Question # 1

A firm A's break even quantity is.

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10 units

40 units

50 units

30 units

Which of the following would cause the demand curve for an input to shift.

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A change in technology

A change in demand for the product being produced

An increase in the number of firms in the industry

All of the above

The ABC corporation.

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Is earning a pure economic profit

Should produce zero units of output

Is sustaining an economic loss

Is breaking even

The price elasticity of demand is teh same thing as the negative of the

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Slope

Reciprocal of slope

The first derivative of the demand function

Reciprocal of slope times the ratio of price to quantity

change in quantity demanded

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Downward shift of demand curve

Movement on the same demand curve

Downward shift

None of these

The firm under monopolistic competition is likely to produce less and set a higher price than under perfect competition because.

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The firm faces decreasing returns to scale

The firm faces increasing costs

The firm must incur selling expenses including advertising.

The firm faces a downward sloping demand curve

Which of the following statements abut the relationship between marginal cost and average cost is correct.

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When MC is falling AC is falling

AC equals MC and MC'S lowest point

When MC exceeds Ac, Ac must be rising

When Ac exceed MC, MC must be rising

The price of Ketchup at a market increases by 12.5% per can, which results in a decrease in quantity purchased by 40% per week, the demand is.

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Relatively elastic

Relatively inelastic

Perfectly elastic

Perfectly iinelastic

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

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

Which of the following will not be a determinant of the price elasticity of demand for a commodity.

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The absence of substitute for the good.

The presence of substitutes for the good.

The importance of the commodity in consumers budgets

The cost of producing the commodity

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

Given the cost data indicated in the table above the average variable cost of producing 7 units of output is

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Rs.37

Rs.29

Rs.31

Greater than Rs.37

In Production of goods and services tradeoffs exist becasue.

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Buyers and sellers often negotiate prices

Society has only a limited amount of productive resources

Not all production is efficient

Human wants and needs are limited at a particular point in time

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

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Opportunity cost

Comparative advantage

Specialization

Efficiency in production

Indifference curve has following characteristics except.

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Convex to origin

Intersect each other

Not necessary to be parallel

None of these

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

If the income elasticity of demand is +4

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The good is an inferior good

The good is an inelastic normal good

The good is an elastic normal good

the good is an elastic inferior good

A firm's long run average total cost lineis

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Identical to its long run marginal cost line

Also its long run supply curve

In fact the average total cost curve of the optimal plant

Tangent to all the curve of short run average total cost

Firm A's annual profit is.

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Rs.10,000

Rs.20,000

Rs.30,000

Rs.60,000

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.

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