Question # 1

In perfect competition the transpiration cost

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Excluded from the total cost

Is important figure in total cost

Is ignored

All of these

In monopoly there is.

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Single seller

Single buyer

Two producers

Few seller

When goods are compliments the cross demand curve

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Upward to the right

Backward to bottom

Inwards to the right

Downwards to right

Naveed purchases product M for which his income elasticity of demand is negative Apparently product M is.

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A necessity

An independent good

An inferior good

A luxury good

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

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

Which of the following is an automatic stabilizer.

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Unemployment benefits

Spending on education

Defense spending

Net interest

In the long run a profit maximizing firm will choose to exit a market when

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Fixed costs exceed total costs

Total revenue from production is less than total costs

Average fixed cost is rising.

Marginal cost exceeds marginal revenue at the current level of production.

If there are 50 firms in a industry each selling 2% of the total sales the concentration ratio is.

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50%

2%

8%

100%

Which of the following groups is most hurt by unexpected inflation.

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Workers with cost of living adjustments in their labor contracts

Home owners

People with large debts to pay for their homes and cars

People with large retirement savings held in savings accounts.

Which of the following explains why demand curves slope downward.

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Prices and income

substitutes and complements

Resources and technology

Substitution effect and income effect

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

Firms entering a perfectly competitive market will cause the price of the product to

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Decrease

Increase

Remain constant

Respond more to consumer demand than supply

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.

MC = MR= AR=AC = Price shows the longs run

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Monopolist firm

Oligopolistic firm

Competitive firm

Both a and b

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

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

The key feature of oligopoly is.

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Excess capacity

High profitability

Product differentiation

Interdependence of firms

A demand curve is not related to

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The time period

The price of the commodity

The price of substitution

Any of above

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

In monopsony there is

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Single seller

Two buyers

Single buyer

Few buyer

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