Question # 1

A drop in the price of compact disc shifts the demand curve for prerecord tapes leftward from that you know that compact discs and precorded tapes are.

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Inferior goods

Substitutes

Complements

Normal goods

Given the above demand and supply equations for widgets, the equilibrium price and quantity is.

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P = Rs. 20, Q = 60

PO = Rs. 60, Q, = 20

P Rs. 35, Q = 45

P - Rs. 12, Q = 88

When a tax is levied on a good.

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The market price falls because demand declines.

The market price falls because supply falls.

A wedge is placed between the price buyers pay and the price sellers receive

The market price rises because demand falls.

A price cross elasticity of 0.81 between X and Y shows that.

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They are complementary goods

They are competitive substitutes

They are not substitutes

a reduction in the price of one would cause an increase in the consumption of the other.

If a monopoly is unable to cover its short run variable costs, if should.

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Shut down

Raise price

Lower price

Increase output

The average total cost of a wedge increases from Rs. 0.79 ro Rs. 0.83 Evidently

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AFC exceeds AVC

MC is between Rs. 0.79 and Rs. 0.83

AVC is Rs. 0.83

MC is greater than Rs. 0.83

A long-run total cost curve can be constructed from

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An income consumption curve

A price consumption curve

Isoquant is cost expansion path diagram

An Engel curve

The Lorenz curve shows that

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unemployment does not affect social group

People with low income spend more

People with low income spend less

the degree of income equality in the economy

"Treating an individual as typical of a group" in the definition of.

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Pure discrimination human capital

Statistical discrimination

Human capital

Specific skills

the ouput where diminishing return to production begin is also the ouput where

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Marginal cost is at a minimum.

Average total cost is at a minimum

Average variable cost is at a minimum

Marginal and average

If the price of an apple increases.

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Its opportunity cost decreases

Its opportunity cost increases

The substitution effect does not occur

The income effect does not occur

The arc elasticity formula is used to estimate elasticity when

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The product is thought to be inelastic

The product is thought to be elastic

The demand function is known

There are two observations of price and quantity

The method most commonly used to test the overall significance of a regression is.

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The t test

The F -test

Chi square test

R

In perfect competition price is settled by

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Sellers

Buyers

Producers

Both a and b

A negatively sloped isoquant implies

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Products with negative marginal utilities

Products with positive marginal utilities

Inputs with negative marginal products

Inputs with positive marginal products

Economists tend to disagree primarily about.

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The implications of scarcity for our economy

Which resources are free

Topics in positive economics

Issues of normative economics

A combination labour and capital where the cost of an output is minimized is called.

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Optimum factor combination

Good combination

Least combination

Substitutes combination

In perfect competition a firm is.

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Price taker

Price setter

Independent

Dependent

The marginal rate of substitution for two goods can be obtained from

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The slope of the demand curve

The slope of the indifference curve

The ration of first derivative of the total utility functions

B and D both

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 are price elasticity of demand is approximately

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0.3

3.3

6.0

0.2

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