Debre Tabour University
College of Busines and Economics
Time Allotted: 1hr
Academic Year: 2021/2023
Exam Date: January 2023
General Instructions
Write your meme, ID No, and Section both on the cover page and the answer sheet.
Check that your exam booklet is complete with all pages and questions.
Switched of your mobile phones (never allowed to use for calculation.
Never encircle any answer on the question papers.
Put your answers on the separate answer sheet provided.
Part I. Say true if the statement is right and false if the statement is wrong 1.
Pt each
1. Economic decision in command economies are made through a highly centralized
structure.
2. A single car demand curve contains elastic, unitary elastic and inelastic price elasticity of
3. Society's unlimited wants alone bring the foundation for the science of economics.
4. If Abebe wants a modern car, it implies that demand exists regardless of income level.
5.The basic economic question for who produce" states the distribution of goods and
service
produced in the cennomy among the society.
6.Positive economics is the study of economic doctrines based on fifty plus one mechanisms.
Part II. Chose the best answer among the given alternatives 1.5 pt each
Suppose the demand function of a consumer is given as Q = 100+ y² where y = 4, y =income
of consumer then answer (QNO7&8)
7. The income elasticity demand of a consumer is....................
8.The specifically nature of good is...................
A. Inferior
B. Normal
C. Necessity
D. Luxury
9. Assume the quantity demand for good X is increase from 1000 to 2000 when the price of
good Y is increase from birr 10 to birr 20, also the price of good X decrease from birr 15 to
birr 10 then what is the value of cross elasticity demand?
A.-3. B. 2. C. 1. D. 3
10 Based on question number 9, the nature of X and Y are.................goods?
A. Complementary. B. substitutable C. unrelated D. normal goods
11. Consider that a farmer desire to produce the two products Wheat and Maize at existing
technology, when a farmer produce only Wheat product will scarified 2000 tone Maize
where as if the farmer produce only Maize product will loss 3000 tone Wheat. Given the
information which one is true?
A. The opportunity cost of Wheat is less than Maize
B. The opportunity cost of Maize is less than Wheat
C. The opportunity cost of Wheat is 1000 tone wheat
D. None
12. Which one of the following responsible factor increases in demand for goods.
A. When income rise for inferior good
B. When the price of complementary good increase
C. When the number of consumer increase
D. When consumer imagine price good decrease after a week
13. Which one is true about production possibility curve (PPC)?
A- Adoption of new technology result to upward shift the PPC
B. Tax imposition by the government result to upward shift the PPC
C. Provision of subsidy result to downward shift the PPC.
D. All
Part III. Work out questions
14. Suppose there are 100 identical buyers in the market, individual buyer demand
schedule for Banana product is gives as follows.
Price................................Quantity Demand
15................................................200
18................................................170
21................................................140
24.................................................110
27............................,.....................90
Given the above information answer the following questions.
A. Drive the market der and function 1 pt
B. Calculate price elasticity demand based on the function obtained in "A" when price of
banana is birr 10? Interpret the result? 1.5 .pt
C. Find the maximum willingness quantity demand for banana? 1pt
