Question # 1

Which of the following is necessary for a natural monopoly.

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Economies of scale

A high proportion of the total cost is the cost of capital goods

The market is very small

All of the above

Which of the following best defines price discrimination.

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Charging different prices on the basis of race

Charging different prices for goods with different costs of production

Charging different prices based on cost of service differences.

Selling a certain product of given quality and cost per unit at different prices to different buyers

What does the phrases "there is no such thing as a free lunch'mean"

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Individuals must always pay money for the food the eat.

No restaurant wner will provide food to patrons unless they pay her

Restaurant owners act selfishly

Consumption of any good requires that other goods be given up

If firms join together to set prices and quantities this is known as what.

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Interaction

Conglomerate

Collusion

Integration

Barriers to entry do not include

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Patents

Internal economics of scale

Mobility of resources

High investment costs

Which of the following is a determinant of consumption.

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Expectations about future prices

Level of indebtedness of consumers

The price level

All of the above

Which of the following is an injection into the economy.

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Investment

Saving

Taxation

Import spending

All currencies other than the domestic currency of a given country are referred to as.

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Reserve currencies

Neal monies

Foreign exchange

Hard currency

Improved training of employees would.

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Shift aggregate supply to the right

Shift aggregate supply to the left

Shift aggregate demand to the right

Shift aggregate demand to the left

As income increases.

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the average propensity to consume gets nearer in value to the marginal propensity to consume

the average propensity to consume diverges in value from the marginal propensity to consume

the average propensity to consume falls

The averge propensity to consume always approaches 0

Globalization is made more difficult by

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The actions of the World Trade Organization

The removal of protectionist measures

Exchange rate instability

More free trade agreements

In a less developed country.

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The infrastructure is likely to be good.

Real wages are likely to be high

Unemployment is likely to be low

The primary sector is likely to be significant

For perfectly competitive firm

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Price equals marginal revenue

Price is greater than marginal revenus

Price equal total revenue

Price equals total cost

The accelerator theory of investment says that induced investments determined by.

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The rate of change of national income

Expectations

The level of national income

The level of aggregate demand

Profit making is basic motive in.

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Socialism

Mixed economy

Communism

^Capitalism

In pure monopoly what is the relation between the price and teh marginal revenue.

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The price is greater than the marginal revenue

The price is les than the marginal revenue

There is no relation

They are equal

Earning from primary products are often unstable because.

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Demand is price elastic

Supply is price elastic

Supply conditions are relatively stable

Supply conditions are unstable

There are three fundamental questions every society must answer Which of the following is one of these questions.

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What goods and services are to be produced.

How are the good and services to be produced.

Who will get the goods and services what are produced.

All of the above

The sacrifice involved when you choose a particular course of action is called the

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Alterative

Opportunity cost

Consumer cost

Producer cost

Economic growth can be measured by

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The CPI

The CBI

GDP

MPC

In monopoly in long run equilibrium.

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The firm is productively effieient

The firm is allocatively inefficient

The firm produces where marginal cost is less than marginal revenue

The firm produces at the sociality optimal level

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