Course Title: Microeconomics ElE115 Lecturer:

Dr/Nouran Abdelhamid Abdelgawwad

Revision sheet for final
Complete the table

Q FC VC TC price AFC AVC ATC MC TR MR PROFIT

0 100 0 100 -- 0 0 ---- ---- 0 --- 0
3 100 36 42 33.3 12 45.3 12 126 -10
5 100 76 40 37 24
7 100 120 220 38 14.3 31.4 22
9 100 178 36 19.8 29
11 100 260 360 34 9.1 32.7 14
• What is the quantity of production that maximizes profits?
• Is the market competitive or monopolistic?

Write the correct answer on the cyrcle. ( 2 marks )

a. Elasticity < 1 b. Elasticity = zero c. Elasticity = d. Elasticity > 1

Choose the correct answer (9 Marks):
1- A 10 percent increase in the quantity of spinach demanded results from a 20 percent
decline in its price. The price elasticity of demand for spinach is
a. 10.0.
b. 2.0.
c. 0.5.
d. 20.0.
2- An important determinant of the price elasticity of supply is the extent to which
a. the commodity is a luxury or a necessity.
b. the product has many substitutes for components.
c. production requires the use of particularly scarce or specialized resources.
d. the demand for it is both price and income elastic.
3- If fixed costs do not change, then marginal cost
a. equals the change in average variable cost divided by the change in
output.
b. equals the change in variable cost divided by the change in output.
c. also remains constant.
d. equals the change in average fixed cost divided by the change in output.
4- Joan's income has just risen from $940 per week to $1,060 per week. As a result, she
decides to purchase 12 percent more lettuce per week. The income elasticity of Joan's
demand for lettuce is
a. 1.33.
b. 1.00.
c. 0.90.
d. 0.75.
5- If the cross elasticity of demand between goods A and B is negative,
a. A and B are complements.
b. the demands for A and B are both price inelastic.
c. A and B are substitutes.
d. the demands for A and B are both price elastic.
6- In 2000, if Average variable cost (AVC) = 500, quantity of output = 200 and ATC = 800
, So AFC =…..
a. 3
b. 30
c. 3000
d. 300
7- Refer to Table. What is the Average fixed cost of production when the firm produces
2 unit

Q TFC TVC TC AFC AVC ATC MC

0 50 0 50 ---- ---- ---- ----
1 20 50 70
2 50 100 30
3 50 90 30 40
4 190 12.50 47.50
5 50 40 60

a. 47.5
b. 140
c. 25
d. 30

8- Suppose the value of the income elasticity of demand is -3. What does this mean?
a. the good is substitute
b. the good is luxury
c. the good is normal
d. the good is inferior
9- If the price of kilo meat falls from $9 to $6 and the elasticity of demand for meat = -
1.1 , so the quantity demanded increases from 90 to ……..kilo.
a. 105 kilo
b. 139 kilo
c. 120 kilo
d. 111 kilo
 10- If the price of kilo milk increases from $1 to $2 and the quantity demanded
decreases from 90 to70 liter, so the elasticity of demand for milk = …….
a. 0.2
b. 1.2
c. 12
d. 0.11
11. A 10 percent increase in income has caused a 5 percent decrease in the quantity
demanded. The income elasticity is
a. -2.0.
b. 2.0.
c. -0.5.
d. 0.5.
12. A characteristic of the short run is
a. there are both fixed and variable inputs.
b. all inputs can be fixed.
c. all inputs can be varied.
d. output decrease
13. A fall in the price of cabbage from $10.50 to $9.50 per bushel increases the quantity
demanded from 18,800 to 21,200 bushels. The price elasticity of demand is
a. 1.25.
b. 0.80.
c. 1.20.
d. 8.00.
14. A rise in the price of a product lowers the total revenue from the product if the
a. demand for the product is elastic.
b. income elasticity of demand exceeds
c. demand for the product is inelastic.
d. good is an inferior product.
15. Engy sells Lebanese sandwiches. The cost of ingredients (bread, meat, spices, etc.) to
make a sandwich is US$2.00. Engy pays her employees US$60 per day. She also incurs a
fixed cost of US$100 per day. Calculate Engy's total cost per day when she produces 20
sandwiches using three workers?
a. US$320
b. US$340
c. US$100
d. US$ 385
16. Goods whose income elasticities are negative are called
a. complements.
b. inferior goods.
c. normal goods.
d. superior goods.
17. Marginal cost is equal to the
a. change in total cost over the change in output.
b. change in average product divided by the change in output.
c. change in average total costs divided by the change in output.
d. change in total product divided by the change in output.
18. The cross elasticity of demand measures the responsiveness of the quantity demanded
of a particular good to changes in the prices of
a. its substitutes but not its complements.
b. its complements but not its substitutes.
c. its substitutes and its complements.
d. neither its substitutes nor its complements.
19. The cross elasticity between two commodities Iron quantity demanded and Cement price
shell be in a ........ sign
a. negative
b. positive
c. sometimes positive and sometimes negative
20. The elasticity of supply equals ________ if the supply curve is horizontal.
a. infinity
b. 1
c. -1
d. 0
4- The benefit from pursuing an incremental increase in an activity is its
a. Marginal cost
b. Average benefit
c. Average cost
d. marginal benefit.
5- If the economic utility of the first slice of pizza is ten utils, the utility of the second
slice is …. Utils.
a. Zero
b. Twelve
c. Eight
d. More than ten
6- A scatter diagram …..
e. plots the value of one variable against the value of another variable for a number
of different values of each variable.
f. reveals whether a relationship exists between the two variables.
g. We shall do it before drawing the curve
h. All of them
7- The production function shows
a. the relation between input changes and output changes.
b. It shows the maximum amount of output that can be obtained by the firm from a
fixed quantity of resources.
c. the relation between a firms physical production and the material factors of
production.
d. All of the above
8- Variables That Move in the Same Direction means ….
a. a negative relationship
b. a positive relationship.
c. no relationship.
d. no one of them
9- If the relationship is Positive, becoming steeper, the slope is ….
a. Falling
b. Increased
c. Fixed
d. No one of them
10- Stages of production are …
a. Two (Increasing return and diminishing return)
b. One (Increasing return)
c. Three (Increasing return and diminishing return and negative return)
d. No one of them
 11- ….. is the amount of satisfaction that you will get from the consumption of a product
or service.
a. Profits
b. Demand
c. Production
d. Utility
12- Increasing income ……
a. shifts demand curve leftward.
b. shifts demand curve rightward
c. doesn’t effect demand curve
d. shifts supply curve leftward
13- Assume that an individual has income (I) dollars to allocate between good x and
good y. he should spend ….
a. PQX + PQy > I
b. PQX + PQy ≤ I
c. PQX + PQy = I2
d. No one of them

Choose the correct answer (9 Marks)

1- Market structure and regulations is covered by macroeconomics science.

2- The long- run is defined as the period over which all factors of production are
variable, within the confines of existing technology.
3- Often the dependent variable is represented on the horizontal axis of the graph.
4- If the price of a good is expected to rise in the future, supply of the good today
decreases and the supply curve shifts leftward.
5- Tax policies and the structure of the tax system are covered by microeconomic .
6- A relationship shown by a straight line is called a linear relationship.
7- Marginal Product is the total product per unit of the variable factor.
8- Some economists believe that they can indirectly estimate what is the utility of an
economic good or service by employing various models.
9- Advances in technology is often decrease supply.

Thank you,,,