Question # 1

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 monopoly the firm can

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Price

Output

Either price or output

Both a and b

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

Disposable income is equal to.

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National income

National income minus taxes plus transfers

Real GDP

National income Minus taxes

Price discrimination is possible

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Oligopoly

Duopoly

Perfect competition

Monopoly

in monopolistic competition the firms desire to sell more output at the equilibrium because.

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Price is more than marginal cost

Price is less than marginal cost

Price is less than average cost

Price more than average cost

The Isoquant curve shows different combinations of two factors of production which give the producer.

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Different level of output

High level of output

low level of output

Same level of output

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

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

Indifference curve theory is old wine in new labeled bottle is said by.

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Marshall

Griffin

Ricardo

Allen

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

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

The total utility of the third unit of product x is.

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10

5

23

38

In a typical cartel agreement the cartel maximizes profit when it.

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Behaves like a monopoly

Behaves like a perfectly competitive firm

Behaves like a duopoly

Is flexible in enforcing production targets

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 average fixed cost is 40 and average variable cost is 80 for a given output we the know that average total cost is.

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40

¹²⁰

80

None of the above

If a person's MPC is always two thirds and that person's break even point is Rs. 6,000, at a disposable income of Rs.9,000 the person's consumption expenditures will be.

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Rs. 8,000

Rs. 5,000

Rs.6,000

Rs.7500

An entrepreneur who collects profits in the short run for a new invention is collecting.

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The competitive rate of return on capital

Temporary monopoly profit

Rent

A Ramsey surplus

If a firm triples all inputs and output triples as well the firm is subject to

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Constant returns to scale

Increasing returns to scale

Economies of scale

Both b and c

The fundamental reason people must choose which goods to buy and consume is because of.

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Scarcity

Specialization

People engaging in exchange

The fact there are many different economic agents

BATA's marginal utility per dollars is .8 for both shorts and running shoes,. To attain her consumer equilibrium BATA should.

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Buy an additional pair of shorts

Buy an additional pair of both items

Possibly not make any adjustment in her behavior

Sell her shorts and keep her shoes

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