EE Module 1 Quiz

A local municipal authority is deciding how to distribute limited funds among healthcare, education, and public transport. Which decision-making strategy best addresses the economic problem of scarcity?

• Spend the majority on luxury services to attract high-income residents

• Distribute resources to achieve the highest benefit for the largest population

• Eliminate non-essential services to limit overall demand

• Avoid intervention and allow private markets to manage services

Ravi watches tutorial videos on YouTube to learn graphic design without logging in or paying. What kind of good is he consuming?

• Economic good, as it supports learning

• Free good, as it is available without restriction or payment

• Public good, since the government provides online resources

• Capital good, because it contributes to his education

A bakery sources wheat, mills flour, bakes bread, and sells it through an app. Which step falls under the tertiary sector and why?

• Milling flour - since it alters raw material

• Baking bread - as it finalizes the product

• Selling via app - as it involves interaction with consumers

• Sourcing wheat - because it initiates production

Even with automation and green technology, why does the problem of scarcity continue to persist?

• Because all goods become more expensive over time

• Because human desires often exceed available resources

• Because resource allocation becomes perfect

• Because technology eliminates all inefficiency

A metro rail project has just been completed to support urban transportation. In terms of factors of production, how should it be categorized?

• Land - as it occupies physical space

• Capital - because it's a human-made asset used for service delivery

• Enterprise - as it combines different functions

• Labour - because construction workers were employed

What does a production possibility curve (PPC) fundamentally illustrate for an engineering firm managing two major projects (e.g., housing and road construction)?

• The number of engineers and machines used per project

• The maximum possible output combinations using available resources

• The customer preferences for each project

• The market price of each project's output

An engineering student eats slices of pizza during lunch and notices that each additional slice brings less satisfaction. This scenario best demonstrates:

• Constant marginal utility

• Increasing total utility

• Law of Diminishing Marginal Utility

• Negative marginal utility after the first slice

Why does marginal utility typically decline as more units of a product are consumed in succession?

• Consumer budgets run out quickly

• Repeated consumption leads to reduced satisfaction

• Total utility decreases after a point

• Goods become more expensive with quantity

A person consumes a fifth chocolate bar and gains no additional satisfaction from it. What would a rational consumer do next?

• Stop consuming after the fifth bar

• Continue buying to chase earlier satisfaction

• Sell earlier chocolate bars to adjust total utility

• Keep eating until utility turns negative

Two consumers evaluate the same energy-efficient air conditioner differently-one finds it highly satisfying, the other doesn't. This indicates:

• Utility cannot be measured in any form

• Utility is subjective and varies across individuals

• The less satisfied consumer is irrational

• Both have equal total utility, but different marginal utility