Mid-Exam of Intraduction to Economics
Course title: Introduction to Economics
Course Code: Econ1011
Academic Year: 2022 G.C. 2014 E.C.; Semester: I
Target group: Economics 1" Year (Evening)
Time Allotted: 1:30 Hrs.
General Instructions
Attempt all questions clearly and neatly
Show all the necessary steps and formulas for the work out part
Write your answer on provided answer sheet Write your name on both question paper and answer sheet
Name
DECIDE HAIW
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Part 1: Write 'True' if the statement is correct and 'false' if the statement is wrong.
1. Microeconomics deals with the behavior of aggregate economic units.
2. A society is said to be inefficient when it can't produce more of one good without producing less of another.
3. If two goods are complements, citrus paribus price of one and the demand for the other are inversely related.
4. The only factor that can cause a change in quantity demanded is the price of the commodity.
5. The law of supply states that, ceteris paribus, as price of a product increase, quantity supplied of the product decreases and as price decreases, quantity supplied increases.
6. A rise in the price of one good leads to increase quantity demanded of its substitute good,Other things being equal.
1. False
2. True
3. False
4. True
5. True
6. False
1. False: Microeconomics deals with the behavior of individual economic units, such as households and firms, rather than aggregate units.
2. False: A society is said to be inefficient when it could produce more of one good without sacrificing the production of another good. Efficiency is achieved when resources are allocated in a way that maximizes their value and satisfies societal needs.
3. True: If two goods are complements, such as bread and butter, then an increase in the price of one good will lead to a decrease in the demand for the other good, assuming other factors remain constant.
4. True: The quantity demanded of a commodity is influenced by its price. As the price of a commodity increases, quantity demanded typically decreases, and vice versa, assuming other factors remain constant.
5. True: The law of supply states that, assuming other factors remain constant, an increase in the price of a product will lead to an increase in the quantity supplied, and a decrease in price will lead to a decrease in the quantity supplied.
6. False: A rise in the price of one good typically leads to a decrease in the quantity demanded of its substitute good, assuming other factors remain equal. The demand for substitutes is typically inversely related to the price of the substitute good.