Question # 1

A market demand curve can be derived by adding all the individual demand curves

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Vertically

Horizontally

In parallel

Any of the above as long as it is consistent

Cardinal approach theory was presented by

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Marshall

Adam smith

Robbins

Hicks

Which of the policies in the table above an increase in social welfare according to pareto efficiency.

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Policy A

Polies A and B

Policies A and D

Policies C a, -d D

A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is called.

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a competitive equilibrium

An open market solution

The Nash equilibrium

The cartel equilibrium

In perfect competition the transpiration cost

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Excluded from the total cost

Is important figure in total cost

Is ignored

All of these

As the opportunity cost of a good falls, ceteris paribus the substitution effect implies that people buy

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Less of the good and more of its substitutes

More of that good and less of its substitutes

Less of that good and less of its substitutes

More of that good and more of its substitutes

Holding all other things constant a higher price for ski lift tickets would.

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Increase the number of skiers

Increase the price of skis

Decrease the number of skis sold

Decrease the demand for other winter recreational activities

A firm A's break even quantity is.

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10 units

40 units

50 units

30 units

When the demand curve is vertical its shows that the demand is.

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Less elastic

Very high elastic

Elastic

Perfectly inelastic

Projects A,B,C,D,E cost Rs. 100, Rs, 200, Rs. 300, Rs. 400, and Rs. 500 with MEC's of 0.07, 0.06,0.09 ,0.10 and 0.11 respectively. The market rate of interest is 8% Total investment spending is

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Rs. 1500

Rs.1300

Rs.1200

Rs.300

When there is a surplus in a market

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There is downward pressure on price

There is upward pressure on price

The market could still be in equilibrium

There are too many buyers chasing too few goods.

Law of variable proportion is also called.

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Law of non proportion returns

Law of substitution

Law of casts

Law of demand

Finance minister tax a commodity

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having elastic demand

ignore elasticity

Having unti elastic demand

Having unit elastic demand

An increase in the discount rate at the FED generally has the following effect on bond prices.

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There is no demonstrated effect

Such an increase tends to lower bond prices.

Such an increase tends to raise bond prices

Bond prices are related to the government purchase and sale of bonds.

In perfect competition, a seller by increasing price.

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Sell more

Produce its revenue

Decrease cost

Sell nothing

If the demand curve for a good is downward sloping then the good must be.

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Normal

Inferior

Giffen

Either a or b

An oligopolistic industry can be characterized by all of the following except

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May sellers

mutual interdependence

Economies of scale

A homogenous product

In pure monopoly there is.

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A lot of firms

Two firms

A single firm

Many firms

According to Keynes, when the great depression started the government should be.

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Done nothing

Decreased the money supply

Had a large increase in government spending.

Enacted high tariffs such as the smoot Hawley tariff

In the short run if price falls the firm will respond by

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Shutting down

Equating average variable cost to marginal revenue

Reducing output along its marginal cost curve as long as marginal revenue exceed average variable cost

None of the above

If the price elasticity of demand for a non giffen good is inelastic are decreased in its price result in.

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Increase in demand

Decrease in demand

Increase in total revenue

Decrease in total revenue

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