Question # 1

Price elastic of demand measures

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change in price caused by changes in demand

the rate of change of sales

the responsiveness of demand to price changes

the value of sales at a given price

The law demand will not be valid in case of.

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Very high price products

Normal goods

Price effect

Income effects

According to Ricardo rents are high because prices of produce of land are

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high

low

constant

none of the above

If the supply of land is assumed to be perfectly inelastic which of the following rent will it yield.

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Scarcity rent

Differential rent

Quasi rent

Scarcity rent

Economics theory means

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economic policy

economic principles

descriptive economics

economics facts

Law of decreasing returns generates

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law of economic growth

law of increasing costs

law of variable costs

law of decreasing costs

A seller can increase his sales revenue by charging a lower price, if the demand has

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e < 1

e = 1

e > 1

e = 0

At the point of equilibrium of firm under perfect competition

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MC curve must be rising

MC curve must be falling

MR curve must be rising

MR curve must be falling

If a firm shuts down temporarily, it will incur loss equal to

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AFC

AVC

TFC

TVC

The concept of differential rent is given by.

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Marshall

David Ricardo

Hobson

Robbins

Different kinds of imperfect competition are.

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Monopoly

Monopolistic competition

Oligopoly

All the three

In case of perfectly elastic demand curve, the demand curve will be parallel to the :

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Horizontal axis

Vertical Axis

None of the above

The production function relates to

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cost of output

cost of input

output to input

demand to output

y = 20-5 x this function is.

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Increasing function

Decreasing function

Constant function

Exponential function

Lowest point on the average cost curve in the long-run represents;

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Optimum factors combination

Maximum level of output

Maximum level of total revenue

None of the three

Normally a demand curve will have the shape

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horizontal

vertical

downward sloping

upward sloping

In the second stage of the law of variable of proportions the average product:

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Rises

Remains constant

Falls

None of the three

Marginal land

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is uncultivable land

gets low rent

gets no rent

cannot be sold

When AC curve rises, MC curve remains:

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Above AC

Below AC

Equal AC

Negative

Which is a condition for existence of monopoly

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big size

identical product

absence of government taxes

no close substitute

The basic goal of a firm is to

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maximize revenues

maximize employees' welfare

maximize profit

maximize output

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