Question # 1

When average cost increases, marginal cost is - - - - - - average cost

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Less than

More than

Equal to

None of three

Are included in welfare economist

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Ricardo and J.S. Mill

Robbins and Keynes

Cannon and Pigou

Malthus and Keynes

Law of decreasing return is immediately applied on

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Agriculture

Trade

Industry

Construction

If total expenditure of the consumer increases due to decrease in price, then nature of elasticity of demand will be

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Equal to unity

Less than unity

More than unity

Elasticity of demand = zero

Fixed cost consists of:

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Rent

Salaries

Interest

All of them

If demand for a commodity changes due to change in price of its substitute, it is called

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Price elasticity

Point elasticity

Cross elasticity

Arc elasticity

When no satisfaction is attained by the consumption of a commodity, its marginal utility is

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Zero

Positive

Negative

Minimum

Quantity of a commodity which is offered for sale in a market is called:

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Trade

Supply

Demand

Stock

In production process, when units of variable factors along with fixed factor of production are increased, marginal product goes on failing, this tendency in economics is called

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Law of decreasing return

Law of increasing return

Law of production

Law of constant return

If price decreases but supply remains constant, it is called:

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Fall in supply

Contraction in supply

Expansion in supply

Rise in supply

Firms earn abnormal profit when:

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AR = AC

AR < AC

AR > AC

AC = AR

With an increase in the price of any good its substitutes will have

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a fall in its price

an increase in its prices

an increase in its demand

a decrease in its price

If there is big change in Price and demand, it is called

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Arc elasticity

Point elasticity

Income elasticity

Cross elasticity

If variable costs of a firm are covered partly under perfect competition, then that firm

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Will run with normal profit

Will run with abnormal profit

Will run with minimum loss

Will not continue its business and close down

In the short period, fixed cost curve has the tendency

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Parallel to ox-axis

Parallel to oy-axis

Positive

Negative

Which law provides the base of law of demand

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Law of supply

Law of diminishing marginal utility

Law of equi marginal utility

Law of decreasing return

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Principles of Economics Icom Part 1 English Medium Online Test MCQs With Answers

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