Economics Assignment

Addis Amba College
Course Name: Introduction to Economics Assignment (40%)

Full Name: ………………………………Department…………..…..Center………Sig: ..... Id No…..
Section I: write true if the statement is correct and false otherwise.
1. Fiscal policy is an action of government to stabilize the economy by changing the amount of tax and
interest rate.
2. In Perfectly competitive market, firms can adjust quantity rather than price.
3. GDP is the value of all final and intermediate goods and services produced in the country within a given
period.
4. Contractionary monetary policy is appropriate when recession is a problem.
5. A person who has no job but highly seeking job is said to be unemployed.
6. Business cycle is an irregular up and downs of potential GDP around real GDP.
Section II: Match column ‘A’ which contains words and phrases with column ‘B’.
A B
1. Rational region A. what to produce
2. Factor-product relation ship B. How much to produce
3. Product- product relationship C. Stage I production region
4. factor - factor relationship D. Stage II production region
5. From TP=0 to MR = AR negative E. Stage III production region
F. List cost combination
Section IV: Choose the correct answer
1. Assume our country Ethiopia faced hyper inflation. What will be the government action to stabilize the
economy with monetary policy?
A. increase reserve ratio B. Reduce the amount of tax collection
C. decrease the interest rate D. none
2. In the business fluctuation, an economic expansion region is:
A. At the peak of the business cycle. B. At the trough of a business cycle.
C. Starting from trough to peak D. Starting from peak to trough
3. Cost push inflation occurs due to:
A. An increase in demand B. An increase in cost of production
C. A decrease in demand D. A decrease in cost of production
4. As more of consumed more of your favourite food, your satisfaction will decline. This is due to:
A. Shortage of income B. Diminishing marginal utility
C. quality of food D. A & C
5. One of the following statement best describes short run production period:
A. At least one input is fixed B. All inputs are variable
C. All inputs are fixed D. None
1
6. Which one of the following is an example of variable input?
A. Land B. Building C. Plant D. Labour
7. The following statements are true about expansion phase of business cycle except:
A. inflation increase B. output increase
C. unemployment increase D. Investment increase
8. Among the following change in slope can be observed in:
A. Shift in the budget line B. Shift in the demand curve
C. Rotate in the budget line D. Shift in the supply curve
9. Stage III of a production region covers:
A. From Tp=0 to the point Ap = Mp
B. Covers the range where Mp is negative
C. From Ap = Mp to the point where Mp = 0
D. From Ap = Mp to the region where Mp is negative
10. Among the following which one would be included as a member of the labor force?
A. A full time college student.
B. A recent higher institution graduate looking for a first job.
C. A person contributing 15 hours per week as a volunteer worker in a hospital.
D. retired school teacher collecting social security benefits
11. Unemployment that caused by a recession is called:
A. Frictional unemployment. B. Cyclical unemployment.
C. Seasonal unemployment D. Structural unemployment
12. Of the following enterprises, one is odd
A. oats and straw B. Cotton and cotton seed
C. mutton and wool D. poultry and weaving
13. In the production possibility frontier, if the production level is inside the ppf curve, what can you say?
A. Resource has fully employed B. optimum utilization of resource
C. inefficient D. over utilization of resource
14. Surplus will occur at which:
A. Qd = Qs B. Qd < Qs
C. Qd > Qs D. None
15. If you go to visit the Lalibela rock hewn church, you may spend 400 birr for round trip bus ticket, 400
birr for food and other stationeries. Totally you spend 800 birr and your utility is assumed to be
equivalent to this 800 birr. What types of utility approach does it?
A. Ordinal utility B. Indifference curve approach
C. Cardinal utility D. None
16. Within a single indifference curve, the utility level could be
A. Increase from bottom to top along the curve B. Indifference along the curve
C. Decrease from bottom to top D. Difference along the curve

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Addis Amba College

Course Name: Introduction to Economics Assignment (40%)

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