Question # 1

When price elasticity of demand for normal goods in calculated, the value is always

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positive

negative

constant

greater than one

One of the following is not an assumption of the Ricardian theory of rent.

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Lands are cultivated in sequence

All lands are homogeneous

All units of labour are identical

There are original and industuctible powers of soils

Which is NOTtrue

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perfect monopoly does not exist in real world

perfect competition does not exist in real world

every monopoly is evil

every firm wants to reduce competition

Marginal revenue is always less than price at all levels of output in

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perfect competition

monopoly

both A and B

none of the above

A monopolist is always interested and obtains.

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Normal profit

Subnormal profit

Continues production even at loss

Super normal profit

A market competition from in which there are very large number of firms producing a homogeneous commodity are called

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Perfect competition

Equilibrium of firm

Under perfect competition

None of these

Short run means is a period

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less than one year

in which at least one input is fixed

in which no input can be changed

in which firms can easily enter or exit

Which of the following is example of external economies of scale?

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Discount on purchases of raw materials

Technical progress leads to development of machines at low price

Hiring of specialized staff due to increase in scale of production

A firm starts producing by products

Long rum is a period

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three years or longer

long enough to allow firms to change plant size and capacity

in which a firm need not get loans

which affects larger more than smaller firms

Law of demand shows relation between

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income and price of commodity

price and quantity of a commodity

income and quantity demanded

quantity demanded and quantity supplied

Price of a product is determined in a free market

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by demand for the product

by supply of the product

by both demand and supply

by the government

A firms reaches its shut down point where:

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AC > AR

AC = AR

AC< AR

AVC = AR

How many condition of equilibrium of firm

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2

3

4

5

The cost which a firm incurs for purchasing or hiring factors is called

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implicit

explicit

real

basic

Extension of supply will take place as a consequence of:

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Change in price

Change in population

Change in technology

Change in money supply

If Bali burgers find that their MC of burgers is less than MR they would try to

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expand business

reduce business

continue as before

close business

If we plot the equation y = 20 +3x, its slope is

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20

3

20/3

Indeterminate

Supply curve

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is vertical in long run

is flatter in long run

is same in long and short run

is horizontal in both short and long run

A fall fall in supply will take place due to a:

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Business collusion

Bumper crop

Fall in custom duty

Fall in income

Utility and usefulness are

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equal

different

opposite

unrelated

Law of substitution is another name for

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law of diminishing MU

law of equi-MU

law of demand

law of satisfaction

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