Answer ALL questions. Each question carries ONE (1) mark.
State whether each of the following statements is TRUE or FALSE.
1. Utility is easily measured and quantified.
2. Economic models explore decision making by individuals, firms and other
organizations.
3. A key assumption of most economic analysis is that people act rationally, meaning
they respond to incentives.
4. Macroeconomics helps explain economic fluctuations, why the economy shrinks and
expands and why some of the economy's resources are idle.
5. One example of a microeconomic question is, "How will prices in the satellite TV
industry change if a new firm enters the market?"
6. The opportunity cost of going to a particular college is not the same for everyone.
7. Economists argue that individuals should continue to consume until total benefit
equals total cost.
8. According to the principle of diminishing returns, an additional worker decreases total
output.
9. The market demand curve shows the relationship between the price and the quantity
demanded by all consumers, everything else being equal.
DIPLOMA Sessional Structured Timed Assignment
July – December BEC611 – Economics I
© BOU 2022 Page 5 of 6
10. The price elasticity of demand is constant along a downward -sloping linear demand
curve.
1. FALSE
2. TRUE
3. TRUE
4. TRUE
5. TRUE
6. TRUE
7. FALSE
8. FALSE
9. TRUE
10. FALSE