishing movements along and shifts of demand and supply curves. The quiz questions require students to apply these economic concepts to diagrams and scenarios in order to demonstrate their understanding of important foundational topics in microeconomics.

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45 views12 pages

ECO 100 Quiz 1 02 2020 Your Name Your Student Number

This document contains a quiz for an economics course. It includes 10 multiple choice and fill-in-the-blank questions covering fundamental economic concepts like: - Defining total revenue, costs, and profit. - Distinguishing fixed and variable costs. - Explaining economies of scale and increasing returns to scale. - Describing elasticity including price elasticity of demand. - Distinguishing movements along and shifts of demand and supply curves. The quiz questions require students to apply these economic concepts to diagrams and scenarios in order to demonstrate their understanding of important foundational topics in microeconomics.

Uploaded by

balala
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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ECO 100

Quiz 1 02 2020

Your Name
Your Student Number
WEEK 4 QUIZ QUESTIONS

FILL IN THE BLANKS:

1. We assume that the goal of a business is to make profit.

2. PROFIT = Total revenue minus Total cost .

3. Total Revenue = Price X Quantity .


4. On the diagram below:
a. Label Total Revenue
b. Indicate the point where Total Revenue is Maximised
At this point Price Elasticity of Demand = E< 1inelastic .

5. Total Cost = fixed costs + variable Costs


6. Name an example of each one of the costs after the = sign
in the above equation.
a. Rent and insurance.
b. inputs, wages and electricity .
7.
a. A fixed input does not change as output increases while a
variable input changes when output increases.
b. AVERAGE in Average COST, Average PRODUCT and Average
REVENUE is:
Average COST= Cost per unit of production.

Average PRODUCT=Output per unit of a variable input


holding all other inputs fixed.

Average REVENUE: Revenue per unit of output sold.


8.
a. In the market period supply is increased using stocks of
unsold goods.

b. In the short run supply can be increased using full capacity.

c. In the long run supply can be increased by changing the production


technology by using new improved machines and building new factory.

9.
a. What is the following diagram called? Demand curve

b. Label the point on the curve and the quantity of output


that this business should produce to minimize its costs per
unit of output.
10. Define:
a. Economies of scale.
Economies of scale are cost advantages reaped by companies when
production becomes efficient. Companies can achieve economies of scale by
increasing production and lowering costs. This happens because costs are
spread over a larger number of goods. Costs can be both fixed and variable.
b. Increasing Returns to scale.
Occurs when the output increases by a larger proportion than the
increase in inputs during the production process
WEEK 3 QUIZ QUESTIONS

FILL IN THE BLANKS:


1. Elasticity is the measure of Supply and Demand to a
small change in one of the factors affecting supply or demand.
2. Complete
a. When price changes by a small amount and the quantity
demanded only changes by a smaller amount then the product
is price inelastic. For example people need to buy gasoline to
get to work or travel around the world, and so if oil prices rise,
people will likely still buy just the same amount of gas. .

3. Label each of the following curve:


a. Elastic
b. Inelastic
c. Unit elasticity
4. Elasticity of demand changes along a demand curve label elasticity
of demand on the following curve at each point or range.

5. Factors that generally affect the degree of price elasticity of


demand include: income levels, type of product or service,
availability of substitute.
a. Substitutes: Products with substitutes are two alternative
goods and those without substitutes are complimentary goods
(e.g. electricity or Cigarettes).
b. Complements (e.g. a DVD and DVD player ): A product which is
the cheaper complement to a larger more expensive product
tends to be
c. Necessities: These products have inelastic price elasticities of
demand.
d. Time: if a price rises consumers may have less demand
however given time, they find a necessity, so in the long run
demand is more inelastic .
6. a. If a business’s product has INELASTIC Demand what should the
owner do to increase their Total Sales Revenue (to the Price).
The owner of the business should increase the price.
b. If a business’s product has ELASTIC Demand what should the
owner do to increase their Total Sales Revenue (to the Price)
Reduce the price.
c. Complete: When the elasticity of demand for a product is unit
price elasticity of demand then at this price a business
maximises their output.

WEEK 2 QUIZ QUESTIONS

1. a movement along a curve is called either a change in the


quantity demanded or quantity supplied and is generally
caused by a change in price

2. A MOVEMENT to a NEW CURVE IS CALLED EITHER


AN ……increase in demand
OR decrease in demand
AND IS GENERALLY CAUSED BY A CHANGE IN
Any non-price factor.
3. Label which of the following represents:
a) An increase in demand

b)an expansion of demand

a. an expansion of demand

4. Complete:
FOR DEMAND
a. If the price of a substitute increases then demand for its
substitute also increases.
b. Name two substitutes coca cola and pepsi.
Are all products technically substitutes?......Why
c. If the price of a complement increases then demand for its
complement decreases.
d. If the consumers income increases and the product is a normal
good then demand for it increases.
FOR SUPPLY
e. If Costs of production increase, then supply will decrease.
Complete:
a. When Supply equal demand it is called equilibrium.
b. When Supply is greater than Demand then it is called a
Economic supply and the price of the product will reduce.
c. When Demand is greater than Supply then it is called a
Economic shortage and the price of the product will
increase.

5. Draw c. on the following diagram:

6. Complete. When the Price of product increases:

a. What happens to consumer’s willingness to BUY the product?


it will shy away from buying more of that product.
b. What happens to producer or seller’s willingness to SELL the
product?
Would want to sell more of that product .

WEEK 1 QUIZ QUESTIONS


1. Complete:
a. The economic problem is that a person or country has
unlimited wants but limited resources to produce goods or
services or more resources to buy goods and services.

b. The goal of all consumers is to maximise the total utility


they buy (satisfy) with the smallest amount of money spent.

c. It is assumed that as a person consumes more of one


product each extra product consumed gives them
satisfaction. This is called the Law of diminishing marginal
utility.

d. The goal of businesses is assumed to be that they aim to


maximise profits.

e. When making choices a person must consider benefits the


and the costs and if costs is greater than the benefits then
a person who is rational will not buy the product

f. The cost of the best alternative product not bought and


consumed when we decide to consume a product is called the
opportunity cost for you give up the opportunity to buy the
alternative product.
2.
a. What is the following curved diagram called? Production or
consumption possibility curve.
b. Label on the diagram the opportunity cost of increasing
consumption or production of product X from A to B.
It will saw a shift from point C to D of product Y.

3. What is possible? Impossible? or below our possibilities? on


the following diagram

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