Question # 1

The quantity of Y demanded increases by 6% when income changes, and income elasticity of demand is -0.9 income

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Decreased by 5.4 %

Decreases by 8%

Increased by 15%

Decreased by 6.7 %

If Supply and demand both decrease simultaneously. Which of the following will happen.

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Price will rise

Quantity sold will rise

Price will fall

Quantity sold will decrease

A monopolist will discontinue production if

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Marginal revenue is less than marginal cost

Marginal revenue is less than average total cost

Marginal revenue is less the average fixed cost

Price is less than average variable cost

Duopoly is a market situation when there is

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Single seller

Many seller

Two seller

Few seller

In substitution effect a consumer

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Shifts away from the commodity which price has risen

shifts in favor of commodity which price has risen

shifts away from the commodity which price has fallen

None of these

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

The epigram "time is money" expresses , in part, the concept of.

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Opportunity cost

Comparative advantage

Specialization

Efficiency in production

In order to constitute an oligopolistic market structure.

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There must be a few firms in a given relevant market

There must be a few firms selling in a national market

There must be more than 20 firms selling in the international market

There must be fewer than 15 firm is any given market

Cardinal approach theory was presented by

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Marshall

Adam smith

Robbins

Hicks

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

In monopolistic competition firm sell

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Same goods

Differential goods

Inferior goods

Superior goods

A firm charges Rs. 800 for its unique word processor. If total revenue is Rs. 56,000 in July, how many word processor were sold that month.

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70

95

700

800

In long run equilibrium a monopolistically competitive firm will find.

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Marginal cost below average total cost

Marginal cost wqual to minimum average total cost

Both a and b

Neither a nor b

At level of income and output of 100 in the diagram above

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APC < 1

Equilibrium occurs

Consumption expenditures are equal to 100

MPC > APC

The same graph shows that the firm order to maximize profits , should produce.

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30 units charges a price of Rs. 16

20 Units and charge a price of Rs. 22

35 Units and charge a price of Rs. 12

38 units and charge a price or Rs. 10

Which of the following does not represent a barrier to entry into a market.

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Import quotas

patent laws

Government franchleses

Anti trust legislation

A monolithically competitive market is characterized by all of the following except.

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Easy entry

Differentiated product

Excess capacity

Economic profit in the long run

According to Keynes, when the great depression started the government should be.

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Done nothing

Decreased the money supply

Had a large increase in government spending.

Enacted high tariffs such as the smoot Hawley tariff

Law of variable proportion sis applicable in.

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Short run

Long run

Anytime

Fore ever

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

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