TMA3/ECO232

My TMA Home TMA Results My Pending TMA Quick Help TMA Quiz Questions TMA: TMA3/ECO232 Matric Number:  SCORE=10.00 ECO232 - Micro Economic Theory II Mr. Adedeji Abiodun Liadi (aliadi@noun.edu.ng ) 1 Arrow’s Impossibility theorem proves that for a social welfare function based on democratic majority decisions it is not possible to determine an optimal allocation resources the ranking of alternatives may not be cumulative the ranking of alternatives may not be transitive a change that increases satisfaction for one person cannot reduce social welfare 2 If the allocation of goods is consumption efficient then the MRS for goods are equal for all consumers the MRS is equal to the MRT the indifference curves intersect at two or more points none of the above 3 Modern Welfare economics is concerned with criteria for choosing a pareto-efficient allocation choosing among Pareto-efficient allocations positive economics none of the above 4 Economics rent is a payment for the service of land for the service of building to a factor of production that is fixed to a factor of production in excess of the amount required to retain the input in present condition 5 The locus of general equilibrium points of exchange in a two-individual, two-commodity economy is called the consumption contract curve the production contract curve the social welfare function the transformation curve 6 Arrow’s Impossibility theorem holds that it is impossible to maximize social well- being it is impossible equilibrium in the economy it is impossible to achieve Pareto –Optimality social welfare functions cannot be achieved democratically 7 The models of monopolistic competition and perfect competitive differ in that there are many sellers in perfect competition products are slightly differentiated in monopolistic competition firms in perfect competition maximizes profit there is perfect information in monopolistic competition 8 Which of these is not the property of isoquant non-intersecting positive slope cardinal scale measurement increase in value to the northeast 9 The amount of an input that can be replaced by one unit of another input, such that output is held constant is called marginal value input marginal rate of technical complimentary marginal rate of technical substitution marginal rate of substitution 10 An input is “technically efficient” if it cheaper than another input combination only if it utilizes less of each input than another input combination if a reduction in the quantity of any one of the inputs forces a reduction in output all of the above 11 The MRTS is equal to the isoquant at a point the ratio of the marginal products of the two inputs the negative value of the slope of the isoquant at a point all of the above 12 A shift of isoquant to the right means less output more input more output more input 13 Given the following demand and supply functions, find the equilibrium price and quantity in the market: demand: QD = 100 – P; supply: P=10 + 2Q2 N70 and 30units N30 and 70 units N50 and 50units N45 and 55units 14 The slope of supply curve is normally expected to be positive negative zero -2 15 When both the price of a substitute and the price of a complement of commodity X rise, the demand for X rises falls remain unchanged all of the above are possible 16 If the supply curve shifts right and the demand curve shifts left the price will decrease and the quantity change will be indeterminate the price will decrease and the quantity change will be indeterminate the quantity will increase and the price change will be indeterminate the quantity will decrease and the price change will be indeterminate 17 If the supply curve shifts left, the equilibrium price will increase decrease remain constant none of the above 18 Which of the following will shift the supply curve a change in quantity demanded a change in price of inputs a change in the price of the product all of the above 19 Returns to scale are property of the demand function cost function production function isoquant 20 The elasticity of technical substitution is measured by the slope of the isoquant the change in the slope of the isoquant the ratio of factor inputs none of the above