Question # 1

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

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

If the government lower taxes by $10 billion, the Real GDP will rise by

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More than $10 billion

Less than $10 billion

Exactly $10 billion

None of these

If a monopolist's has only fixed costs and chooses that output at which marginal cost equals price. it will

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Earn positive economic profits

Earn zero economic profits

Incur a loss equal to its variable costs

Incur a loss equal to its fixed costs

if a consumer is purchasing only two commodities X and Y , and the marginal utility per dollar of Y is greater than the marginal utility per dollar of X to maximize total utility with the limited income the consumer should buy.

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.Less of both commodities

.More of both commodities

More of Y.

None of the above

If the demand curve for a good is downward sloping then the good must be.

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Normal

Inferior

Giffen

Either a or b

Which of the following correct about firms in an oligopoly.

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Each firm has complete control over its own selling price

All firms independently charge monopoly prices

No one firm controls price but each has an influence on the price

There is no competition in oligopoly industries

Everyone's absolute income doubles family A's APC, according to the simple Keynesian consumption function is expected to.

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Fall

Double

Increase

Halve

The "compensated" demand curve is the demand curve that.

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Shows only the income effect

Shows only the substitution effect

Shows both the income and substitution effects

Shows the Geffen good demand curve

The income elasticity of demand

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Is negative for normal goods

Is positive for normal goods

Equals the relative change in demand for a good divided by the relative change in the iincome of consumers all else being equal

Is correctly described by all of the above

In the short run, the supply of farm commodities is.

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Inelastic

Less elastic

More elastic

Undetermined

The demand for labor is the same as the

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Marginal revenue product

Marginal physical product

Marginal cost

Wage

Indifference curve is alwyas.

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Vertical

Horizontal

Concave

Convex

Goods which can be consume directly are

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Producer goods

Consumer goods

Free goods

Economics goods

As disposable income increases from Rs. 1500 to 2000 , saving increases from minus Rs. 50 to Rs.250 if the relationship between disposable income and saving is linear, the MPC obviously has a value of.

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.6

.8

.4

.2

Which of the following does not characterize monopolistic competition.

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Product differentiation

Many producers

Absence of advertising

Some control over price

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.

In monopolistic competition firm sell

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Same goods

Differential goods

Inferior goods

Superior goods

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

One of the difference between a perfectly competitive fir's long run equilibrium and the long run equilibrium of a monopolistically competitive firm is that

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LMS = MR under perfect competition but not under monopolistic competition

SAC = LAC under perfect competition but not under monopolistic competition

SMC = LMC under perfect competition but not under monopolistic competition

LAC = LMC under perfect competition, but not under monopolistic competition

When the quantity demanded is changed on the same price

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the demand curve shifts upward

The demand curve shifts downward

Movement on the same demand curve

None of these

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