Question # 1

A firm earns economic profit when total profit exceeds

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normal profit

implicit costs

explicit costs

variable costs

An entrepreneur is a person who performs the dual function of risk-taking and control. This is the definition of

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Prof. Knight

Prof. Marshall

Prof. Robbins

Prof. Knees

One of the following is not an exception the law of demand.

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Very high price products

Very low price products

Ignorance of consumers

Non of the above

The products which are not priced in the market are called .

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Economic goods

Non-economic goods

Merit goods

Social goods

A firms reaches its shut down point where:

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AC > AR

AC = AR

AC< AR

AVC = AR

Rickshaw has replaced tonga as local transport. As a result the tongs-drivers have become unemployed. Such unemployment is called

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structural

frictional

seasonal

personal

The transformation of resources into economic gods and services is

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input

production

entrepreneur

market

Habib Bank limited means that.

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Its capital is limited

It shareholders are limited

The liability of each shareholders is limited

Non of the three

To the economist, investment refers to

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sale of real estate

creation of new capital

purchase of a prize bond

decrease in inventories

To measure changes in purchasing power of money, we use

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percentages

index numbers

averages

variables

How many types of organization

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5

6

7

8

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

With a fall in price quantity demand changes in such a way that total expenditure of the consumer remain constant, elasticity of demand will be.

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Equal to unity

Greater than unity

Less than unity

Equal to zero

If elasticity of supply is greater than one. supply curve will be

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horizontal

vertical

passing through origin

touching y-axis

He said interest is payment for use of money

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Adam Smith

Ricardo

Keynes

Marshall

A factory is an example of

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capital

natural resources

entrepreneurship

none of the above

Demands and supply curves cross at

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always at 60 degree

at 90 degree

at equal angle

at any angle

If demand is unitary elastic, a 25% increase in price will result in

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25% change in total revenue

no change in quantity demanded

1% decrease in quantity demanded

25% decrease in quantity demanded

A fall fall in supply will take place due to a:

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Business collusion

Bumper crop

Fall in custom duty

Fall in income

The concept of quasi rent was given by.

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Ricardo

Adam smith

Alfred Marshall

Robbins

Normal profit is called normal because

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it is neither very high nor very low

it is minimum acceptable to the producer

it is minimum which buyer wants to pay

it is maximum allowed by govt.

The law of variable proportions was presented by.

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David Ricords

Alfred Marshall

W.J.L. Ryan

Pareto

The following is NOTa factor of production

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labour

entrepreneurship

land

money

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