ECS2606 EXAM PACK 2025 QUESTIONS
AND ANSWERS || VERIFIED ECONOMIC
SCIENCES EXAM SOLUTIONS
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<LATEST VERSION>
ECS2606 EXAM PACK 2025: INTERMEDIATE MICROECONOMICS
Section A: Consumer Theory & Demand
1. What does the term 'marginal utility' refer to?
a) The total satisfaction from consuming all units.
b) The additional satisfaction from consuming one more unit. ✅
c) The average satisfaction per unit consumed.
d) The utility when price is zero.
2. The law of diminishing marginal utility states that:
a) Total utility decreases as consumption increases.
b) The marginal utility of a good decreases as more of it is consumed. ✅
c) Utility can be measured cardinally.
d) Marginal utility is always negative.
3. An indifference curve represents:
a) All combinations of goods that cost the same.
b) All combinations of goods that yield the same level of utility to the consumer.
✅
c) The demand schedule for a good.
d) The production possibilities of a firm.
4. The slope of the budget line is determined by:
a) The marginal rate of substitution.
, b) The ratio of the prices of the two goods. ✅
c) The consumer's income.
d) The level of utility.
5. At the consumer's optimum, on the budget line, the condition that must be
met is:
a) MRS = Px / Py ✅
b) MRS = MUx / MUy
c) MRS = 1
d) MRS is maximized.
6. The income effect of a price change refers to:
a) The change in consumption due to a change in purchasing power. ✅
b) The change in consumption due to the good becoming relatively cheaper.
c) The shift of the entire demand curve.
d) The change in consumer preferences.
7. The substitution effect of a price change:
a) Is always positive.
b) Is the change in consumption due to a change in relative prices, holding utility
constant. ✅
c) Is the change in consumption due to a change in real income.
d) Is negligible for Giffen goods.
8. A Giffen good is one for which:
a) The income effect reinforces the substitution effect.
b) The demand curve is upward-sloping. ✅
c) It is always a luxury good.
d) The substitution effect outweighs the income effect.
9. For a normal good, the demand curve is:
a) Vertical.
b) Upward-sloping.
c) Downward-sloping. ✅
d) Horizontal.
AND ANSWERS || VERIFIED ECONOMIC
SCIENCES EXAM SOLUTIONS
|| 100% GUARANTEED PASS
<LATEST VERSION>
ECS2606 EXAM PACK 2025: INTERMEDIATE MICROECONOMICS
Section A: Consumer Theory & Demand
1. What does the term 'marginal utility' refer to?
a) The total satisfaction from consuming all units.
b) The additional satisfaction from consuming one more unit. ✅
c) The average satisfaction per unit consumed.
d) The utility when price is zero.
2. The law of diminishing marginal utility states that:
a) Total utility decreases as consumption increases.
b) The marginal utility of a good decreases as more of it is consumed. ✅
c) Utility can be measured cardinally.
d) Marginal utility is always negative.
3. An indifference curve represents:
a) All combinations of goods that cost the same.
b) All combinations of goods that yield the same level of utility to the consumer.
✅
c) The demand schedule for a good.
d) The production possibilities of a firm.
4. The slope of the budget line is determined by:
a) The marginal rate of substitution.
, b) The ratio of the prices of the two goods. ✅
c) The consumer's income.
d) The level of utility.
5. At the consumer's optimum, on the budget line, the condition that must be
met is:
a) MRS = Px / Py ✅
b) MRS = MUx / MUy
c) MRS = 1
d) MRS is maximized.
6. The income effect of a price change refers to:
a) The change in consumption due to a change in purchasing power. ✅
b) The change in consumption due to the good becoming relatively cheaper.
c) The shift of the entire demand curve.
d) The change in consumer preferences.
7. The substitution effect of a price change:
a) Is always positive.
b) Is the change in consumption due to a change in relative prices, holding utility
constant. ✅
c) Is the change in consumption due to a change in real income.
d) Is negligible for Giffen goods.
8. A Giffen good is one for which:
a) The income effect reinforces the substitution effect.
b) The demand curve is upward-sloping. ✅
c) It is always a luxury good.
d) The substitution effect outweighs the income effect.
9. For a normal good, the demand curve is:
a) Vertical.
b) Upward-sloping.
c) Downward-sloping. ✅
d) Horizontal.
