ACCRA TECHNICAL UNIVERSITY
FACULTY OF BUSINESS
DEPARTMENT OF MARKETING / MANAGEMENT & PUBLIC ADMINISTRATION
PRINCIPLES OF MICROECONOMICS (BTM 103 / MKT 107 / DBA 1223)
SELF ASSESSMENT QUESTIONS (UNIT 1)
1. The word economics refers to…………………………………………………………………
(a) Scarce (b) commanding price (c) limited (d) all of the above
2. The central economic problem of every society is……………………………………………
(a) to prevent riots in our cities (c) to preserve democracy
(b) to maintain peace in our society (d) scarcity of economic resources
3. The complete satisfaction of society’s economic wants is impossible because…………….
(a) everyone desires maximum satisfaction of wants.
(b) our economic wants are scarce.
(c) our wants far exceed the productive capacity of our scarce resources.
(d) there are no productive resources.
4. Which of the following contextual definition is deemed universally accepted definition of
economics science?
(a) Growth Definition by Paul Samuelson.
(b) Scarcity definition by Lionel Robbins.
(c) The Economic Problem Definition by David Begg.
(d) Wealth Definition by Adam Smith.
5. The economic problem arises out of the fact that human wants are………………..
(a) controllable. (b) insatiable (c) numerous. (d) satiable.
6. In the free competitive enterprise economy, the economic problem of what to produce is
solved by………………….
(a) centralized planned committee (c) competitive tendering
(b) price mechanism (d) what consumers want
7. The achievement of maximum fulfillment of wants using the available productive resources
is termed as…………………
(a) economic efficiency (c) innovative efficiency
(b) technical efficiency (d) economic security
8. Which of the following is not one of the main resource categories?
(a) Capital. (b) Labour. (c) Land. (d) Machinery.
9. To the economist, all “gifts of nature” fall under the definition of………………
(a) capital. (b) human effort. (c) land (d) mineral deposits.
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10. The reward for the entrepreneur as a special type of human effort is…………………………
(a) interest (b) rent (c) profit (d) wages & salary
11. Which of the following is not a factor of production?
(a) Labour (b) Land (c) Money (d) Capital
12. If an economy were operating at a point inside its production possibilities frontier (or
boundary)
(a) it would be maximizing its total production of goods and services
(b) it would be producing beyond its productive capacity
(c) it would be wasting available resources
(d) it would need to obtain additional supplies of productive inputs
Use the Figure Below to Answer Questions 13 to 16
Clothing
g
A DD
10 D
5 B
0
15 25
Food
13. The above figure illustrates that if this country wishes to move from its current production
point (labeled “A”) and have 10 more tones of food, it can do this by producing.
(a) 10 more tones of clothing. (c) 10 fewer tones of clothing.
(b) 5 fewer tones of clothing. (d) 5 more tones of clothing.
14. Point A on the production possibilities curve in the above figure means that
(a) Clothing production is inefficient (c) Tractor production is inefficient
(b) The economy is employing all its resources (d) The economy is not employing all
its resources
15. Unemployment and productive inefficiency would best represented in the figure by:
(a) Point B (b) Point C (c) Point D (d) Point A
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16. Economic growth could be represented by
(a) A movement from point A to point B
(b) A movement from point B to point A
(c) A shift in the production possibilities curve out to point C
(d) A shift in the production possibilities curve out to point D
17. “It is not fair for Doctors to receive more salary than Nurses” This is
(a) both positive and normative statement (c) strictly macroeconomic issue
(b) a positive statement (d) a normative statement
18. Which of the following is a normative statement
(a) Firms that want to sell more apples in the market should reduce price because when
price of apple falls, demand for apples will increase, all things being equal
(b) When the price for apples falls, demand for its substitute will fall, all things being equal
(c) It is not fair for price of apples to be higher than its substitute
(d) Given the demand for apples, when the supply of apples increase the price of apples will
fall.
19. The private-enterprise system of economic organization is criticized on the basis that in a
market economy
(a) collective consumption goods are provided in sufficient amounts
(b) governments know what the people want
(c) private costs do not reflect the social costs of economic activity
(d) public investment projects can be unprofitable
20. Which of the following statements best describes the concept of opportunity cost:
(a) it is the value of some foregone activity
(b) it is the value of each foregone activity
(c) it is the monetary cost of a transaction
(d) it is the value of the next best alternative activity forgone.
21. Allocation of resources in a free market economy is determined by
(a) a central planning authority (c) by consumer preferences
(b) the level of profits of firms (d) votes taken by consumers
22. Which one of the following is a microeconomic issue?
(a) House prices rise more rapidly. (c) Unemployment rises.
(b) Imports exceed exports (d) Government spends more than it receives in tax revenue.
23. The relationship between ends and means is
(a) Choice (b) Scale of Preference (c) Opportunity Cost (d) Scarcity
24. Which of the following statements best defines opportunity cost?
(a) The sacrifice of any alternative choice
(b) The price of the commodity
(c) The price of the sacrificed alternative
(d) The sacrifice of the next-best desired alternative
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25. Which of the following is a normative statement?
(a) Unemployment tends to be higher in developing countries than in developed countries.
(b) There is an inverse relationship between inflation and unemployment
(c) The government in Ghana is too much concerned with inflation rather than
unemployment
(d) Economic growth comes with the cost of environmental degradation
26. When we look at the whole economy or its major aggregates, our analysis would be at the
level of
(a) Positive Economics
(b) Normative Economics
(c) Microeconomics
(d) Macroeconomics
27. A rational person does not act unless
(a) The action is ethical
(b) The action produces marginal costs that exceed marginal benefits
(c) The action produces marginal benefits that exceed marginal costs
(d) The action makes money for the person
28. Which of the following creates A factor of production “ capital”
(a) A share of Guinness stock is bought by one person from another person through a broker
in stock exchange
(b) person opens a savings account at a local bank
(c) Guinness builds a new brewery factory building
(d) A person inherent GH¢10,000 from a deceased father
29. Economic theories seek to
(a) Identify all the numerous detailed causes of an economic event.
(b)Explain and predict economic events.
(c) Develop rules of individual economic behavior.
(d)All of the above.
30. Which of the following is a type of public good?
(a) Tires (b) cars (c) highways (d) gasoline