Question # 1

The firms average variable cost of the 150th unit is.

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Rs.15

Rs.17

Rs.20

Rs.9

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

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

A monopolist will discontinue production if

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Marginal revenue is less than marginal cost

Marginal revenue is less than average total cost

Marginal revenue is less the average fixed cost

Price is less than average variable cost

Which of the following shifts the demand curve for hot dogs leftward.

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An increase in the price of a hot dog bun

A decreases in the price of a hot dog bun

An increased in the price of a hamburger

An increases in the price of a hot dog

When the demand curve is vertical its shows that the demand is.

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Less elastic

Very high elastic

Elastic

Perfectly inelastic

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

The Marginal cost of product W exhibiting positive externalities is McW = 25 + 5 Qs, the competitive price for each unit of W (Pw) is Rs. 175 and the positive externality is worth Rs. 100 to society for each unit produced. Society considers product W under produced by how many units.

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10 Units

15 Units

20 Units

5 units

If a monopoly is unable to cover its short run variable costs, if should.

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Shut down

Raise price

Lower price

Increase output

Which of the following is a characteristic of monopolistic competition.

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One seller serving the entire market

When each firm sells an identical product

When firms do not compete on a product quality price and marketing

When firms are free is enter and exit the market

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

Because a monopoly hires workers up to the point where their marginal revenue product equals the wage rate the monopoly will.

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Pay less than the going wage rate

Pay a wage equal to the value of the marginal product of labor

Pay less than the value of the marginal product of labor

Pay workers what they are worth to society

In perfect competition the industry will be in equilibrium.

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when all the firms earning abnormal profit

When all the firms earning normal profit

All firms having loss

All firms having proft

In perfect competition a firm is.

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Price taker

Price setter

Independent

Dependent

The same graph shows that the firm order to maximize profits , should produce.

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30 units charges a price of Rs. 16

20 Units and charge a price of Rs. 22

35 Units and charge a price of Rs. 12

38 units and charge a price or Rs. 10

Micro economics is the study of.

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Economy on the whole

Large units of the economy

Individual units of the economy

General economics

Projects A,B,C,D,E cost Rs. 100, Rs, 200, Rs. 300, Rs. 400, and Rs. 500 with MEC's of 0.07, 0.06,0.09 ,0.10 and 0.11 respectively. The market rate of interest is 8% Total investment spending is

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Rs. 1500

Rs.1300

Rs.1200

Rs.300

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

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Opportunity cost

Comparative advantage

Specialization

Efficiency in production

A drop in the price of compact disc shifts the demand curve for prerecord tapes leftward from that you know that compact discs and precorded tapes are.

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Inferior goods

Substitutes

Complements

Normal goods

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

A demand curve shows that relation between price and demand.

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Positive

Negative

Zero

Very strong

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