ENS191 QUIZ 1

Question 1

The analysis and evaluation of the factors that will affect the economic success of engineering projects to the end that a recommendation is made which will insure the best use of capital.

Answer 1

Engineering Economy

Question 2

The quantity of a certain commodity that is bought at a certain price at a given place and time.

Answer 2

Demand

Question 3

The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.

Answer 3

Supply

Question 4

Market participants selling goods and services.

Answer 4

Producers

Question 5

Market participants buying goods and services.

Answer 5

Consumers

Question 6

The economic price for which good or service is offered in the marketplace.

Answer 6

Market Price

Question 7

It is significantly affected by the demand, availability of substitutes and the competitive landscape.

Answer 7

Market Price

Question 8

What are the factors that affect demand?

Answer 8

P -Price of other goods (substitute or complementary)

O - Outlook (consumer expectation of future income and prices)

I - Income (normal goods versus inferior goods)

N - Number of potential costumers (popularity of market)

T- Taste (fads or fashion)

Question 9

What are the factors affecting supply?

Answer 9

P - Productivity (improvements in machines and production processes of a good or service)

I - Inputs (change in the price of inputs required to produce the good or service)

G - Government Actions (subsidies, taxes and regulations)

T - Technology (improvements in machines and production processes of a good or service)

O - Outputs (price changes in other products produced by the firm)

E - Expectations (outlook of future prices and profits)

S - Size of industry (number of firms in the industry)

Question 10

When the price of a product is increased, less will be demanded.

Answer 10

Law of Demand

Question 11

Quantity demanded and price are negatively related.

Answer 11

Law of Demand

Question 12

Give the two reasons of law of demand.

Answer 12

income effect and substitution effect

Question 13

More will be supplied as prices increase.

Answer 13

Law of Supply

Question 14

Quantity supplied and price are positively related.

Answer 14

Law of Supply

Question 15

Give the reason for the law of supply.

Answer 15

Profitability

Question 16

The price-quantity pair where the quantity demanded is equal to quantity supplied, represented by the intersection of the demand and supply curves.

Answer 16

Equilibrium

Question 17

The price for which the demand and supply for good or service are equal.

Answer 17

Equilibrium Price

Question 18

The amount of output exchanged at the equilibrium price.

Answer 18

Equilibrium Quantity

Question 19

If demand increases and supply remain unchanged, then it leads to _____ equilibrium price and _____ quantity.

Answer 19

higher, higher

Question 20

If demand decreases and supply remain unchanged, then it leads to _____ equilibrium price and _____ quantity.

Answer 20

lower, lower

Question 21

If supply increases and demand remain unchanged, then it leads to _____ equilibrium price and _____ quantity.

Answer 21

lower, higher

Question 22

If supply decreases and demand remain unchanged, then it leads to _____ equilibrium price and _____ quantity.

Answer 22

higher, lower

Question 23

When the use of one of the factors of production is limited, either in increasing cost or by absolute quantity, a point will be reach beyond which an increase in the variable factors will result in a less than proportionate increase in output.

Answer 23

The Law of Diminishing Returns

Question 24

At the start, every unit of input leads to the productive gains.

Answer 24

Productive Phase

Question 25

Upon hitting the point of _____, every additional input will give you a slower gain in output.

Answer 25

Diminishing Returns

Question 26

If you reach this phase, every additional input will give you _____.

Answer 26

Negative Returns

Question 27

Those products of services that are directly used by people to satisfy their wants.

Answer 27

Consumer goods and services

Question 28

It is used to produce consumer goods and services or other producer goods.

Answer 28

Producer goods and services

Question 29

Give examples for consumer goods and services

Answer 29

Iphone13, cars, hair color/rebonding

Question 30

Give examples for producer goods and services

Answer 30

metals, semi-conductors, electricity

Question 31

Give 4 types of market structure

Answer 31

1. Monopolistic competition 2. Oligopoly 3. Monopoly 4. Perfect competition

Question 32

It occurs in a situation where a commodity or service is supplied by a number of vendors and there is nothing to prevent additional vendors entering the market.

Answer 32

Perfect competition

Question 33

It is the opposite of perfect competition. It exists when a unique product or service is available from a single vendor and that vendor can prevent the entry of all others into the market.

Answer 33

Monopoly

Question 34

It is characterized by a large number of firms, none of which can influence market price by virtue of size alone.

Answer 34

Monopolistic Competition

Question 35

New firms can enter and established firms can exit such an industry with ease.

Answer 35

Monopolistic Competition

Question 36

Some degree of market power is achieved by firms producing differentiated products.

Answer 36

Monopolistic Competition

Question 37

It is a strategy that firms use to achieve market power.

Answer 37

Product Differentiation

Question 38

It is accomplished by producing products that have distinct positive identities in consumer's minds.

Answer 38

Product Differentiation

Question 39

A form of industry (market) structure characterized by a few dominant firms.

Answer 39

Oligopoly

Question 40

The behavior of any one firm in an _____ depends to a great extent on the behavior of others.

Answer 40

Oligopoly

Question 41

It exists when there are so few suppliers of a product or service that action by one will almost inevitably result in similar action by the others.

Answer 41

Oligopoly

Question 42

How many number of firms in perfect competition?

Answer 42

Many

Question 43

How many number of firms in monopoly?

Answer 43

One

Question 44

How many number of firms in monopolistic competition?

Answer 44

Many

Question 45

How many number of firms in oligopoly?

Answer 45

Few

Question 46

Is perfect competition product differentiated or homogeneous?

Answer 46

Homogeneous

Question 47

Is monopoly product differentiated or homogeneous?

Answer 47

A single, unique product

Question 48

Is monopolistic competition product differentiated or homogeneous?

Answer 48

differentiated

Question 49

Is oligopoly product differentiated or homogeneous?

Answer 49

Either

Question 50

In perfect competition, is price a decision variable?

Answer 50

No

Question 51

In monopoly, is price a decision variable?

Answer 51

Yes

Question 52

In monopolistic competition, is price a decision variable?

Answer 52

Yes, but limited

Question 53

In oligopoly, is price a decision variable?

Answer 53

Yes

Question 54

In perfect competition, is it easy entry?

Answer 54

Yes

Question 55

In monopoly, is it easy entry?

Answer 55

No

Question 56

In monopolistic competition, is it easy entry?

Answer 56

Yes

Question 57

In oligopoly, is it easy entry?

Answer 57

Limited

Question 58

Perfect competition is distinguished by?

Answer 58

No price competition

Question 59

Monopoly is distinguished by?

Answer 59

Still constrained by market demand

Question 60

Monopolistic competition is distinguished by?

Answer 60

Price and quality competition

Question 61

Oligopoly is distinguished by?

Answer 61

Strategic behavior

Question 62

Give examples for perfect competition.

Answer 62

Wheat farming and textile firm

Question 63

Give examples for monopoly.

Answer 63

Public utility and patented drug

Question 64

Give examples for monopolistic competition.

Answer 64

Restaurants and clothing stores

Question 65

Give examples for oligopoly.

Answer 65

Manufacturing industries (automobiles, computers)