• ECS2601 – Microeconomics Application (UNISA)
Exam Guide 2025/2026 | Complete Test Bank,
Notes & Past Papers with 200+ Verified Practice
Questions, Answers, and Detailed Rationales |
Comprehensive Study Resource for UNISA
Economics, Business, and BCom Students
QUESTION: 1:
What is the definition of microeconomics?
A) The study of national economic systems
B) The branch of economics that focuses on individual consumers and firms and
their decision-making processes
C) The analysis of international trade
D) The study of government policies
RATIONALE: Microeconomics is essential for understanding how individual choices
impact supply and demand in markets.
QUESTION: 2:
What does the law of demand state?
A) Demand increases as price increases
B) There is an inverse relationship between price and quantity demanded
C) Supply increases as demand increases
D) Demand remains constant regardless of price changes
RATIONALE: The law of demand illustrates how consumers respond to price
changes, a fundamental concept in microeconomics.
QUESTION: 3:
What is meant by "price elasticity of demand"?
A) The responsiveness of supply to price changes
B) The measure of how much the quantity demanded of a good responds to a
change in its price
C) The fixed demand for essential goods
D) The relationship between price and income
RATIONALE: Price elasticity of demand is crucial for businesses to set prices and
forecast revenues effectively.
QUESTION: 4:
What is a "normal good"?
, • ECS2601 – Microeconomics Application (UNISA)
Exam Guide 2025/2026 | Complete Test Bank,
Notes & Past Papers with 200+ Verified Practice
Questions, Answers, and Detailed Rationales |
Comprehensive Study Resource for UNISA
Economics, Business, and BCom Students
A) A good with no substitutes
B) A good for which demand increases as consumer income rises
C) A good that is always necessary
D) A good with a fixed price
RATIONALE: Understanding normal goods helps in analyzing consumer behavior
regarding income changes.
QUESTION: 5:
What does "market equilibrium" refer to?
A) The point where supply exceeds demand
B) The situation where quantity supplied equals quantity demanded, resulting in
stable prices
C) The point of maximum profit for firms
D) The point where demand outstrips supply
RATIONALE: Market equilibrium is fundamental for understanding how prices stabilize
in a competitive market.
QUESTION: 6:
What is "consumer surplus"?
A) The total revenue from sales
B) The difference between what consumers are willing to pay and what they
actually pay
C) The cost of production
D) The economic profit of firms
RATIONALE: Consumer surplus measures the benefit consumers receive from
purchasing goods at lower prices.
QUESTION: 7:
What is a "substitute good"?
A) A good that complements another
B) A good that can replace another good in consumption
C) A good that is always necessary
D) A good with a fixed price
, • ECS2601 – Microeconomics Application (UNISA)
Exam Guide 2025/2026 | Complete Test Bank,
Notes & Past Papers with 200+ Verified Practice
Questions, Answers, and Detailed Rationales |
Comprehensive Study Resource for UNISA
Economics, Business, and BCom Students
RATIONALE: Understanding substitute goods is essential for predicting changes in
demand when prices fluctuate.
, • ECS2601 – Microeconomics Application (UNISA)
Exam Guide 2025/2026 | Complete Test Bank,
Notes & Past Papers with 200+ Verified Practice
Questions, Answers, and Detailed Rationales |
Comprehensive Study Resource for UNISA
Economics, Business, and BCom Students
QUESTION: 8:
What does "marginal cost" refer to?
A) The total cost of production
B) The cost of producing one additional unit of a good or service
C) The average cost of production
D) The fixed costs of production
RATIONALE: Marginal cost helps firms decide how much to produce to maximize profit.
QUESTION: G:
What is "demand shift"?
A) A change in supply
B) A change in demand due to factors other than price, such as consumer
preferences or income
C) A change in market equilibrium
D) A change in production costs
RATIONALE: Understanding demand shifts is critical for analyzing market dynamics
beyond price changes.
QUESTION: 10:
What is "market failure"?
A) A situation where markets operate efficiently
B) A situation where the allocation of goods and services is not efficient, leading to
a loss of economic welfare
C) A decrease in demand
D) An increase in competition
RATIONALE: Market failure highlights the need for government intervention in certain
circumstances to enhance welfare.
QUESTION: 11:
What does "price ceiling" refer to?
A) A maximum allowable price set by the government
B) A minimum allowable price set by the government
C) The market price determined by supply and demand
Exam Guide 2025/2026 | Complete Test Bank,
Notes & Past Papers with 200+ Verified Practice
Questions, Answers, and Detailed Rationales |
Comprehensive Study Resource for UNISA
Economics, Business, and BCom Students
QUESTION: 1:
What is the definition of microeconomics?
A) The study of national economic systems
B) The branch of economics that focuses on individual consumers and firms and
their decision-making processes
C) The analysis of international trade
D) The study of government policies
RATIONALE: Microeconomics is essential for understanding how individual choices
impact supply and demand in markets.
QUESTION: 2:
What does the law of demand state?
A) Demand increases as price increases
B) There is an inverse relationship between price and quantity demanded
C) Supply increases as demand increases
D) Demand remains constant regardless of price changes
RATIONALE: The law of demand illustrates how consumers respond to price
changes, a fundamental concept in microeconomics.
QUESTION: 3:
What is meant by "price elasticity of demand"?
A) The responsiveness of supply to price changes
B) The measure of how much the quantity demanded of a good responds to a
change in its price
C) The fixed demand for essential goods
D) The relationship between price and income
RATIONALE: Price elasticity of demand is crucial for businesses to set prices and
forecast revenues effectively.
QUESTION: 4:
What is a "normal good"?
, • ECS2601 – Microeconomics Application (UNISA)
Exam Guide 2025/2026 | Complete Test Bank,
Notes & Past Papers with 200+ Verified Practice
Questions, Answers, and Detailed Rationales |
Comprehensive Study Resource for UNISA
Economics, Business, and BCom Students
A) A good with no substitutes
B) A good for which demand increases as consumer income rises
C) A good that is always necessary
D) A good with a fixed price
RATIONALE: Understanding normal goods helps in analyzing consumer behavior
regarding income changes.
QUESTION: 5:
What does "market equilibrium" refer to?
A) The point where supply exceeds demand
B) The situation where quantity supplied equals quantity demanded, resulting in
stable prices
C) The point of maximum profit for firms
D) The point where demand outstrips supply
RATIONALE: Market equilibrium is fundamental for understanding how prices stabilize
in a competitive market.
QUESTION: 6:
What is "consumer surplus"?
A) The total revenue from sales
B) The difference between what consumers are willing to pay and what they
actually pay
C) The cost of production
D) The economic profit of firms
RATIONALE: Consumer surplus measures the benefit consumers receive from
purchasing goods at lower prices.
QUESTION: 7:
What is a "substitute good"?
A) A good that complements another
B) A good that can replace another good in consumption
C) A good that is always necessary
D) A good with a fixed price
, • ECS2601 – Microeconomics Application (UNISA)
Exam Guide 2025/2026 | Complete Test Bank,
Notes & Past Papers with 200+ Verified Practice
Questions, Answers, and Detailed Rationales |
Comprehensive Study Resource for UNISA
Economics, Business, and BCom Students
RATIONALE: Understanding substitute goods is essential for predicting changes in
demand when prices fluctuate.
, • ECS2601 – Microeconomics Application (UNISA)
Exam Guide 2025/2026 | Complete Test Bank,
Notes & Past Papers with 200+ Verified Practice
Questions, Answers, and Detailed Rationales |
Comprehensive Study Resource for UNISA
Economics, Business, and BCom Students
QUESTION: 8:
What does "marginal cost" refer to?
A) The total cost of production
B) The cost of producing one additional unit of a good or service
C) The average cost of production
D) The fixed costs of production
RATIONALE: Marginal cost helps firms decide how much to produce to maximize profit.
QUESTION: G:
What is "demand shift"?
A) A change in supply
B) A change in demand due to factors other than price, such as consumer
preferences or income
C) A change in market equilibrium
D) A change in production costs
RATIONALE: Understanding demand shifts is critical for analyzing market dynamics
beyond price changes.
QUESTION: 10:
What is "market failure"?
A) A situation where markets operate efficiently
B) A situation where the allocation of goods and services is not efficient, leading to
a loss of economic welfare
C) A decrease in demand
D) An increase in competition
RATIONALE: Market failure highlights the need for government intervention in certain
circumstances to enhance welfare.
QUESTION: 11:
What does "price ceiling" refer to?
A) A maximum allowable price set by the government
B) A minimum allowable price set by the government
C) The market price determined by supply and demand
