Section A: Answer ALL Questions (Choose the correct answer)

1. What is Microeconomics?
A. A branch of Economics that is concerned with economic activities of the consumers only
B. A branch of Economics that is concerned with economic activities of the producers only
C. The study of an economy as a whole
D. A branch of Economics that studies the economic decisions of individuals and firms in allocation of resources of production, exchange, and consumption.

2. All the following are the theoretical assumptions of the Cardinalist school except:
A. The consumer is rational
B. Utility is measurable
C. The marginal utility of money changes
D. The marginal utility declines as more units of a commodity are consumed

3. The consumer is at equilibrium if:
A. The price of a commodity is greater than the marginal utility associated with consuming the commodity
B. The additional satisfaction the consumer derives outweighs the price of the commodity
C. The marginal utility of consuming the commodity equals its price
D. The consumer's income equals the utility in consuming the commodity

4. All the following are types of isoquants a producer faces except:
A. Linear isoquant
B. Input-output isoquant
C. Concave isoquant
D. Kinked isoquant

5. The Law of Diminishing Returns states that:
A. All factors of production are variable in the long-run
B. In the short-run some factors are variable while some other factors are fixed
C. All factors are variable in both the short-run and long-run
D. None of the above

6. The producer is said to be at equilibrium if:
A. The ratio of marginal product of the inputs is equated to the ratio of the respective factor prices
B. The ratio of the marginal product of a given factor input to its respective factor price is equated to this same ratio with respect to another factor input
C. None of the above
D. A & B

7. Under the short-run, the traditional theory of cost asserts that:
A. All the cost curves are U-shaped
B. Some are U-shaped while others are L-shaped