Question # 1

This is an assumption of law of demand

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price of the commodity does not change

quantity should not change

supply should not change

income of consumer should not change

The elasticity f demand in case of substitute is called.

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Income elasticity of demand

Priceelasticity of demand

Crosselasticity of demand

None of the three

One of the following is fixed capital.

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Raw material

Defence saving certificate

Machinery

None f the three

In the long-run a competitive firms attains only:

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Normal profit

Super Normal profit

Sub-Normal profit

Marginal cost

If demand is unitary elastic, a 25% increase in price will result in

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25% change in total revenue

no change in quantity demanded

1% decrease in quantity demanded

25% decrease in quantity demanded

All labour is

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homogeneous

heterogeneous

lazy

intelligent

The transformation of resources into economic goods and services is called

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technical efficiency

input

production

increasing returns

Father of the political economy

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Adam smith

Malthus

Marshall

Samuelson

With a fall in the price of a Giffen good or inferior good its quantity demand will.

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Fall

Rise

Remain unchanged

None of three

One of the following will not cause a rise and fall on demand.

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Change in income

Change in weather

Discovery of a substitute

Distribution of income remaining the same

A person who contributes funds in partnership but does not take active part in management of business is called

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sleeping partner

helping partner

temporary partner

inactive partner

With an increase in cost of production, price of the product rises while supply of the product will.

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Fall

Rise

Remain unchanged

Non of the three

When average product (AP) and marginal product (MP) are rising.

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AP > MP

AP = MP

AP < MP

AP = MP = 0

A firm decides to exit the industry when

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AC starts rising

MC starts rising

price is less than LAC

TC starts rising

The demand curve is negatively sloped due to

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Income effect

Substitution effect

Price effect

All the three

Standard of living of workers depends upon their

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nominal wages

real wages

average product

govt. policy

When the price of a product increase by 100 percent and as a consequence, its quantity supplied increase by 125 percent, Its elasticity of supply will be.

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Less than unity

Greater than unity

Equal to unity

Equal to zero

All inputs can be varied in

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short run

long run

both periods

non of the period

Given the supply curve, a fall in demand will.

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Increase equilibrium quantity of the product

Decrease equilibrium quantity of the product

Not affect equilibrium quantity

Not affect equilibrium price

An example of natural resource is

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factory

skilled doctor

oil reserves in the ground

oil reserves in storage tank

Rotten eggs are

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free good

economic good

service

wealth

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