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Econ 1011 Group Assignment

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75 views3 pages

Econ 1011 Group Assignment

Uploaded by

Alexander Zewdu
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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AAMBC (Dire Dawa Campus)

Department of Business and Economics


Group Assignment for Introduction to Economics
Accounting, Business Management and Marketing I year 2015 (Extension)
Total Mark 20 %
Instructions
Deadline for submission April 13 , 2023 GC
Late submission and plagiarism is strictly prohibited
Neat and clear work has credit
Attempt all the questions
Chapter 1
I. Multiple Choice ( 0.5 pt each)
1. All are the concern area of macroeconomics except one. Which one?
A. deals with aggregates like national income, general price level and national output
B. is concerned with the determination of equilibrium level of income and employment.
C. Studies of individual income and saving.
D. studies an economy as a whole and its aggregates.
E. None
2.In developing economic theories through deductive method, which step comes third?
A. Testing or verifying hypothesis
B. Identifying the problem and its variable
C. Comparing prediction with facts
D. Developing Hypotheses through Logical Deduction
3.The key economic concepts that serve as the basis for the study of Economics is:
A. Inflation B. Unemployment C. Scarcity D. Money
4.Resources are said to be scarce when
A. they are not available in sufficient quantity to satisfy all human wants.
B. they are available in sufficient quantity to satisfy all human wants.
C. they are available in sufficient quantity to satisfy limited human wants.
D. None
5.The opportunity cost arises because of
A. the problem of scarcity of resources
B. the fact that resources have alternative uses
C. A & B
D. None

1
Chapter 2
I. Multiple Choice (0.5 pt each)
1. A house hold demand curve for butter will shift as a result of change in
A. the price of butter C. house hold income.
B. the price of cooking oil D. all except A
2. A change in the price of a good
A. shifts the good's demand curve but does not cause a movement along it.
B. does not shift the good's demand curve but does cause a movement along it.
C. shifts the good's demand curve and also causes a movement along it.
D. neither shifts the good's demand curve nor causes a movement along it.
3.An inferior good is characterized by
A. an increase in the income will decrease demand
B. a decrease in income will increase demand.
C. a decrease in price will increase demand.
D. A & B
E. B & C
4.All other things remaining constant, what causes movement in the supply curve of a
commodity?
A. Income of the producers. C. Own price of the commodity.
B. Income of the consumers. D. Technological improvement.
5. What causes shift of the demand curve of a commodity?
A. The own price of the commodity. C. Prices of the other commodities.
B. The income of the consumer. D. Taste of the consumers. E. all except A
II. Work out
6. Suppose that an individual demand function for a commodity is given by Q d = 50-0.2P and the
individual supply function is given by Q s = 0.1P-10, where Qdis the quantity demanded of a
commodity per day, Qs represents the quantity supplied of a commodity per day and P is the
market price of a commodity in Birr per unit and further assume that there are 200 identical
buyers and 100 identical sellers of the same product. Calculate the market clearing price and
quantity (1.5pts)

7.Suppose that a consumer started consuming 20 k.g of a good when his income increased to Birr
2000 which he used to consume 30 k.g of a good when his income level was 1200 birr. What will
be the income elasticity of demand & the nature of the good respectively? (2pt)

8.At Birr 5 per unit, a consumer buys 40 units of a commodity and the price elasticity of his
demand is 2. How much will he buy if the price reduces to Birr 4 per unit? (1.5pts)

2
Chapter 3
1. State assumptions of cardinal utility theory. (1pt)
2. State properties of an indifference curve. (1pt)
3. State the condition of consumer’s equilibrium in terms of cardinal utility approach. (1pt)
4. Fill the table given below (1 pt)
Units Purchased MU TU
1 8
2 6
3 4
4 2
5 0
6 -2
5. Fill the table given below (1 pt)
Combination Good a (units) Good b (units) MRS a b
A 1 12
B 2 8
C 3 5
D 4 3
E 5 3

6.Assume that the total expenditure of a consumer on two goods X and Y is E = Birr 2000,
and prices of goods X and Y are P X = Birr 50 and PY = Birr 40. Formulate his budget
equation. (2 pt)
7. Suppose that consumer utility function is U =√ Q1 Q2 , and if P1= 4, P2= 1 and the consumer
money income I = 120. What are the optimal values of Q1&Q2?(3Pts)

(Use Lagrangian Method)

(Illustrate your answers diagrammatically)

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