ampus

se if it is Incorrect (1Pt each).

Part 1: Say true if the statement is Correct and fal
conomic questions are addressed by the
1. in a conirnanti efonoinie system, the three hasic e
government.
t
2. If the cross price elasticity of demand ror good A B is positive, you would conclude tha

the two goods are complements.

3. 11 amarket price caused a surplus,. one may conclude that this price is above the equilibrium

market price level.

4. The quantities of goods that individuals are willing and able to buy are known as supply. 5.

Co-existence of public and private sectors are the main features of mixed economic system,

Part II: Choose One of the Best Answers from the Given Alternatives 1Pt eaciu 1,

Which one of the following is not the concern of microeconomics

A. Studying the behavior of consumers in maximizing satisfaction.

B. Studying the behavior of films in maximizing profit.

c, Studying how prices of products and inputs are determined in product and factor
markets..

D. Studying the general price level in the economy.

Which of the following is part of the opportunity cost of going to holiday?

A. The money you spent on a theatre show.

B. The money you could have made if you had stayed at home and worked.
C. The money you spent on airline ticket.
a The money you spent on food. 3.
Economic growth is depicted by

A. A shift in the production possibilities frontier outward.

B. A shift in the production possibilities frontier inward.

C. A movement along a production possibilities frontier toward 4,.-apit,11

D. None.
4. which one of the t011owing is nor im-rectiv
 5, In a product market.
A. Firms are seller of rt.'.sonrces.

B,Households are .till-Ilk-1r of resources.

.c. Households are buyer of goods .11H.1 services.

D. Government is suppliers of inputs.

6. Choose. the correct combination of an economic problem and its focus

A. What to produce- allocation of resources.
B. For whom to produce-distribution of. products.
C. How to produce — technique of production.
ID,. All.
7. Identify the correct statement below
A. Choice implies scarcity; scarcity in turn implies opportunity cost.
B. Scarcity implies choice; choice in turn implies opportunity cost.
C. Choice implies opportunity cost, choice in turn implies scarcity,
D. Scarcity implies opportunity cost, opportunity cost implies Choice.
8. One of the following is an example of positive economics
Al Poverty and unemployment are the biggest problems in Ethiopia.
B. The poor should pay no taxes.
C. There is a need for intervention of government in the economy.
D. All.
9. The two fundamental facts which lead to the emergence of economics as a separate
discipline are:

A Unlimited human wants and limited resources

B. Limited human wants and scarce resources
C. Unlimited human wants and unlimited resources
D. Scarce human wants and limited resources

10, Luxury is a good or Scrliiicc* with a Liciniirki ihat 16. . and a ricixssity is a good
or service wall a ticinand 111;11
A, ('1..o;,

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 A. Income; positive C. Cross price; positive

13# Cross price; negative D. Income; negative

13. If an increase in a consumerrs income causes the consumer to decrease the quantity

demanded of a good, then the good is

A. A substitute good An inferior good

B. A normal good D. A complementary good

14. Which of the following shifts the demand for watches to the right?

A. An increase in the price of watches.

Bo. An increase in consumer income if watches are a normal good. C..

A decrease in consumer income if watches are a normal good,

D. A decrease in the price of watches.

15. The law of demand states that ceteris paribus , an increase in the price of a good

A. Increases the supply of that good.

good.
B". Decreases the quantity demanded for that
hat
C. Decreases the demand for t good.
od
D. Increases the quantity supplied of that go ,
roportion, then
16, \Alhen both demand and supply increases with the same p
A. The effect on market clearing level of otit pu t is negative
Bit The effect on markei clearing level of price is indeiermi liate
e
C. The effect on aizirket dear* IC SR: I of price is 'legal i
I). The effect 4)/1 market clearing Icvel of itidetaLiiiii.mc

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 Part 111:ii:AAgattion and Workout

2. Given the demand and supply function of a given commodityasi Qd = 190 — 4P and
Qs = 13 — 90, respectively.
A. Calculate the equilibrium price and the equilibrium quantity (200
B. Will there be a shortage or surplus if market price is 35 birr?(2pts)
t(200,
C.. Find price elasticity of demand at equilibrium and interpret the resul

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Answer Sheet for Mid-Term Examination of Economics Cou

Name

r O.
1 LruoTrue/False Nu. II. Choice 1
1DNo _Section.

Part 0
3 13 I1

8 14
17

L_
lS
.1!

16
ou can use the back side of the answer sheet too).
Part III: Explanation and Workout Y
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