Question # 1

One of the following is not assumption of the marginal productivity theory.

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All factors of production are present substitutes of each other.

Law of increasing return applies in the production process.

There is perfect mobility of factor of production

Units of each factors of production are identical

Limited liability is one of the advantages of

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partnership

sole proprietor

joint stock company

cooperative society

When total product (TP) reaches its maximum, Marginal product (MP) is_

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Zero

Positive

Negative

Rising

When a firm using a fixed amount of land and capital takes on more workers, it finds that marginal product(MP) of labour falls but the average product(AP) of labour rises. This can be explained by the factors that

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MP of labour is grater than AP of labour

additional workers are more efficient

MP and AP are equal

AP is maximum

Scarcity means

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non availability of goods

high price of goods

less supply than demand

high profit of the firms

With a fixed in the market period, if the demand of a product rises, then:

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Price will fall

Price will rise

Price will remain the same

None of the three

Which of the following is NOT capital as economists use the term

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an office building

machinery in a factory

an industrial robot

money

To promote capital investment in a country, what is essentially required is.

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Basic infrastructure

Bank credit

Law and ordered

Stock broker

Land means nature resources which are available.

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On the soil

Above the soil

Below the soil

All the above

The utility of durable consumer goods.

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Diminishes with the passage of time

Perishes, if not used

Can be obtained constantly

None of the three

Which of the following factors takes risk, innovates and coordinates

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capital

labour

bank

entrepreneur

Which of the following is correct with respect to resources

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Money is a capital good

Human skills are a labour input

Entrepreneur is part of the labour input

Natural resources include human input

The shape of rectangular hyperbola is made by

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MC

AFC

AVC

TFC

In economics, assumptions

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make economics theory useless

mean other things equal

enable economics to simplify reality

used in micro and not in macroeconomics

If the price of a product increase from Rs. 12 per unit and as a consequence quantity demand of the product falls from 100 units to 50 units . The price elasticity of the product will be.

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2.5

0.5

1.5

3.5

Labour force participation rate is the

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proportion of population that is working

proportion of population aged above 20

proportion of skilled workers

proportion of female workers to male workers

Indifference curves are convex to the origin because

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two goods are perfect substitutes

two goods are imperfect substitutes

two goods are perfect complementary goods

goods area jointly demanded

Qd = 50 - 5P people will demand 50 when price of the product is:

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Very high

Very low

Zero

Unity

General price level and real income of the people are correlated with each other

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Negatively

Positovely

Normally

Sub normally

How many functions of capital

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6

5

4

7

A consumer's spending is restricted because of

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marginal utility

budget constraint

demand curve

unlimited wants

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