Question # 1

A contour line which slopes downward from left to right and yield equal level of satisfaction to consumer with the given income is.

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Negatively slop curve

An indifference curve

Positively sloped Curve

None of the above

When cross elasticity of demand for A and B is positive number, one can conclude that

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the goods are cheaper

the goods are inferior

the goods are substitutes

the goods are complements

To say that two goods are unrelated, their cross price elasticity of demand should be

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less than 0

greater than 0

equal to 0

1

Choose the correct establish condition for equilibrium

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MR = MC

MC intersects MR curve from below

MC + MR

Both a and b

General price level and real income of the people are correlated with each other

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Negatively

Positovely

Normally

Sub normally

When the demand of a product rises due to factors except price it will be.

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Extension of demands

Rise of demand

Contraction of demand

Extension of demand

The demand for a product is inelastic. In order to increase government revenue, the finance minister will :

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Lower down the tax rate

Increase the tax rate

Not change the tax rate

Double the tax rate

Which is NOT a cause of slow capital formation in Pakistan

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poverty

illiteracy

bad governance

low rate of taxes

Normal profit is attained where:

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TR = TC

TR >TC

AR > MR

AR < MR

If price elasticity of demand is very low, the commodity is

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necessity

luxury

substitute

not available

Economic laws can be define as .

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A statement of social behaviour

Laws implement by an executive

Laws of the state

Statement of general economic tendencies

Perfectly inelastic supply curve is:

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Parallel to vertical axis

Parallel to horizontal axis

Rises upward to the right

Falls downward to the right

TC

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starts from origin

not from origin

is parallel to y-axis

parallel to x- axis

A product which has value price in the market has.

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Utility

Scarcity

Transferability

All the three

Elasticity of demand in case of minor change in price and quantity demand will be .

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Income elasticity of demand

Cross elasticity of demand

Point elasticity of demand

Arc elasticity of demand

Market equilibrium means

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number of buyers and sellers are equal

demand and supply of commodity are equal

no price is changing

prices rise very slowly

Normal price is a price which prevails

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In day to day market

In domestic market

In the long run market

In a foreign market

Trade Unions in Pakistan are unable to get an increase in wage rates because of :

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Minimum wage law

Low labour efficiency

Capital intensive projects

Lack of Natural resources

If a change in demand is brought by a change in income, of demand will be.

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Income elasticity

Price elasticity

Cross elasticity

Arcelasticity

In the business world

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a firm working under perfect competition wants to become a monopoly

a firm working under monopoly wants to become a competitive firm

monopoly price is always higher than competitive price

competitive price is always higher than monopoly price

The elasticity of demand of durable goods is

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less than unity

greater than unity

equal to unity

zero

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