Question # 1

Other things equal, if a good has more substitutes, its price elasticty of demand is

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larger

smaller

zero

unity

A firm should shut down in the short run if it is not covering its

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variable cost

fixed cost

total cost

explicit cost

When average product (AP) and marginal product (MP) are rising.

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AP > MP

AP = MP

AP < MP

AP = MP = 0

Economics laws are:

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Statements of tendencies in economic behaviour

Unrealistic to deal with real economic problems.

Absolute and certain like the laws of physical science

Used to forecast the growth rate of an economy.

Natural environment that supports production of goods and services is included in

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labour

money

capital

land

Profit is maximum when

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distance between TR and TC is maximum

distance between AR and AC is maximum

distance between MR and MC is maximum

distance between MR and AR is maximum

Which one is the third stage of production under law of variable proportions

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Decreasing average returns

Increasing average return

Negative marginal return

Increasing marginal return

The price of an non-economic good is:

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Very low

Very high

Zero

Negative

Prof. Marshall thinks

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Economics studies national welfare

Economics studies personal welfare

Economics studies total welfare

Economics studies material welfare

Who introduced indifference curves to explain consumer's beghavior

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J.R Hicks

Marshall

Robbins

Adam Smith

Given the demand curve, a rise in supply will.

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Increase quantity supplied

Price will fall

Price will rise

Both (a) and (b)

One of the following does not represent imperfect competition.

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Day to day market

Monopoly

Duopoly

Monopolistic Competition

The elasticity of demand of durable goods is

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less than unity

greater than unity

equal to unity

zero

The following affect rent EXCEPT

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better location

fertility of land

cleverness of landlords

scarcity of land

As output increase, one of the following costs will also increase:

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Marginal cost

Average cost

Variable cost

Fixed cost

Unit cost is another name for

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MC

AVC

ATC

AFC

The sacrifice of an alternative use of resources to produce something is called its

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real cost

opportunity cost

sacrifice cost

alternative cost

Gross profit does NOT include

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rent of his own land

interest of his own capital

pure profit

taxes

Power of a product which can satisfy human want is.

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Utility

Total utility

Average utility

Marginal utility

The slopes of average and marginal products curves are always zero under:

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Law of increasing returns

Law of diminishing returns

Law of constant returns

Law of variable propoitions

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