Question

Q2: Circle (i.e. put a circle around) the correct answer-option"

1-Assume an economist observes three interrelated variables: annual Income (1), skill/education level (D) and age (G) then,

a-In static analysis, an economist could assume any functional relationships and proceed.

b-in static analysis, an economist has to use a crutch"...the assumption of: Ceteris Paribus.

2-"Utility", the analytical concept, is used to interpret a consumer's joie de vie / contentedness when consuming a good/commodity or enjoying a service, therefore...

a-A good's "Utility" could increase endlessly as long as a consumer has enough income to satisfy his/her
needs.

b-by observing the consumptive behavior of two persons, at a given time, we could deduct the one with more money.

3-When two goods: g&k are consumed as "compliments" (=consumption jointness) then,

a-a rise in the price of: g (=Pg.) should lead to a decrease in the quantity of:k (=Qk).

b-an increase in Qg should be attributed to an increase in Pk.

4-When demand for any two goods/services is labelled: "independent", then...

a-the two goods/services each contribute separately to one's utility/satisfaction

b-the relative contribution of each good/service (-utility) has to be equal in terms of "utils".

5-As empirical observation, thirty five years ago you would have found no one willing to pay two Saudi Riyals a meter for a lot along "Salman Gulf / Ubhur/ Jeddah). But, due to cultural changes such as:

preference to enjoy open-see residences, social distancing, interest in sea sports...etc. the price of a square meter has increased by more than 150 folds. Technological changes in marsh engineering made it possible.

a-all-of-the-above.
b-none-of-the-above.

Answer 1

1-Assume an economist observes three interrelated variables: annual Income (1), skill/education level (D) and age (G) then,

Ans: b- ''in static analysis, an economist has to use a crutch"...the assumption of: Ceteris Paribus.

The assumption of ceteris paribus, a Latin phrase meaning "with other things the same" or "other things being equal or held constant," is important in determining causation. It helps isolate multiple independent variables affecting a dependent variable. And since static analysis studies only a particular point of equilibrium it uses the assumption of ceteris paribus.

2-"Utility", the analytical concept, is used to interpret a consumer's joie de vie / contentedness when consuming a good/commodity or enjoying a service, therefore,

Ans: b- By observing the consumptive behavior of two persons, at a given time, we could deduct the one with more money.

Utility can never be increase endlessly in an continuous consumption even if the consumer has sufficient income due to the operation of the Law of Diminishing Marginal Utility.

3-When two goods: g&k are consumed as "compliments" (=consumption jointness) then,

Ans: a- A rise in the price of: g (=Pg.) should lead to a decrease in the quantity of:k (=Qk).

Complementary goods will have a negative cross elasticity of demand. If the price of one good increases, demand for both complementary goods will fall.

4-When demand for any two goods/services is labelled: "independent", then,

Ans: a- The two goods/services each contribute separately to one's utility/satisfaction.

5-As empirical observation, thirty five years ago you would have found no one willing to pay two Saudi Riyals a meter for a lot along "Salman Gulf / Ubhur/ Jeddah). But, due to cultural changes such as:
preference to enjoy open-see residences, social distancing, interest in sea sports etc. The price of a square meter has increased by more than 150 folds. Technological changes in marsh engineering made it possible.

Ans: a- all-of-the-above.