Question # 1

Market demand curve is a summation of all individual demand curves as

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Vertical

horizontal

mathematical

local

Land, labour and capital are needed to produce goods. They are collectively called

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elements of production

factors of production

tools of production

cost of production

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

Which is NOTtrue

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perfect monopoly does not exist in real world

perfect competition does not exist in real world

every monopoly is evil

every firm wants to reduce competition

Equilibrium

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is a state that can never be achieved in economics

is an important idea for predicting economics changes

is a stable condition

is an unstable condition

All factors of productions are variable in the:

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Marked period

Short period

long period

None of the three

A firm maximizes profit of

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MRP = wage rate

MRP = ARP

MRP is rising

TRP = wages

y = 2^x is a.

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Log function

Linear equation

Exponential function

Increasing function

A competitive firm is in equilibrium in the long-run where:

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ME = AR = LMC = P

MR = AR = LMC = LAC

MR < AR = LMC <LAC

None of the three

According to law of diminishing marginal utilities , a consumer maximises his total utility where.

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MU_a = MP_a

MU_a = AU_a

MU_a = TC_a

MU_a = P_a

Supply curve

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is vertical in long run

is flatter in long run

is same in long and short run

is horizontal in both short and long run

In short period how many possibilities in which a firm may find itself

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four

five

six

seven

If we know that quantities bought and sold are equal, we can conclude that

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quantities demanded and supplied are also equal

the market is in equilibrium

there will be no tendency for a price change

all of the above

Normal profit is

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part of total cost

part of economic profit

part of fixed cost

total revenue minus total cost

If elasticity of supply is one, supply curve will be

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horizontal

vertical

passing through origin

touching x-axis

In market equilibrium, supply is vertical line. The downward sloping demand curve shifts to the right. Then

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price will fall

price remains same

price will rise

quantity rises

The utility of an additional unit of a product is

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Law of demand

Law of substitution

Law of supply

Law of diminishing marginal utility

According to Keynes interest is a payment for

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use of durable goods

use of capital

use of money

use of land

Validity of economics theories can never be proved with 100 percent certainty, because

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ceteris paribus clause

limited number of observation is possible

very large number of economic theories proved false in the past

b and c

Why should employ units of a factor to a point where

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MP is negative

MP is equal to price of the factor

MP is positive

MP is rising

MU curve

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rises left to right

is always vertical

falls left to right

is always horizontal

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