Online TEST ECO162-JUN 2021 SET A PDF

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UNIVERSITI TEKNOLOGI MARAONLINE TEST (SET A)COURSE : MICROECONOMICSCOURSE CODE : ECODATE : JUN 2021TIME : 2 HOURSFACULTY : BUSINESS AND MANAGEMENTPROGRAMME CODE : BA111/BAINSTRUCTIONS TO CANDIDATES This question paper consists of 3 parts : PART A , PART B and PART C Answer ALL questions. Answer all ...

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BA/JUN 2021/ECO162/104

UNIVERSITI TEKNOLOGI MARA ONLINE TEST (SET A)

COURSE

:

MICROECONOMICS

COURSE CODE

:

ECO162

DATE

:

JUN 2021

TIME

:

2 HOURS

FACULTY

:

BUSINESS AND MANAGEMENT

PROGRAMME CODE

:

BA111/BA119

INSTRUCTIONS TO CANDIDATES

1.

This question paper consists of 3 parts : PART A , PART B and PART C

2.

Answer ALL questions.

3.

Answer all questions in your own answer script.

Name

: ______________________________________________________

Matric No

: ______________________________________________________

Group

: ______________________________________________________

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BA/JUN 2021/ECO162/104

PART A 1. The fundamental problem of economics is A. B. C. D.

Achieving the best rate of economic growth Stabilizing the price level in the economy Allocating scarce resources relative to the society’s unlimited material wants Establishing an equitable taxation system.

2. A point inside the production possibility curve may indicate A. B. C. D.

All productive resources are efficiently utilized. Inefficient allocation of productive resources Full employment of scarce resources. Technological efficiency.

3. Conventional and Islamic economic systems are similar in such a way that A. B. C. D.

Both systems are concerned with the welfare of the society Both systems will ensure efficient combination of inputs at minimum costs Both systems are moderate and universal Both systems deny people of their freedom to choose.

4. The following are the essential features of a pure capitalism except A. B. C. D.

Free enterprise Price mechanism Public ownership of resources Profit motivated

5. Opportunity cost is the A. B. C. D.

cost of the best alternative forgone. cost of undesirable alternative. cost of factors of production. cost of buying the best alternative.

6. Pak Tarn owns a shop lot. If he were to open a restaurant, he estimates his revenue to be RM4 000 per month. However, if he were to let it to others, he would get the rent payment by the same amount. Assume that he decides to open a restaurant, how much is his opportunity cost? A. B. C. D.

RM2 000. RM4 000. RM8 000. RM12 000.

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7. Resources are limited and human wants are unlimited. This implies that A. B. C. D.

efficiency in production cannot be achieved. no goods and services can be attained freely. choices have to be made and opportunity cost will exist. people will compete with each other to satisfy their unlimited wants.

8. Which of the following is not true of Islamic economics? A. B. C. D.

Riba is not allowed. All economics activities must based on Islamic principles. Individual is not allowed to own property. Priority will be given to the society as a whole.

9. The basic difference between microeconomics and macroeconomics is that A. B. C.

microeconomics studies the behavior of individual consumers whilst macroeconomics studies the behavior of individual firms. microeconomics studies the behavior of individual consumers and firms whilst macroeconomics focuses more on the performance of the whole economy. microeconomics looks at the aggregate economy whilst macroeconomics is concerned with the behavior of individual markets.

D. microeconomics explores the causes of economic growth whilst macroeconomics

studies the causes of unemployment and inflation. 10. Excessive unemployment of economic resources in a production possibilities curve is indicated by A B. C. D.

a movement along the curve. an inward shift of the curve. an outward shift of the curve. a point inside the curve.

11. If the price of a good increases, the demand curve for the good’s close substitute will A. B. C. D.

Shift to the right Shift to the left Remain unchanged Cannot be determined

12. the supply of mutton and wool may interrelated because both are A. B. C. D.

complementary supplementary jointly demanded jointly supplied

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13. An increase in the price of sugar will A. B. C. D.

lead to an increase in the supply of sugar. lead to an upward movement of the supply curve of sugar. lead to an increase in the demand for sugar. lead to a reduction in the prices of inputs used in sugar production.

14. The demand curve for good H is downward sloping, so an increase in its price will cause A. B. C. D.

an upward movement along the demand curve. a downward movement along the demand curve. a rightward shift of the demand curve. the demand curve to remain unchanged.

15. Which of the following will reduce total revenue? A. B. C. D.

Price increases when demand is elastic. Price decreases when demand is elastic. Price increase when demand is inelastic. Price increases when demand is unitary elastic.

16. The larger the proportion of income spent on a good A. B. C. D.

the less elastic is the good's demand curve. the more elastic is the good's demand curve. the more inelastic is the good's demand curve. no effect on the good's demand curve.

17. A lower price increases the quantity demanded because A. B. C. D.

The purchasing power of individuals decreases The financial assets of individuals decrease. Individuals buy more of the product and less of a substitute Individuals buy less of the product and more of the substitute

18. If the supply for a product is elastic, the coefficient of price elasticity of supply is A. Zero B. Greater than one C. Equal to one D. Less than one 19. The concept of price elasticity of demand measures A. The slope of the demand curve B. The number of buyers in a market C. The extent to which the demand curve shifts as the result of a price decline D. The sensitivity of quantity demanded to price changes

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20. The price of a plate of lasagna increases by 25% and the quantity demanded of lasagna falls by 29%. This indicates that demand for lasagna is A. Elastic B. Inelastic C. Unitary elastic D. Perfectly elastic

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PART B QUESTION 1 The following table shows the production possibilities combination of Country A that produces two products: Computer and Microwave Production Computer (million) Microwave (million)

A

B

C

Combinations D E

0 40

10 38

20 35

30 26

40 15

F 50 0

a) Define opportunity cost and list two (2) assumptions to draw PPC. (2 marks) b) Based on the table above sketch the production possibility curve (PPC) for Country A (2 marks) c) What does the shape of production possibility curve indicate? Justify. (1 mark) d) Calculate the opportunity cost i) Of producing 10 million units of computer ii) Of producing 35 million units of microwave iii) When the production of computer increases from 20 million units to 50 million units (3 marks) e) Country A wishes to produce 40 million units of computer and 30 million units of microwave i) Is it possible to achieve that point? (1 mark) ii) Suggest one (1) way in which this combination can be achieved (1 mark)

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QUESTION 2 a) The diagram below shows the price , quantity demanded and quantity supplied for pineapples in Country KK. Price (RM/unit) 1 2 3 4 5 6 7

Quantity Demanded Buyer A (unit) 800 700 600 500 400 300 200

Quantity Demanded Buyer B (unit) 1000 900 800 700 600 500 400

Quantity Supplied (unit) 1200 1300 1400 1500 1600 1700 1800

i)

Using graph paper, draw the demand and supply curves for pineapples and state the equilibrium price and equilibrium quantity. (2 marks)

ii)

At the price of RM6 , state whether there is a surplus or shortage .How much is the surplus or shortage? (2 marks)

b) The table below shows the price of good X and quantity demanded for good X, Y and the level of income. Price of good X (RM) 4.00 8.00 12.00 16.00 20.00 i)

Quantity Demanded Good X Good Y 500 200 400 350 300 500 200 650 100 800

Income (RM) 1000 1500 2000 2500 3000

Calculate the price elasticity of demand for good X when its price decrease from RM16 to RM8. Is there elastic or inelastic demand. (2 marks)

ii) Calculate the income elasticity for good X when income rises from RM1000 to RM1500. State the type of good X? (2 marks) iii)

Calculate the cross elasticity for good Y when price of good X falls from RM20.00 to RM8.00. What is the relationship between good X and Y? (2 marks)

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PART C QUESTION 1 a) Discuss the differences between free economic system and command economic system. (4 marks) b) Discuss four (4) factors that cause decreasing in supply. (6 marks)

END OF QUESTION PAPER

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