ECO 121 TMA SOLUTIONS 1

TMA 1

1 Change in input price, government policy, organizational change may lead to_.

*higher cost of production for a firm


2 Income and substitution effects are better use in explaining the link between_ and _.

*demand and price


3 Quantity of a commodity purchased by an individual or family or group of people at different prices at a given time and place is known as the _.

*demand for such commodity


4 Goods and services usually referred to as _are produced by firms while household individuals are the _ of the commodities.

*‘Commodities’ , consumers


5 In a _ economy, the economic decision are made based on _, _ and _ of that society.

*traditional; believes, norms, religion and customs


6 In a controlled economy, it is the _ that makes the economic decision and it is solely done, meaning that there are no _ initiatives.

*government, private sector


7 Free market economy or market economy is an economic system where the basic economic decisions are made by the buyers and sellers, individual households and businesses in the economy_mechanism

*through the price


8 In Mixed economy, economic decision on what to produce; how and where to produce; for whom to produce; is made jointly by the_ and _ sectors in the economy.

*government and the pr ivate


9 _ and _work together to answer basic economic problems in relation to the resources in the society and its _

*individual and institutions, scarcity


10 An economic system consists of _, _ and their interaction in the process of answering basic_.

*individual, institutions; economic problems


11 _ have its influence on human behavior which determines their decisions in answering basic 

*Social institutions, economic problem


12 In Market economy, _ are made by the invisible hand of market forces.

*decisions, invisible hand


13 Thorough evaluation and rating of_ from most valued to least valued is a required step in arriving at a _ of what to produce.

*goods and services, decision


14 Human wants are unlimited and ever dynamic due to ever changing _ and needs for _which are limited.

*demands, resources


15 There is the need to strike a balance between _ and _ human wants.

*scarce resources and unlimited, insatiable


16 In making a decision, we implicitly compare the _ of our _ over the other one.

*costs and benefits, choices


17 Capitalist Economy is usually an _ while the aim of a _ is social control

*occupational freedom, Socialist Eco nomy


18 The term rationality is somewhat deceptive according to _

*Friedman (1990)


19 The decisions made by _ , _ and _are vital to their survival.

*individuals, corporations and gov ernments


20 Famous economists includes all except

*Alfred Sha llmar

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