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CBT TEST

ECN 205 CBT PRACTICE

Phil

January 15, 2025

Take your time to read instructions before taking this test.

There are 40 questions which you are to answer in 15 minutes that gives you roughly 30 seconds per question.

If you can get at least 60%, you can be rest assured that you’ll ace ECN 205 exam

In a normal exam you will be asked between 40 – 60 questions but I only arranged 40 questions

Note

Do not be in a hurry to answer the questions

Do not waste time on a question you don’t know

Move as fast as possible and starting with questions that don’t have calculation first to save time

Always crosscheck

Don’t be in a hurry to submit, you are not in a competition

Don’t be scared. Getting an A is easy

Don’t be over confident, you can end up a D, E or F. Calm your blood, no be only you sabi book

Please do well to use our comment box incase there’s a message you want to pass to us

70 – 100 A

60 – 69 B

50 – 59 C

45 – 49 D

40 – 44 E

0 – 39 F

I wish you success

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ECN 205

1 / 50

1. Price ceilings lead to:

A. Excess supply

B. Market surpluses

C. Revenue increases

D. Shortages

2 / 50

2. A demand curve typically:

A. Remains constant

B. Slopes downwards

C. Shifts unpredictably

D. Slopes upwards

3 / 50

3. Returns to scale are constant if:

A. Inputs are doubled and output doubles

B. The sum of the exponents in the Cobb-Douglas function equals one

C. Technology is constant

D. Exponents are greater than one

4 / 50

4. A linear demand curve shows

A. Constant elasticity

B. Inelastic demand only

C. Varying elasticity

D. Perfect elasticity

5 / 50

5. Isoquants that are right-angled indicate:

A. Perfect substitutes

B. Fixed-proportions production

C. Variable proportions production

D. Increasing returns to scale

6 / 50

6. In the Lagrange method, the multiplier represents:

A. Market equilibrium

B. The optimal quantity

C. The rate of change in the objective function

D. Total cost

7 / 50

7. Excess demand occurs when:

A. Demand exceeds supply

B. Supply exceeds demand

C. Markets are saturated

D. Prices are above equilibrium

8 / 50

8. Taxation typically leads to:

A. Higher demand for goods

B. An increase in equilibrium price

C. Elimination of producer surplus

D. A deadweight loss

9 / 50

9. A perfectly competitive market involves:

A. A single seller

B. Price-making sellers

C. Homogeneous goods

D. A government monopoly

10 / 50

10. Elasticity measures:

A. Total revenue

B. Sensitivity of one variable to another

C. The absolute change in demand due to price

D. Fixed supply trends

11 / 50

11. The marginal utility of a good is the

A. Cost of producing one unit

B. Additional satisfaction from consuming one more unit

C. Total satisfaction derived from all units consumed

D. Revenue from selling additional units

12 / 50

12. Substitution effect occurs when

A. Buyers switch to cheaper alternatives

B. Sellers increase supply

C. Demand remains unaffected by price

D. Prices of substitutes remain unchanged

13 / 50

13. A utility function represents:

A. Consumer preferences and satisfaction

B. Costs of production

C. Market supply schedules

D. Revenue generated by producers

14 / 50

14. Consumer surplus is the area:

A. Outside the demand curve

B. Above the equilibrium price

C. Above the supply curve

D. Below the demand curve and above the price

15 / 50

15. An indifference curve represents:

A. Supply and demand equilibrium

B. Combinations of goods providing equal utility

C. Profit maximization levels

D. Total revenue

16 / 50

16. Cobb-Douglas production function represents:

A. A specific form of a production function

B. Constant returns to scale only

C. Fixed inputs and outputs

D. A linear relationship between inputs and outputs

17 / 50

17. Indifference curves are:

A. Downward sloping and convex to the origin

B. Upward sloping and concave

C. Constant for all preferences

D. Parallel to each other

18 / 50

18. Market supply refers to:

A. Buyers' willingness to purchase at different prices

B. Total goods sellers are willing to provide at various prices

C. Supply affected only by income changes

D. Goods produced without cost consideration

19 / 50

19. Input-output analysis examines:

A. Utility maximization

B. The interaction of various economic sectors

C. Consumer behavior

D. The elasticity of demand

20 / 50

20. Price elasticity of demand is typically:

A. Infinite

B. Negative

C. Positive

D. Zero

21 / 50

21. Elasticity of demand can be defined as:

A. Responsiveness of demand to price changes

B. Constant consumer behavior

C. The slope of the supply curve

D. Revenue divided by cost

22 / 50

22. Lagrange multipliers are used to:

A. Solve unconstrained problems

B. Analyze market equilibrium

C. Optimize under constraints

D. Measure consumer surplus

23 / 50

23. Producer surplus measures:

A. Revenue minus production costs

B. Gains above the supply curve up to the price

C. Losses below the demand curve

D. The total market surplus

24 / 50

24. The function representing revenue in economics is:

A. R = P × Q

B. R = TC × Q

C. R = Q × Q

D. R = MC × P

25 / 50

25. Mathematical economics primarily uses:

A. Computational methods

B. Literary methods

C. Historical analysis

D. Philosophical arguments

26 / 50

26. Marginal revenue is defined as:

A. Total revenue divided by quantity

B. Total cost minus profit

C. Revenue per unit sold

D. The slope of the total revenue curve

27 / 50

27. A linear demand curve shows:

A. Varying elasticity

B. Constant elasticity

C. Inelastic demand only

D. Perfect elasticity

28 / 50

28. The pioneer in applying mathematics to economics was:

A. Vilfredo Pareto

B. Cournot

C. John von Neumann

D. Alfred Marshall

29 / 50

29. The budget constraint equation is primarily used in:

A. Cost minimization problems

B. Consumer utility maximization

C. Input-output analysis

D. Elasticity calculation

30 / 50

30. Price floors result in:

A. Shortages

B. Reduced supply

C. Equilibrium prices

D. Surpluses

31 / 50

31. Consumption function refers to the relationship between:

A. Price and supply

B. Cost and revenue

C. Supply and demand

D. Income and consumption

32 / 50

32. Buyers and sellers in a perfectly competitive market are known as:

A. Price makers

B. Price takers

C. Price controllers

D. Arbitrators

33 / 50

33. The market equilibrium price is determined when:

A. Government imposes price controls

B. Quantity demanded equals quantity supplied

C. Sellers maximize profits

D. Buyers control the market

34 / 50

34. Profit is defined as the difference between:

A. Revenue and quantity

B. Revenue and cost

C. Price and cost

D. Supply and demand

35 / 50

35. Differential calculus in economics is used to study:

A. Static relationships

B. Market structures

C. Constant changes

D. Marginal analysis

36 / 50

36. Total revenue is maximized when:

A. Price elasticity equals zero

B. Average cost equals price

C. Marginal revenue equals zero

D. Marginal cost is minimized

37 / 50

37. saddle point in calculus represents

A. A point of inflection

B. Neither maximum nor minimum

C. A local minimum

D. A local maximum

38 / 50

38. The saving function shows:

A. The total demand for goods

B. The relationship between income and savings

C. The cost of producing goods

D. Revenue trends in the economy

39 / 50

39. The law of demand states that

A. Demand decreases as price increases

B. Demand increases with price

C. Demand remains constant

D. Demand is unrelated to price

40 / 50

40. Linear programming is a technique used for:

A. Profit estimation

B. Historical analysis

C. Constrained optimization

D. Market forecasting

41 / 50

41. The marginal utility of a commodity is:

A. The average utility per unit

B. Always constant

C. The total utility of consuming all units

D. The change in total utility from consuming one more unit

42 / 50

42. Utility functions are used to measure:

A. Production levels

B. Consumer satisfaction

C. Profit margins

D. Cost reductions

43 / 50

43. Marginal Propensity to Save (MPS) is defined as:

A. Change in savings due to a change in income

B. The total savings in the economy

C. Change in income due to a change in savings

D. Average savings per income

44 / 50

44. The marginal cost is derived from

A. Average cost curves

B. Total cost divided by quantity

C. Total revenue divided by price

D. The slope of the total cost curve

45 / 50

45. Marginal cost is calculated as:

A. The first derivative of the cost function

B. Average cost of all units

C. Total cost divided by quantity

D. The difference between fixed and variable costs

46 / 50

46. The degree of homogeneity in production function indicates:

A. The level of input required

B. The efficiency of labor

C. The elasticity of substitution

D. The type of returns to scale

47 / 50

47. A demand function expresses the relationship between:

A. Price and quantity demanded

B. Supply and cost

C. Income and savings

D. Price and utility

48 / 50

48. The slope of an isoquant curve represents:

A. Marginal cost

B. Marginal rate of technical substitution

C. Revenue generation

D. Profit maximization

49 / 50

49. The law of supply indicates that:

A. Lower prices increase supply

B. Higher prices increase supply

C. Higher prices reduce supply

D. Prices do not affect supply

50 / 50

50. The income effect is seen when

A. Consumers switch to higher-priced goods

B. Consumers feel wealthier due to a price decrease

C. Demand increases despite a price hike

D. Sellers reduce production costs

Your score is

The average score is 46%

ECN 205 CBT PRACTICE

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