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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. Consumer surplus is the area:

A. Below the demand curve and above the price

B. Outside the demand curve

C. Above the equilibrium price

D. Above the supply curve

2 / 50

2. Lagrange multipliers are used to:

A. Analyze market equilibrium

B. Optimize under constraints

C. Solve unconstrained problems

D. Measure consumer surplus

3 / 50

3. A perfectly competitive market involves:

A. A single seller

B. Price-making sellers

C. Homogeneous goods

D. A government monopoly

4 / 50

4. Cobb-Douglas production function represents:

A. A specific form of a production function

B. Constant returns to scale only

C. A linear relationship between inputs and outputs

D. Fixed inputs and outputs

5 / 50

5. The law of demand states that

A. Demand increases with price

B. Demand decreases as price increases

C. Demand remains constant

D. Demand is unrelated to price

6 / 50

6. A linear demand curve shows

A. Varying elasticity

B. Inelastic demand only

C. Perfect elasticity

D. Constant elasticity

7 / 50

7. Price floors result in:

A. Surpluses

B. Shortages

C. Reduced supply

D. Equilibrium prices

8 / 50

8. An indifference curve represents:

A. Supply and demand equilibrium

B. Total revenue

C. Combinations of goods providing equal utility

D. Profit maximization levels

9 / 50

9. Substitution effect occurs when

A. Buyers switch to cheaper alternatives

B. Prices of substitutes remain unchanged

C. Sellers increase supply

D. Demand remains unaffected by price

10 / 50

10. The slope of an isoquant curve represents:

A. Marginal cost

B. Profit maximization

C. Revenue generation

D. Marginal rate of technical substitution

11 / 50

11. Consumption function refers to the relationship between:

A. Cost and revenue

B. Price and supply

C. Supply and demand

D. Income and consumption

12 / 50

12. Producer surplus measures:

A. The total market surplus

B. Losses below the demand curve

C. Gains above the supply curve up to the price

D. Revenue minus production costs

13 / 50

13. Marginal cost is calculated as:

A. The difference between fixed and variable costs

B. Average cost of all units

C. Total cost divided by quantity

D. The first derivative of the cost function

14 / 50

14. Price elasticity of demand is typically:

A. Zero

B. Negative

C. Infinite

D. Positive

15 / 50

15. The market equilibrium price is determined when:

A. Buyers control the market

B. Sellers maximize profits

C. Quantity demanded equals quantity supplied

D. Government imposes price controls

16 / 50

16. Indifference curves are:

A. Parallel to each other

B. Constant for all preferences

C. Downward sloping and convex to the origin

D. Upward sloping and concave

17 / 50

17. The law of supply indicates that:

A. Lower prices increase supply

B. Prices do not affect supply

C. Higher prices reduce supply

D. Higher prices increase supply

18 / 50

18. The saving function shows:

A. The relationship between income and savings

B. Revenue trends in the economy

C. The cost of producing goods

D. The total demand for goods

19 / 50

19. Market supply refers to:

A. Goods produced without cost consideration

B. Buyers' willingness to purchase at different prices

C. Supply affected only by income changes

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

20 / 50

20. The degree of homogeneity in production function indicates:

A. The efficiency of labor

B. The elasticity of substitution

C. The type of returns to scale

D. The level of input required

21 / 50

21. In the Lagrange method, the multiplier represents:

A. The rate of change in the objective function

B. Total cost

C. Market equilibrium

D. The optimal quantity

22 / 50

22. The budget constraint equation is primarily used in:

A. Elasticity calculation

B. Input-output analysis

C. Consumer utility maximization

D. Cost minimization problems

23 / 50

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

A. Price takers

B. Price makers

C. Arbitrators

D. Price controllers

24 / 50

24. saddle point in calculus represents

A. Neither maximum nor minimum

B. A local maximum

C. A point of inflection

D. A local minimum

25 / 50

25. Linear programming is a technique used for:

A. Profit estimation

B. Historical analysis

C. Market forecasting

D. Constrained optimization

26 / 50

26. Total revenue is maximized when:

A. Marginal cost is minimized

B. Average cost equals price

C. Marginal revenue equals zero

D. Price elasticity equals zero

27 / 50

27. Elasticity of demand can be defined as:

A. The slope of the supply curve

B. Responsiveness of demand to price changes

C. Revenue divided by cost

D. Constant consumer behavior

28 / 50

28. Marginal revenue is defined as:

A. Total cost minus profit

B. Revenue per unit sold

C. The slope of the total revenue curve

D. Total revenue divided by quantity

29 / 50

29. The marginal utility of a commodity is:

A. Always constant

B. The average utility per unit

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

D. The total utility of consuming all units

30 / 50

30. A linear demand curve shows:

A. Perfect elasticity

B. Inelastic demand only

C. Varying elasticity

D. Constant elasticity

31 / 50

31. Input-output analysis examines:

A. Consumer behavior

B. Utility maximization

C. The interaction of various economic sectors

D. The elasticity of demand

32 / 50

32. Isoquants that are right-angled indicate:

A. Increasing returns to scale

B. Variable proportions production

C. Perfect substitutes

D. Fixed-proportions production

33 / 50

33. Taxation typically leads to:

A. Elimination of producer surplus

B. A deadweight loss

C. Higher demand for goods

D. An increase in equilibrium price

34 / 50

34. A demand curve typically:

A. Shifts unpredictably

B. Slopes downwards

C. Slopes upwards

D. Remains constant

35 / 50

35. 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

36 / 50

36. Elasticity measures:

A. Total revenue

B. The absolute change in demand due to price

C. Sensitivity of one variable to another

D. Fixed supply trends

37 / 50

37. Price ceilings lead to:

A. Market surpluses

B. Shortages

C. Excess supply

D. Revenue increases

38 / 50

38. The income effect is seen when

A. Sellers reduce production costs

B. Consumers switch to higher-priced goods

C. Demand increases despite a price hike

D. Consumers feel wealthier due to a price decrease

39 / 50

39. The function representing revenue in economics is:

A. R = TC × Q

B. R = MC × P

C. R = Q × Q

D. R = P × Q

40 / 50

40. The marginal cost is derived from

A. Average cost curves

B. Total revenue divided by price

C. Total cost divided by quantity

D. The slope of the total cost curve

41 / 50

41. A utility function represents:

A. Costs of production

B. Market supply schedules

C. Consumer preferences and satisfaction

D. Revenue generated by producers

42 / 50

42. Excess demand occurs when:

A. Markets are saturated

B. Demand exceeds supply

C. Supply exceeds demand

D. Prices are above equilibrium

43 / 50

43. Utility functions are used to measure:

A. Production levels

B. Cost reductions

C. Consumer satisfaction

D. Profit margins

44 / 50

44. Profit is defined as the difference between:

A. Supply and demand

B. Revenue and cost

C. Price and cost

D. Revenue and quantity

45 / 50

45. A demand function expresses the relationship between:

A. Price and quantity demanded

B. Income and savings

C. Supply and cost

D. Price and utility

46 / 50

46. Mathematical economics primarily uses:

A. Literary methods

B. Philosophical arguments

C. Computational methods

D. Historical analysis

47 / 50

47. Returns to scale are constant if:

A. Exponents are greater than one

B. Inputs are doubled and output doubles

C. Technology is constant

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

48 / 50

48. The marginal utility of a good is the

A. Total satisfaction derived from all units consumed

B. Revenue from selling additional units

C. Cost of producing one unit

D. Additional satisfaction from consuming one more unit

49 / 50

49. The pioneer in applying mathematics to economics was:

A. Vilfredo Pareto

B. Alfred Marshall

C. Cournot

D. John von Neumann

50 / 50

50. Differential calculus in economics is used to study:

A. Static relationships

B. Marginal analysis

C. Market structures

D. Constant changes

Your score is

The average score is 46%

ECN 205 CBT PRACTICE

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