Question # 1

If a firm which polluted the water of area had to pay all social cost would have

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Small output

Large output

Heavy output

B and C

Suppose taht an exise tax is imposed on the monopolist's product if the monopolist's marginal cost is horizontally the relevant range, which of the following statements must be true.

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The price will increase by an amount less than the tax

The price will increase by an amount equal to the tax

The price will increase by a amount greater than tax

The price may either increase or decrease

Holding all other things constant a higher price for ski lift tickets would.

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Increase the number of skiers

Increase the price of skis

Decrease the number of skis sold

Decrease the demand for other winter recreational activities

The competitive firm maximizes its profit by operating where

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Average costs are at a minimum

Total revenue is at a maximum

Profit per unit is at a maximum

Marginal cost equals price

The law of diminishing marginal returns to a factor of production is.

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Not applicable

Another explanation of economies of scale

A principle of scales

None of these

A monopolist will maximize profit.

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Where total revenue is maximized

Where the slope of the total revenue function equals the slope of the total cost function

Where average cost is at a minimum

Where all the above are ture

If a price floor of Rs.15 is imposed, the governments cost is.

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Rs.150

Rs.300

Rs.750

Rs.450

When the marginal physical product of labor is 800 - 2N , the price of goods is Rs. 2, and the cost of labor is Rs. 4 per unit, the quantity of labor employed is.

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20 Units

800 Units

399 Units

80 units

A monopoly there is

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No difference between firm and industry

A few firms

Lot of firms

none of these

Which of the following concepts represents the extra revenue a firm neceives from the services of an additional unit of a factor of production.

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Total revenue

Marginal physical product

Marginal revenues product

Marginal revenue

Assume a cosumer buys 25 units of good X at Rs.8 and 10 units of good Y at Rs. 6 in 1980. If Px = Rs. 6 and Py = Rs. 4 in 1970 the pasasche index is.

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1.14

1.65

1.37

1.47

The largest source of tax revenue for the federal government is

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The prerenal income tax

The social security tax

the property tax

The sales tax

The short run supply curve for a competitive industry is derived by.

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Horizontally summing the marginal cost curves for each firm in the industry

Horizontally summing the average variable cost curves for each firming the industry

Vertically summing the marginal cost curves for each firm in the industry

None of the above

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

In perfect competition, a seller by increasing price.

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Sell more

Produce its revenue

Decrease cost

Sell nothing

Extension and contraction of demand mean

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Movement on the same demand curve

Movement to high demand curve

Movement to lower demand curve

Movement to another demand curve

A price decrease and an increase in income are similar in that

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Both force the consumer to achieve a lower level of well being

Both force the consumer to reach a lower indifference curve

Both move the budget line outward

^{They are not similar at all}

In monopoly the firm can

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Price

Output

Either price or output

Both a and b

In the neighborhood of the long run equilibrium of a monopolistically competitive firm average cost will be.

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Decreasing

Constant

Increasing

At a minimum

If average variable cos tis less then marginal cost then certainly.

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Per unit total cost is rising

Per unit total cost is constant

Per unit total cost is falling

Per unit variable cost is rising

When economists say that a per son is economizing they mean that the person is.

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making choices to gain benefits at lowest possible cost

Making a lot of money

Purchasing goods that are generic cheap or of low quality

Learning how to run a business more effecitively

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