Question # 1

Under perfect competition, the price system automatically result in efficient output selection when

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MC = MR

MC = MU

P = ATC

P > AVC

An exceptional demand curve is.

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Vertical

Horizontal

Downward sloping

Positive slope

If an increase in the price of gasoline increases the demand for gas hybrid cars, then

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Hybrid cars are an inferior good

Gasoline and hybrid cars are complements in consumption

Gasoline is an inferior good

Gasoline and hybrid cars are substitutes in consumption

A linear homogenous production function would reveal.

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Constant returns to scale

Increasing returns to scale

Decreasing return to scale

Doubling all inputs would more than double output

The price elasticity of demand will increase with the length of the period to which the demand curve pertains because.

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Consumers incomes will increase

The demand curve will shift toward

All prices will increase over time

Consumers will be better able to find substitutes

Along the long run supply curve all of the following can vary except.

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The level of profits

The number of firms in the industry

Input prices

The level of input usage

The marginal rate of substitution of two goods can be obtain from

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Slope of budget line

Slope of demand curve

Slope of indifference curve

None of these

BATA's marginal utility per dollars is .8 for both shorts and running shoes,. To attain her consumer equilibrium BATA should.

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Buy an additional pair of shorts

Buy an additional pair of both items

Possibly not make any adjustment in her behavior

Sell her shorts and keep her shoes

An oligopolistic industry can be characterized by all of the following except

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May sellers

mutual interdependence

Economies of scale

A homogenous product

When goods are compliments the cross demand curve

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Upward to the right

Backward to bottom

Inwards to the right

Downwards to right

A production function for a firm which produces a product with two or more inputs.

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Represents a physical relationship between outputs for a specified set of inputs

Indicates the least cost combinations of inputs for a given output

Relates revenues and costs

Indicates the dollar cost for each level of ouput.

Marginal cost is the change is cost the result from a one unit increase in.

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Price

Cost

Output

Revenue

Duopoly is a market situation when there is

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Single seller

Many seller

Two seller

Few seller

In capitalistic economy price is determined by

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Supply and production

Demand and production

Demand and consumption

Demand and supply

If a tax of Rs. 6 per units is imposed upon the suppliers, then.

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Tax revenue will equal Rs. 108

Price increases by Rs. 4

Quantity decreases by 4 units

Producers pay Rs. 36

The exit of firms out of a competitive market causes the supply curve to.

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Shift leftward

shift rights ward

None of the above for the exit of firms supply curve

shift either left or right depending on the number of firms leaving the market

In perfect competition a firm is.

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Price taker

Price setter

Independent

Dependent

Ti access internet services consumers must use a computer if computer prices fall, what is the effect on the demand for internet services.

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The demand for internet services increases.

The demand for internet services decreases

The demand for internet services does not change

The demand for internet services could increase, decrese, or stay the same depending on other factors.

An -increase the expected future price of a good.

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Increases its demand

Decreases its demand

Increases its supply

Has no effect on either its demand or its supply.

What is the per unit marginal cost of increasing production from 20 to 25 units.

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Rs. 3,500

Rs.100

Rs.4,000

Rs.500

When the price of a pizza decreased from 1200 Rupees to 1000 Rupees, it is definitely the case that the.

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Income effect means people buy less pizza

Substitution effect means people buy more pizza

Quantity demanded of pizza will not change

None of the above

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