Eco Trial

• What is utility in economics?

  Utility is the measure of satisfaction derived from the consumption of goods and services.
• What happens when total utility (TU) falls below zero?

  Consumers become dissatisfied.
• What does Marginal Revenue Product (MRP) refer to?


  MRP is the increase in revenue earned from an increase in one unit of a factor of production (FOP).
• What is the relationship expressed by the equation MRP = Wages?

  It indicates that the marginal revenue product of labor is equal to the wages paid to labor.
• What is a key assumption of indifference curves?


  Indifference curves cannot intersect.
• What does it mean when a point is tangent to an indifference curve?

  It indicates the optimal consumption bundle where the consumer maximizes utility.
• What is a demand function?

  A demand function describes the relationship between demand and price.
• What is ecotourism?


  Ecotourism is the uniting of conservation, communities, and sustainable travel.
• What is an example of an ecotourism practice?


  Using local resources to build houses.
• What is planned investment?

  Planned investment is spending by firms to acquire capital goods and inventories.
• How is the marginal propensity to consume (MPC) calculated?

  MPC is calculated as $MPC =$$\frac{\Delta C}{\Delta Y}$.
• What is the formula for the multiplier effect?

  The multiplier is calculated as $Multiplier =$$\frac{1}{1-MPC}$.
• What are demand deposits?


  Demand deposits are customers' money held by banks.
• What does the supply of labor refer to?

  The supply of labor refers to the number of workers that are willing to work.
• What is the income effect in labor supply?

  The income effect refers to replacing work hours for leisure.
• What is the substitution effect in labor supply?

  The substitution effect refers to replacing leisure time for work hours.
• What does the foreign exchange market supply and demand for?

  The foreign exchange market supplies and demands for currency.
• What does depreciation of the exchange rate mean?


  It refers to a fall in the value of a country's currency compared to other currencies.
• What does the production function express?

  The production function expresses the relationship between quantities of productive factors used and the amount of product obtained.
• What is the law of diminishing returns in production?

  It states that as more layers are hired, there is a rise followed by a decrease in returns of outputs.
• What is an example of sustainable tourism in Fiji?

  Kula Bird Park is an example of sustainable tourism in Fiji.
• What are the challenges faced when promoting eco-tourism?

  • More financing is needed
  • Policies to better keep wildlife must be established
• What is consumer equilibrium?

  Consumer equilibrium is the optimal purchase rule where equi-marginal utility is achieved.
• How can the size of the credit multiplier be reduced?

  By holding a higher proportion of eligible liabilities in the form of deposits.
• What is the minimum wage rate?


  The minimum wage rate is the lowest legal wage rate.
• What is the nominal exchange rate?

  The nominal exchange rate is the number of units of the domestic currency that can purchase a unit of given foreign currency.
• What are foreign reserves?

  Foreign reserves are reserves held by banks in foreign currencies.
• What is the significance of maintaining an adequate level of foreign reserves?

  • To pay for import bills
  • To settle loans for the government