ECS2602 Exam Pack
ECS2602
MICROECONOMICS
500-Question Exam Preparation Pack
Short-Answer Question & Answer Format
Covers: Demand & Supply | Elasticity | Consumer Theory | Production & Costs
Market Structures | Market Failure | International Trade
Page 1
, ECS2602 Exam Pack
CONTENTS
Basic Concepts — 50 questions
Demand — 46 questions
Supply — 40 questions
Equilibrium — 31 questions
Elasticity — 31 questions
Elasticity Calc — 40 questions
Consumer Theory — 40 questions
Production — 41 questions
Costs — 46 questions
Perfect Competition — 35 questions
Monopoly — 35 questions
Monopolistic Competition — 20 questions
Oligopoly — 20 questions
Market Failure — 25 questions
Page 2
, ECS2602 Exam Pack
BASIC CONCEPTS
Q1. What is economics?
A: The study of how scarce resources are allocated among unlimited wants.
Q2. Define scarcity.
A: A situation where resources are limited relative to unlimited human wants.
Q3. What is opportunity cost?
A: The value of the next best alternative foregone when a choice is made.
Q4. What are the three basic economic questions?
A: What to produce, how to produce, and for whom to produce.
Q5. Define microeconomics.
A: The study of individual decision-making units such as households and firms.
Q6. Define macroeconomics.
A: The study of the economy as a whole, e.g. inflation, growth, unemployment.
Q7. What is a production possibility curve (PPC)?
A: A curve showing maximum combinations of two goods producible with given resources.
Q8. What does a point inside the PPC represent?
A: Inefficient use of resources or unemployment.
Q9. What does a point outside the PPC represent?
A: An unattainable combination given current resources and technology.
Q10. Why is the PPC concave (bowed outward)?
A: Because of increasing opportunity costs as resources are less suited to alternative uses.
Q11. What causes the PPC to shift outward?
A: Economic growth, e.g. more resources or improved technology.
Q12. Define a factor of production.
A: A resource used to produce goods and services.
Q13. Name the four factors of production.
A: Land, labour, capital, and entrepreneurship.
Q14. What is the reward for land?
A: Rent.
Q15. What is the reward for labour?
A: Wages.
Q16. What is the reward for capital?
A: Interest.
Q17. What is the reward for entrepreneurship?
A: Profit.
Q18. Define a market.
A: Any arrangement where buyers and sellers exchange goods or services.
Q19. What is a positive economic statement?
A: A factual, testable statement about what is.
Q20. What is a normative economic statement?
A: A value-based statement about what ought to be.
Q21. Define the ceteris paribus assumption.
A: Holding all other variables constant while examining one variable's effect.
Page 3
ECS2602
MICROECONOMICS
500-Question Exam Preparation Pack
Short-Answer Question & Answer Format
Covers: Demand & Supply | Elasticity | Consumer Theory | Production & Costs
Market Structures | Market Failure | International Trade
Page 1
, ECS2602 Exam Pack
CONTENTS
Basic Concepts — 50 questions
Demand — 46 questions
Supply — 40 questions
Equilibrium — 31 questions
Elasticity — 31 questions
Elasticity Calc — 40 questions
Consumer Theory — 40 questions
Production — 41 questions
Costs — 46 questions
Perfect Competition — 35 questions
Monopoly — 35 questions
Monopolistic Competition — 20 questions
Oligopoly — 20 questions
Market Failure — 25 questions
Page 2
, ECS2602 Exam Pack
BASIC CONCEPTS
Q1. What is economics?
A: The study of how scarce resources are allocated among unlimited wants.
Q2. Define scarcity.
A: A situation where resources are limited relative to unlimited human wants.
Q3. What is opportunity cost?
A: The value of the next best alternative foregone when a choice is made.
Q4. What are the three basic economic questions?
A: What to produce, how to produce, and for whom to produce.
Q5. Define microeconomics.
A: The study of individual decision-making units such as households and firms.
Q6. Define macroeconomics.
A: The study of the economy as a whole, e.g. inflation, growth, unemployment.
Q7. What is a production possibility curve (PPC)?
A: A curve showing maximum combinations of two goods producible with given resources.
Q8. What does a point inside the PPC represent?
A: Inefficient use of resources or unemployment.
Q9. What does a point outside the PPC represent?
A: An unattainable combination given current resources and technology.
Q10. Why is the PPC concave (bowed outward)?
A: Because of increasing opportunity costs as resources are less suited to alternative uses.
Q11. What causes the PPC to shift outward?
A: Economic growth, e.g. more resources or improved technology.
Q12. Define a factor of production.
A: A resource used to produce goods and services.
Q13. Name the four factors of production.
A: Land, labour, capital, and entrepreneurship.
Q14. What is the reward for land?
A: Rent.
Q15. What is the reward for labour?
A: Wages.
Q16. What is the reward for capital?
A: Interest.
Q17. What is the reward for entrepreneurship?
A: Profit.
Q18. Define a market.
A: Any arrangement where buyers and sellers exchange goods or services.
Q19. What is a positive economic statement?
A: A factual, testable statement about what is.
Q20. What is a normative economic statement?
A: A value-based statement about what ought to be.
Q21. Define the ceteris paribus assumption.
A: Holding all other variables constant while examining one variable's effect.
Page 3
