Multiple choice questions for Unit 3 PDF

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Multiple choice questions for Unit 3 of Core's the Economy...

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Unit 3 MCQ’s: 1. Given the numbers in the table, we calculate that the marginal product and average product values at the 6th input are: 0 Input Output 0 Marginal product Average product

a) b) c) d) e)

1 38

2 67

3 4 84 105

5 6 165 202

7 8 298 365

96, 42.6 37, 33 37, 33.7 60, 22.5 60, 42.6

2. If diminishing marginal returns have already set in for a picture framing store and the marginal product of the fifth worker is 20 frames per day, then the marginal product of the sixth worker must be a) negative b) zero c) less than 20 d) greater than 20 e) greater than 40

3. Which of the following statements is TRUE? a) Average product (AP) reaches a maximum where the slope of the total product (TP) curve is at a maximum. b) The marginal product (MP) curve cuts the AP curve at the AP curve’s maximum point. c) Negative marginal returns are obtained when the total product (TP) curve starts increasing at a decreasing rate. d) Marginal product will always be greater than the average product curve. e) When total product is at a maximum then average product is at zero.

4. You can choose between watching a movie in the theatre or borrowing the movie from a friend and watching it at home. The movie ticket price is R80. You estimate the enjoyment of watching the movie at home to be R130. What is the opportunity cost and economic cost of watching the movie in the theatre? a) Opportunity cost is R130 and Economic cost is R80. b) Opportunity cost is R50 and Economic cost is R80. c) Opportunity cost is R50 and Economic cost is R210. d) Opportunity cost is R130 and Economic cost is R210. e) Opportunity cost is R130 and Economic cost is R130.

The diagram below shows how the choice of free time affects a student’s grade for an exam. Use the diagram to answer the following question.

5. This diagram shows a) that if a student moves from A to E on the feasible frontier they will give up 1 hour of free time. b) point D lies inside the feasible frontier and the student may move onto the feasible frontier without incurring an opportunity cost. c) the student can move from F to B without studying an additional hour. d) the marginal rate of substitution is greater at A than at F. e) that in order to increase free time by one hour the student would have to give up more percentage points at point A than at point F.

The diagram below shows a budget constraint and three indifference curves. Use this diagram to answer the following question.

Q of good y

I3 I2 I1

C

D A

E B B1 5

Q of good x

6. Which options are correct? a) b) c) d) e)

C, B and E are the only affordable options. A, B and C give the same satisfaction. B, C and E give the same satisfaction. D is the equilibrium position because it is on I3. E is the only affordable position....