Second PUC Mid-Term Economics Exam

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Questions and Answers

Which branch of economics focuses on individual units rather than the economy as a whole?

Macro Economics

Positive Economics

Micro Economics (correct)

Normative Economics

Which term is used to describe goods for which demand increases as consumer income increases?

Substitutes

Normal goods (correct)

Griffen goods

Inferior goods

What does the formula TC = TFC + TVC represent in economics?

Total Cost equals Total Revenue plus Profit

Marginal Cost equals Average Cost plus Total Variable Cost

Average Cost equals Total Cost divided by Quantity

Total Cost equals Total Fixed Cost plus Total Variable Cost (correct)

In a perfectly competitive market, products are characterized as:

Homogeneous and identical Signup and view all the answers

The minimum price that can be charged for a good, set by government regulations, is known as:

Price floor Signup and view all the answers

What does 'opportunity cost' refer to in economic terms?

The value of the next best alternative foregone Signup and view all the answers

Which of the following statements about average revenue (AR) is correct?

AR is calculated by dividing total revenue by total units sold Signup and view all the answers

The concept of 'market equilibrium' is best defined as:

The price at which demand and supply are equal Signup and view all the answers

What distinguishes positive economics from normative economics?

Positive economics describes what is, whereas normative economics prescribes what ought to be. Signup and view all the answers

What does a production possibility frontier (PPF) illustrate?

The maximum potential output of two goods under given resources. Signup and view all the answers

Which of the following best describes monotonic preferences?

They indicate that more of a good is always preferred to less. Signup and view all the answers

Which of the following are short run costs?

Total fixed costs and average variable costs. Signup and view all the answers

What is the formula for price elasticity of supply?

Percentage change in quantity supplied / Percentage change in price. Signup and view all the answers

What does marginal revenue product of labor (MRP) indicate?

The additional revenue generated by hiring one more unit of labor. Signup and view all the answers

What is the main distinction between excess demand and excess supply?

Excess demand arises when demand exceeds supply, while excess supply happens when supply exceeds demand. Signup and view all the answers

Who qualifies as macroeconomic decision makers?

Governments and central banks, among others. Signup and view all the answers

Study Notes

Second PUC Mid-Term Economics Examination

Exam Duration: 3 hours
Max Marks: 80

Part A: Multiple Choice Questions

Total Marks: 5 x 1 = 5 marks
Topic Areas: Micro and Macro Economics, Positive and Normative Economics, Deductive and Inductive reasoning, Socialistic and Capitalistic Economies
Key Concepts to study: Inferior goods, Giffin goods, Normal goods, Total cost (TC), Total Variable Cost (TVC), Total Fixed Cost (TFC), Average Cost (AC), Marginal Cost (MC) , Homogeneous/Heterogeneous goods , Government Price floor.
Opportunity cost: The lost potential benefit that is forfeited when choosing one opportunity over another.

Part B: Fill in the Blanks

Total Marks: 5 x 1 = 5 marks
Key Concepts: Short-run cost curves (SMC, AVC), Cost of an activity, Labour market equilibrium.

Part C: Matching

Total Marks: 5 x 1 = 5 marks
Key Topics: Demand curve (downward sloping), Indifference map, Constant Returns to Scale (CRS), Operations of an Invisible Hand, Normal Profit, Adam Smith, Family of indifference curves.

Part D: Short Answer Questions

Total Marks: 5 x 1 = 5 marks
Key topics: Definition of Microeconomics, Indifference curves, Total Revenue (TR), Average Revenue (AR), and Market Equilibrium.

Part E: Detailed Answer Questions

Total Marks: 6 x 2 = 12 marks
Key Topics: Differentiation between Positive and Normative economics, Production Possibility Frontier, Monotonic Preference, consumer behaviour approaches, Short-run cost, Price elasticity of supply, Marginal Revenue Product of Labour (MRP), Excess demand vs. Excess supply.

Part F: Additional Detailed Questions

Total Questions: 5 x 4 = 20 marks
Key topics: Market economy, budget set, substitutes and complements, isoquant, Features of perfect competition, price ceiling, difference between Micro and Macroeconomics.

Part G: Detailed Answer Questions

Total Marks: 3 x 6 = 18 marks
Key Topics: Law of diminishing marginal utility (table and diagram), consumer optimal choice, calculation of cost curves (TVC, TC, AVC, SAC).

Part H: Project/Assignment Questions

Total marks: 2 x 5 = 10 marks
Key topics: Consumer choice with 2 goods, budget line and its implications, Consumer choice implications, Factors of Production determination

Part I: Visually Impaired Students - Additional Questions

Key topics: Total Product (TP), Marginal Product (MP), Average Product (AP), Total Revenue (TR), Marginal Revenue (MR), Average Revenue (AR).

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Description

Prepare for the Second PUC Mid-Term Economics Examination with this comprehensive quiz covering multiple choice questions, fill in the blanks, and matching exercises. Topics include micro and macroeconomics, cost curves, and opportunity cost concepts. Test your knowledge and understanding of key economic principles to excel in your exam.