Question # 1

In perfect competition a firm is.

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Price taker

Price setter

Independent

Dependent

change in quantity demanded

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Downward shift of demand curve

Movement on the same demand curve

Downward shift

None of these

A monopolistically competitive firm differs from a perfectly competitive firming that unlike the perfectly competitive firm it.

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Faces a downward sloping demand curve

Can change the characteristics of its product.

Can vary the price of its product.

All of the above

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

Cross -elasticity following commodities is very high

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Compliments

Normal

Goods substitutes

Good compliments

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

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

Indifference curve has following characteristics except.

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Convex to origin

Intersect each other

Not necessary to be parallel

None of these

In the long run a profit maximizing monopoly produces an output volume that

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Equates long run marginal cost with marginal revenue

Equates long run average revenue

Assures permanent positive profit

Is correctly described by both a and c

The monopolization of the competitive market results in a deadweight loss to society of

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RSJK

JKL

THJ

RSJL

As long as the principle of diminishing marginal utility is operating any increased consumption of good.

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Lowers total utility

Produces negative total utility

Lower marginal utility and therefore total utility

Lowers marginal utility, but may raise total utility.

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.

If X , Y, and Z are willing to work for Rs. 4, Rs, 5, and Rs.6 respectively but N pays them Rs. 7 each, producers surplus is.

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Rs. 4

Rs.7

Rs.5

Rs.6

Firm A's annual profit is.

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Rs.10,000

Rs.20,000

Rs.30,000

Rs.60,000

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

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.

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

"The quantity demanded increases as its price increases and falls as its price falls" is called given goods, is presented by.

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Allen

Marshall

Adam smith

Robert griffin

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 downward kinked demand curve facing the individual oligopolistic implies that

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He face price certainlty

Competitors have a tendency to follow price decreases but not price increase

Total revenue remains same if a firm increases price

None of these

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}

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