Question

Match the economic concepts given in COLUMN A with its description in COLUMN B. Write down the question number and the correct letter next to it. E.g. 2.11 A
COLUMN A
COLUMN B
2.1
Production Possibility Frontier (PPF)

   a.All people who live together and who make joint economic decisions or who are subjected to others who make such decision.
2.2
Cross elasticity of demand

b. Monetary payments for the factors of production and other inputs bought or hired by the firm.
2.3
Household

   c.The summation of total fixed cost plus total variable cost.
2.4
Market Supply

   d.This occurs when none of the individual market participants can influence the price of the product.
2.5
Explicit costs

   e.The ability and willingness to buy specific quantities of a good at alternatives prices in a given time period
2.6
Perfect competition

   f.Costs per unit of output fall as the scale of production increases.
2.7
Economies of scope

   g. Shows a combination of two different products that could be produced to their maximum at a given point in time, given the full u    utilization of available resources and technology.
2.8
Returns to scale
  
h Percentage change in price of one product divided by percentage change in the price of a related product.
2.9
Economies of scale

   i.The relationship between the price of the product and the quantities supplied (by all firms) during a particular period.
2.10
Demand

   j.These are cost savings achieved by producing related goods in one firm rather than in two separate firms.

   k.Measured by varying all the inputs by a certain percentage and comparing the resulting percentage change in production with the    percentage change in the inputs.

   l.Best return that the firm’s self-owned, self – employed resources could earn elsewhere.

m.Focuses on the individual participants in the economy: producers, workers, employers and consumers.

   n.Opportunity costs not reflected in monetary payments of factors of production

Answer 1

2.1- g. The production possibility frontier shows a combination of two different products that could be produced to their maximum at a given point in time, given the full utilization of available resources and technology.

2.2-h. The cross elasticity measures the Percentage change in price of one product divided by percentage change in the price of a related product.

2.3- a. All people who live together and who make joint economic decisions or who are subjected to others who make such decision.

2.4- i- The relationship between the price of the product and the quantities supplied (by all firms) during a particular period.

2.5- b.Monetary payments for the factors of production and other inputs bought or hired by the firm

2.6-d. This occurs when none of the individual market participants can influence the price of the product.

2.7- j- These are cost savings achieved by producing related goods in one firm rather than in two separate firms.

2.8- k- Measured by varying all the inputs by a certain percentage and comparing the resulting percentage change in production with the    percentage change in the inputs.

2.9- f. Costs per unit of output fall as the scale of production increases.

2.10- e. The ability and willingness to buy specific quantities of a good at alternatives prices in a given time period