Download Ahliman Abbasov Microeconomics (Qrup 1023-1024)

Ahliman Abbasov
Microeconomics
(Qrup 1023-1024)
Test Questions
Test 1
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What is the main Economic Problem and what is the solution to that? Discuss.
Identify 10 main Principles of Economics and explain each one briefly.
Draw the Circular Flow Model and explain how it works.
Draw the Production Possibilities Frontier and explain how it works.
Define Positive and Normative Statements. Give an example of each.
Explain the term Opportunity Cost and give examples.
How do we satisfy our wants and needs in a global economy? Explain.
Which concepts are illustrated by the Production Possibilities Frontier?
Illustrate on a graph how trade expands the set of consumption possibilities.
Explain the terms Absolute Advantage and Comparative Advantage with examples.
Explain the term Competitive Market with examples.
Briefly explain the following: Perfect Competition, Monopoly, Oligopoly and Monopolistic
Competition.
Explain the term Demand and identify its determinants.
Explain the term Supply and identify its determinants.
Draw a Demand curve, show and discuss an increase and decrease in demand for a product or
service.
Draw a Supply curve, show and discuss an increase and decrease in supply for a product or
service.
Show the Supply and Demand equilibrium on a graph.
identify the terms Equilibrium Price and Equilibrium Quantity.
Define the terms Surplus and Shortage
Illustrate Excess Demand and Excess Supply on a graph.
Illustrate on a graph and discuss how an increase in Demand affects the Equilibrium.
Illustrate on a graph and discuss how a decrease in Supply affects the Equilibrium.
P$
S
$10
In a normal market economy, at equilibrium point for S and D the price of 20kg of potatoes is $10, given
D
the price of 1kg is $0.5. What happens if the demand for potatos falls? Explain and illustrate.
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0
Q kg
20 kg
Pm
S
What happens if the price of potatoes increases? Explain and illustrate.
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Pm
S
10 m
It is announced that there will be a decrease in production for the next term. How D and S are likely to
change in such a scenario? Explain and illustrate.
D
Test 2
26. Identify the term Price0Elasticity of Demand, list its determinants and show how it works on a graph.
Q kq
20 kq Inelastic Demand, Unit
27. Identify between Perfectly Inelastic Demand,
Elastic Demand, Elastic
Demand, and Perfectly Elastic as well as show the relationship between Elasticity and Total
Revenue.
28. Identify and show on a graph ranges of Elasticity of Supply.
29. Define Price Ceiling, show on a graph a binding and non-binding price ceiling and explain how it
works.
30. Define Price Floor, show on a graph a binding and non-binding price ceiling and explain how it
works.
31. Define Welfare Economics and Consumer Surplus (use graphs).
32. Show on a graph and explain how price affects Consumer Surplus.
33. Identify Producer Surplus, show it on a graph and use an example to illustrate how it is measured.
34. Show on a graph and explain how price affects Produces Surplus.
35. Using graphs illustrate and explain how Consumer Surplus and Producer Surplus are related to
Market Efficiency.
36. Explain how does Tax affect economic well-being of the market and show the effects of Tax on a
graph.
37. Show Tax Revenue on a graph and explain how Tax affects Welfare.
38. What is Deadweight Loss? Identify its determinants, show it on a graph and discuss.
39. Explain the term Efficiency of the Equilibrium Quantity using a graph as well as define Market
power.
40. Define Minimum Wage, show and discuss its relationship with Unemployment.
41. Define Rent Control, identify between short-run and long-run Rent Control.
42. Discuss and explain the term Equilibrium without Trade.
43. Discuss and explain the term World Price and Comparative Advantage.
44. Discuss and explain how free trade affects welfare in an exporting country.
45. Discuss and explain how free trade affects welfare in an importing country.
46. Discuss and explain the effects of a Tariff.
47. Discuss and explain the effects of an Import Quota.
48. Discuss and explain the relationship between Tax and Elasticities.
49. How do we satisfy our wants and needs in a global economy? Explain.
50. Define Positive and Normative Statements. Give an example of each.
Test 3
51. Define the following terms and give an example of each: private goods, public goods, common
resources, natural monopoly.
52. Discuss and explain the Free-Rider Problem.
53. What is the purpose of Cost-Benefit Analysis? Discuss and explain.
54. Discuss and explain the Tragedy of the Commons.
55. Explain and give example of excludable and rival in consumption goods.
56. Discuss and explain total revenue, total cost, profit and costs as opportunity costs.
57. Define economic profit and accounting profit. Draw production function and explain how it
works.
58. Define fixed cost, variable cost, average total cost and marginal cost. Give example of each.
59. Draw AFC, AVC, ATC and MC and explain how each of them works..
60. Discuss and explain the meaning of competition and revenue of a competitive firm.
61. Discuss the firm’s short-run decision to shut down
62. Discuss the firm’s long-run decision to enter or exit the market.
63. Discuss and explain monopoly resources, government-created monopolies and natural
monopolies.
64. Draw the demand curves for a monopoly and a competitive firm. Discuss the key differences
between the two.
65. Discuss and explain profit maximization and revenue in monopoly.
66. Discuss and explain the deadweight loss in monopoly.
67. Identify and discuss the ways to respond to the monopoly problem by the policy makers in the
government.
68. Discuss the differences between monopolistic competition and perfect competition.
69. Discuss labor demand for profit maximizing firm and indicate factors that may alter labor
demand.
70. Discuss issues related to labor supply and state factors that may alter labor supply.
71. Discuss monopolistic competition and the welfare of society.
72. Indicate graphically and discuss consumer’s optimal choice by using budget constraint and
indifference curves.
73. Explain indifference curves, comment on their properties and marginal rate of substitution.
74. Indicate graphically how income change and price change alter optimal choice. Explain income
and substitution effects in case of price change.
75. Explain graphically how equilibrium wages arise in the labor market. And show how the
equilibrium wages will change in case of increased labor supply and in case of increased labor
demand.