Question # 1

The law of diminishing returns states that as more of a variable factor is added to a certain amount of a fixed factor beyond some point.

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Total Physical product begins to fall

The marginal physical product rises

The marginal physical product falls

The average physical product falls.

Supply is likely to be more price elastic.

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In the short run rather than the long run

If factors of production are relatively immobile between industries.

If there are very few producers

If it is easy to expand output

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

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Interaction

Conglomerate

Collusion

Integration

In the long run in perfect competition

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Price = average= cost = marginal cost

Price = average cost = total cost

The price covers fixed cost

total revenue = total variable cost

According to schumpater

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Monopolies are inefficient

Monopoly profits act as an incentive for innovation

Monopolies are allocatively efficient

Monopolies are productively efficient

The law of diminishing returns assumes.

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There are not fixed factors of production

There are no variable factors of production

Utility is maximized when marginal product falls.

Some factors of production are fixed

If firm earn normal profits.

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They will aim to leave the industry

Other firms will join the industry

The revenue equals total costs

No profit is made in accounting terms

In the long run in perfect competitiion

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the price equals the total revenue

Firm are allocatively inefficient

Firms are productively efficient

the price equals total cost

In monopoly when abnormal profits are made.

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The prize set is greater than the marginal cost

The price is less than the average cost

The average revenue equals the marginal cost

Revenue wquals total cost

Which of the following would decrease aggregate demand.

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Increased consumption

Increasing export revenue

Increased taxation revenue

Increased investment

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

Which of the following is true.

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If the marginal cost is greater than the average cost the average cost fallls.

If the marginal cost is greater than the average cost the average cost increases.

If the marginal cost is positive total costs are maximized

If the marginal cost is negatives total costs increase at a decreasing rate if output increases

If people are made unemployed because of a fall in aggregate demand this is known as.

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Frictional unemployment

Seasonal unemployment

Cyclical unemployment

Structural unemployment

A scarce good.

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Does not exist

Is a good that can only be purchased with money

Is a good that can never be purchased with money

Is a good that is available in limited quantities, but is desired in greater quantities.

Over time the price of primary products tends to fall because.

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Demand is income elastic

Supply is income elastic

Of outward shifts in supply

Demand is price elastic

When an economy first begins to frow more slowly.

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GDP increase

Inflation is likely to increase

Stock levels are likely to increse

Investment in equipment is likely to increase

In economics we ofthe say that a particular event will occur "as long as other things stay the same. " The conduction that other thing saty the same is also called.

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Ceteris paribus

Marginal decision making

Incentives

Secondary effects

In marketing "USP " Stand for

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Unique selling proposition

Underlying sales pitch

Unit sales point

Under sales procedure

Acquisition and merger are examples of.

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Internal growth

External growth

Organic growth

Underlying growth

An increase in aggregate demand will have most effect on prices if.

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Aggregate supply is price inelastic

Aggregate supply is price elastic

Aggregate supply has a unitary price elasticity

Aggregate demand is price inelastic

Exchange rates that are determined by the unregulated forces of supply and demand are.

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Floating exchange rates

Pegged exchange rates

Fixed exchange rate

Managed exchange rates

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