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ECC101 - Examination Paper - June 2018
Introduction to Micro-economics (Nelson Mandela University)
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Module Code: ECC101 / ECS101 / PFEE201/ECSV101 Page 1 of 1910
SECTION A – MULTIPLE CHOICE QUESTIONS
1) The economic problem arises because of the coexistence of
A) unlimited wants and limited money in circulation.
B) unlimited wants and limited resources.
C) unlimited wants and unlimited resources.
D) unlimited wants and unlimited money in circulation
2) Which one of the following statements is INCORRECT?
Microeconomics studies
A) total production of beer in the economy.
B) total output of oranges in Fort Beaufort.
C) increases in the prices of bananas.
D) the total production of all goods and services.
3) What are the four categories into which factors of production are grouped?
A) profit, wages, rent, and interest
B) land, labour, capital, and entrepreneurship
C) capital, human capital, land, and labour
D) entrepreneurship, profit, labour, and wages
4) If there are three suppliers of furniture, namely Tables Co., Home Inc. and Le House,
and they produce 57 furniture pieces, 30 furniture pieces and 120 furniture pieces
respectively, what is the market supply of furniture?
A) 30 pieces of furniture
B) 57 pieces of furniture
C) 120 pieces of furniture
D) 207 pieces of furniture
5) Thando likes to drink Coca-Cola. Which of the following is not a determinant of his
demand for Coca-Cola?
A) The decrease in the price of Pepsi
B) Health magazines that say Coca-Cola is very unhealthy
C) Thando’s income
D) The supply of Coca-Cola
6) Production efficiency can be defined as
A) producing outside the production possibilities frontier.
B) minimizing opportunity cost.
C) being able to produce more of one good only if less of another is produced.
D) providing for the immediate needs of the greatest proportion of the population.
7) Opportunity cost is expressed in a production possibilities frontier (PPF) by a movement
A) from the region within the PPF to a point on the PPF.
B) from the region within the PPF to the region outside of the PPF.
C) from the region outside of the PPF to a point on the PPF.
D) along the PPF where to gain more of one good it is necessary to give some of
another good.
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Module Code: ECC101 / ECS101 / PFEE201/ECSV101 Page 2 of 1910
8) The principle of decreasing marginal benefit indicates that as the consumption of
magazines increases, a person
A) obtains less satisfaction than if he or she had fewer magazines.
B) is willing to forego more of other goods or services to acquire another magazine.
C) is willing to pay increasingly more for another magazine.
D) willing to pay less for another magazine.
9) Allocative efficiency occurs when
A) we cannot produce more of any good without giving up some other good that we
value more highly.
B) we cannot produce more of any one good without giving up some other good.
C) marginal benefit exceeds marginal cost.
D) opportunity costs are decreasing.
10) The opportunity cost of producing one ton of wheat for Country A is 4 tons of corn. The
opportunity cost of producing one ton of wheat for Country B is 8 tons of corn. Which
country has the comparative advantage in the production of wheat?
A) Country A
B) Country B
C) Neither country has a comparative advantage.
D) Both countries have the comparative advantage.
11) Suppose that a typical German factory can produce 20 cameras or 1 computer in an
hour, and that a typical American factory can produce 10 cameras or one computer in an
hour. If Germany produces one less computer and switches resources to cameras, and
the United States produces one more computer and takes resources out of cameras,
then the net change in camera production in both countries taken together is
A) 0.
B) minus 10 cameras.
C) plus 10 cameras.
D) plus 20 cameras.
12) The "law of demand" predicts that, other things being equal,
A) an increase in the price of CDs decreases the demand for CDs.
B) a decrease in the price of gasoline decreases the quantity of gasoline demanded.
C) an increase in the price of pizza decreases the quantity of pizza demanded.
D) an increase in the price of coffee decreases the quantity of tea demanded.
13) When the price of a good falls, ceteris paribus, the income effect for an inferior good
implies that people will buy
A) less of that good because the relative price of the good has fallen.
B) more of that good because the relative price of the good has risen.
C) less of that good because they can afford to buy more of the things they
previously bought.
D) more of that good because they can afford to buy more of the things they
previously bought.
Downloaded by Anelisa Mqadi ()
ECC101 - Examination Paper - June 2018
Introduction to Micro-economics (Nelson Mandela University)
Scan to open on Studocu
Studocu is not sponsored or endorsed by any college or university
Downloaded by Anelisa Mqadi ()
, lOMoARcPSD|56497240
Module Code: ECC101 / ECS101 / PFEE201/ECSV101 Page 1 of 1910
SECTION A – MULTIPLE CHOICE QUESTIONS
1) The economic problem arises because of the coexistence of
A) unlimited wants and limited money in circulation.
B) unlimited wants and limited resources.
C) unlimited wants and unlimited resources.
D) unlimited wants and unlimited money in circulation
2) Which one of the following statements is INCORRECT?
Microeconomics studies
A) total production of beer in the economy.
B) total output of oranges in Fort Beaufort.
C) increases in the prices of bananas.
D) the total production of all goods and services.
3) What are the four categories into which factors of production are grouped?
A) profit, wages, rent, and interest
B) land, labour, capital, and entrepreneurship
C) capital, human capital, land, and labour
D) entrepreneurship, profit, labour, and wages
4) If there are three suppliers of furniture, namely Tables Co., Home Inc. and Le House,
and they produce 57 furniture pieces, 30 furniture pieces and 120 furniture pieces
respectively, what is the market supply of furniture?
A) 30 pieces of furniture
B) 57 pieces of furniture
C) 120 pieces of furniture
D) 207 pieces of furniture
5) Thando likes to drink Coca-Cola. Which of the following is not a determinant of his
demand for Coca-Cola?
A) The decrease in the price of Pepsi
B) Health magazines that say Coca-Cola is very unhealthy
C) Thando’s income
D) The supply of Coca-Cola
6) Production efficiency can be defined as
A) producing outside the production possibilities frontier.
B) minimizing opportunity cost.
C) being able to produce more of one good only if less of another is produced.
D) providing for the immediate needs of the greatest proportion of the population.
7) Opportunity cost is expressed in a production possibilities frontier (PPF) by a movement
A) from the region within the PPF to a point on the PPF.
B) from the region within the PPF to the region outside of the PPF.
C) from the region outside of the PPF to a point on the PPF.
D) along the PPF where to gain more of one good it is necessary to give some of
another good.
Downloaded by Anelisa Mqadi ()
, lOMoARcPSD|56497240
Module Code: ECC101 / ECS101 / PFEE201/ECSV101 Page 2 of 1910
8) The principle of decreasing marginal benefit indicates that as the consumption of
magazines increases, a person
A) obtains less satisfaction than if he or she had fewer magazines.
B) is willing to forego more of other goods or services to acquire another magazine.
C) is willing to pay increasingly more for another magazine.
D) willing to pay less for another magazine.
9) Allocative efficiency occurs when
A) we cannot produce more of any good without giving up some other good that we
value more highly.
B) we cannot produce more of any one good without giving up some other good.
C) marginal benefit exceeds marginal cost.
D) opportunity costs are decreasing.
10) The opportunity cost of producing one ton of wheat for Country A is 4 tons of corn. The
opportunity cost of producing one ton of wheat for Country B is 8 tons of corn. Which
country has the comparative advantage in the production of wheat?
A) Country A
B) Country B
C) Neither country has a comparative advantage.
D) Both countries have the comparative advantage.
11) Suppose that a typical German factory can produce 20 cameras or 1 computer in an
hour, and that a typical American factory can produce 10 cameras or one computer in an
hour. If Germany produces one less computer and switches resources to cameras, and
the United States produces one more computer and takes resources out of cameras,
then the net change in camera production in both countries taken together is
A) 0.
B) minus 10 cameras.
C) plus 10 cameras.
D) plus 20 cameras.
12) The "law of demand" predicts that, other things being equal,
A) an increase in the price of CDs decreases the demand for CDs.
B) a decrease in the price of gasoline decreases the quantity of gasoline demanded.
C) an increase in the price of pizza decreases the quantity of pizza demanded.
D) an increase in the price of coffee decreases the quantity of tea demanded.
13) When the price of a good falls, ceteris paribus, the income effect for an inferior good
implies that people will buy
A) less of that good because the relative price of the good has fallen.
B) more of that good because the relative price of the good has risen.
C) less of that good because they can afford to buy more of the things they
previously bought.
D) more of that good because they can afford to buy more of the things they
previously bought.
Downloaded by Anelisa Mqadi ()
