Question # 1

The quantity of Y demanded increases by 6% when income changes, and income elasticity of demand is -0.9 income

Choose an answer

Decreased by 5.4 %

Decreases by 8%

Increased by 15%

Decreased by 6.7 %

Elasticity of demand of luxurious goods is always more elastic

Choose an answer

More elastic

Less elastic

Equal elastic

None elastic

The income effect of a price change

Choose an answer

Is always positive

Is always negative

May be positive or negative

Is associated with a change in nominal income

Given the above demand and supply equations for widgets, the equilibrium price and quantity is.

Choose an answer

P = Rs. 20, Q = 60

PO = Rs. 60, Q, = 20

P Rs. 35, Q = 45

P - Rs. 12, Q = 88

Indifference curve theory is old wine in new labeled bottle is said by.

Choose an answer

Marshall

Griffin

Ricardo

Allen

A price cross elasticity of 0.81 between X and Y shows that.

Choose an answer

They are complementary goods

They are competitive substitutes

They are not substitutes

a reduction in the price of one would cause an increase in the consumption of the other.

If the estimated values of Y and Py in 1987 are Rs. 30,000 and Rs. 8 respectively the marginal revenue of X is.

Choose an answer

260 - 160 x

420 - 4Qx

240 - 16 Px

80 - 4Qx

At level of income and output of 100 in the diagram above

Choose an answer

APC < 1

Equilibrium occurs

Consumption expenditures are equal to 100

MPC > APC

A price decrease and an increase in income are similar in that

Choose an answer

Both force the consumer to achieve a lower level of well being

Both force the consumer to reach a lower indifference curve

Both move the budget line outward

^{They are not similar at all}

A profit maximizing monopolist in two separate markets will

Choose an answer

Charge different price according to elasticity

Charged same price

Charged very high price

Charged very low price

Which of the following is not a basic assumption of perfect competition.

Choose an answer

Free entry and exit

Many small sellers and buyers

Perfect information

Short run

Which of the following does not apply to pareto efficiency.

Choose an answer

Consumptive efficiency

Productional efficiency

Allocative efficiency

Equity

Which of the following does not characterize monopolistic competition.

Choose an answer

Product differentiation

Many producers

Absence of advertising

Some control over price

Under perfect competition, the price system automatically result in efficient output selection when

Choose an answer

MC = MR

MC = MU

P = ATC

P > AVC

The supply curve of a monopolist is always.

Choose an answer

More elastic

Less elastic

undefined

Steeper

In a perfectly competitive market if firms are earning an economic profit the economic profit.

Choose an answer

Attracts entry by more firms, which lowers the market price

Can be earned both in the short run and long run

Is less than the normal profit

Leads to a decreases in market demand

Price discrimination occurs when

Choose an answer

A commodity has different elasticity in different markets

Same elasticity in different markets

Unitary elasticity different markets

Noe of these

A firm charges Rs. 800 for its unique word processor. If total revenue is Rs. 56,000 in July, how many word processor were sold that month.

Choose an answer

70

95

700

800

the ouput where diminishing return to production begin is also the ouput where

Choose an answer

Marginal cost is at a minimum.

Average total cost is at a minimum

Average variable cost is at a minimum

Marginal and average

If a good has a lot of substitutes, then its demand is.

Choose an answer

Elastic

Inelastic

Unit elastic

Elastic or inelastic depending on whether the price is increasing or decreasing

More Classes

Other Links

PPSC Economics Chapter 2 Micro Economics MCQs With Answers

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer

Choose an answer