National Textile University, Faisalabad

Quiz 2
(Objective)
Student’s Name: Course Title: Microeconomics
Registration No: Course Code: ECON-1081
Program: BS (TMM) Department: MANAGEMENT SCIENCES
Semester/Sections: Exam Date: 16-11-2017
Total Marks: 16 Time Allowed: 20 Minutes
All Question Carry Equal Marks.
(Note: Cutting, removing and over writing are not allowed.)

1. Which statement best illustrates the concept of diminishing marginal utility?

A. As one consumes more hamburgers per week, one would be willing to pay a higher price for
additional hamburgers
B. Some consumers will receive less satisfaction from consuming hamburgers than from consuming
fried chicken
C. A typical consumer will receive less satisfaction from consuming the fourth hamburger than
from the third hamburger in a week
D. A decrease in the price of hamburgers will cause consumers to buy more hamburgers because
they can afford to buy more

2. The idea of the Law of Demand, as applied to electric cars, assumes which of the following to
be constant?
A. Price of electric cars
B. Price of gasoline cars
C. Quantity of electric cars demanded by buyers
D. How much sellers are charging customers for electric cars
3. The horizontal axis of a graph that shows a market demand curve indicates the:
A. Different prices at which various levels of output can be sold
B. Number of consumers who are in the market for this product
C. Various quantities of output at which the market will be cleared
D. Quantities which consumers will be willing and able to buy at various prices

4. In order to derive a market demand curve from individuals' demand curves, we add up the:
A. Various individuals' quantities demanded at each price level
B. Various prices that each buyer is willing and able to pay
C. Incomes of all buyers, assuming that their tastes remain constant
D. Total number of buyers in the market at each time period

5. When economists speak of "demand" in a particular market, they refer to:

A. The whole demand curve or schedule
B. One point on the demand curve
C. One price-quantity combination on the demand schedule
D. How much of an item buyers want to buy at a given price
6. Other things being equal, the law of demand suggests that as:

A. The demand for iPads increases, this will cause the price to increase
B. Income increases, the quantity of iPads demanded will increase
C. The price of iPads decreases, the quantity demanded will increase
D. The price of iPads decreases, the quantity demanded will decrease

7. Which of the following is consistent with the law of demand?

A. A decrease in the price of tacos causes sellers to want to sell less

B. An increase in the people's craving for pizza causes buyers to buy more pizza
C. An increase in the price of hamburgers causes buyers to buy fewer hamburgers
D. A decrease in the price of egg rolls causes a decrease in the quantity of egg rolls demanded

8. In understanding and analyzing "demand," we focus on how much of a product the buyers
are:
A. Willing and wanting to buy
B. Actually buying now and in the recent past
C. Able to buy with their given income
D. Willing and able to buy
9. The following are explanations of the Law of Demand, except:
A. Expectations effect
B. Diminishing marginal utility
C. Income effect
D. Substitution effect
10. A higher price reduces the quantity demanded for a product because:
A. The purchasing power of individuals increases
B. The financial assets of individuals increase
C. Individuals will buy more of the product and less of its substitutes
D. Individuals can afford less of the product and will switch to substitutes

11. A result of a fall in the price of gasoline, consumers can afford to buy more gasoline for more
driving trips. This is an illustration of:

A. The income effect

B. The substitution effect
C. Diminishing marginal utility
D. Consumer sovereignty
12. As a result of a decrease in the price of online streaming movies, consumers download more
movies online and buy fewer DVDs. This is an illustration of:

A. Consumer sovereignty
B. The income effect
C. The substitution effect
D. Diminishing marginal utility
13. Which statement best illustrates the concept of diminishing marginal utility?

A. As one consumes more hamburgers per week, one would be willing to pay a higher price for
additional hamburgers

B. Some consumers will receive less satisfaction from consuming hamburgers than from consuming
fried chicken

C. A typical consumer will receive less satisfaction from consuming the fourth hamburger than
from the third hamburger in a week

D. A decrease in the price of hamburgers will cause consumers to buy more hamburgers because
they can afford to buy more

14. The idea of the Law of Demand, as applied to electric cars, assumes which of the following to be
constant?

A. Price of electric cars

B. Price of gasoline cars

C. Quantity of electric cars demanded by buyers

D. How much sellers are charging customers for electric cars

15. The horizontal axis of a graph that shows a market demand curve indicates the:

A. Different prices at which various levels of output can be sold

B. Number of consumers who are in the market for this product

C. Various quantities of output at which the market will be cleared

D. Quantities which consumers will be willing and able to buy at various prices

16. In order to derive a market demand curve from individuals' demand curves, we add up the:

A. Various individuals' quantities demanded at each price level

B. Various prices that each buyer is willing and able to pay

C. Incomes of all buyers, assuming that their tastes remain constant

D. Total number of buyers in the market at each time period

17. The table below shows the weekly demand for hamburger in a market where there are just
three buyers.

Refer to the above table. At a price of $6, the weekly market quantity demanded for hamburger is:

A. 17

B. 23

C. 18

D. 24

18. The table below shows the weekly demand for hamburger in a market where there are just
three buyers.

Refer to the above table. If the price of hamburger falls from $5 to $3, then the weekly market quantity
demanded will:

A. Increase from 24 to 52

B. Decrease from 52 to 24

C. Increase from 120 to 156

D. Increase from 29 to 55

19. The table below shows the weekly demand for hamburger in a market where there are just
three buyers.

Refer to the above table. If there were 200 buyers in the market, each with a demand schedule identical
to Buyer 2 in the table above, then the weekly quantity of hamburger demanded in the market at a price
of $4 would be:
A. 8,000

B. 2,000

C. 7,400

D. 4,000

20. An increase in the demand for MP3 music indicates that more are:

A. Purchased even if prices of MP3 music stayed the same

B. Demanded because MP3 music prices decreased

C. Demanded because sellers are selling more MP3 music

D. Purchased because sellers are putting MP3 music on sale

National Textile University, Faisalabad

Final Semester Examination Fall 2015
(Subjective)
Student’s Name: Course Title: Microeconomics
Registration No: Course Code: ECON-2081
Program: BS (TMM) Department: MANAGEMENT SCIENCES
Semester/Sections: 3rd Exam Date: 10 -02-2016
Total Marks: 24 Time Allowed: 100Minutes

Note: Attempt all questions.

Q. 2: Define the four market models and also discuss characteristics of pure competition.

( 5)
Q. 3 (a): Write a note on PAK China economic corridor and also discuss the possible
impact of Pak China economic corridor on the economy of Pakistan. (6)

Q. 4: What information are contained in an indifference curve ,indifference map and

budget line? Why indifference curves are convex to origin? Why does total utility
increase as the consumer moves to indifference curves farther from the origin? . (5)

Q. 5: Define and explain the following. (8)

1. Characteristic of Utility
2. Elasticity of Supply
3. Economic Profit
4. Law of diminising return with figure