Question # 1

Revealed preference theory was presented by.

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Samuelson

Hicks

Marshall

rICARDO

When internal economics of scale occur

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Total costs fall

Marginal costs increase

Average costs fall

Revenue falls

A mixed economy

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Has supply but not demand

Has demand but not supply

Has supply and demant

Has market forces and government intervention

Which of the following can the government not use directly to control the economy.

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Pay rates within the privates sector

Pay rates in the public sector

Investment in education

Benefits available for the un employed and sick

The law of diminishing returns assumes.

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There are not fixed factors of production

There are no variable factors of production

Utility is maximized when marginal product falls.

Some factors of production are fixed

If the marginal revenue is less than the marginal cost then to profit maximize a firm should.

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Reduce output

Increase output

Leave output where it is.

Increase costs

If a few firms dominate an industry the market is known as.

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Monopolistic competition

Competitively monopolistic

Duopoly

Oligopoly

In a Boom

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Surpluses are likely to occur

Prices are likely to fall

supply will increase immediately to match demand

Shortages may occur

Sales taxes are generally considered to be.

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Proportional taxes

Regressive taxes

Progressive taxes

Indirect taxes

The difference between gross investment and net investment is.

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Depreciation

Acceleration

Deceleration

Capital investment

An increase in price all other, things unchanged leads to.

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Shift demand outwards

Shift demand inward

A contraction of demand

An extension of demand

The profit per scale is a measure of.

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Profit

Profitability

Feasibility

Realism

In perfect competition.

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the products firm offer are very similar

Products are heavily differentiated

A few firms dominate the market

Consumers have limited information

A deflationary policy could include

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Increasing injections

Reducing taxation rates

Reducing interest rates

Reducing government spending

Which of the following is not a way of helping developing economics.

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Aid

Loans

Protectionism of developed markets

Training and education programmes

The bowed shape of the production possibilities curve illustrtres.

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The law of increasing marginal cost

the production in inefficient

That production is inattainable

The demand is relatively inelastic

To be productively efficient a firm must produce where

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Marginal costs are maximized

Marginal costs are minimized

Average costs are minimized

Average revenue is maximized

An increase in productivity should.

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Lead to a contraction of supply

Lead to an expansion of supply

Lead to a shift in supply outwards

Lead to higher equilibrium and lower equilibrium quantity.

Inflation.

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Reduces the cost of living

Reduces the standard of living

Reduce the price of products

Reduces the purchasing power of a price

Profit making is basic motive in.

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Socialism

Mixed economy

Communism

^Capitalism

Demand for primary products is likely to be

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Very sensitive to price

Price elastic

Unit elastic

Income inelastic

What lies is at the heart of the allocation of goods and services in a free market economy.

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Concerns of equity or equal distribution among individuals.

The order or command of the ruling government or dictator

The wishes of consumers in the market

The price mechanism

If marginal product is below average product.

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The total product will fall

The average product will fall

Average variable costs will fall

Total revenue will fall

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