Question # 1

The price elasticity of demand will increase with the length of the period to which the demand curve pertains because.

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Consumers incomes will increase

The demand curve will shift toward

All prices will increase over time

Consumers will be better able to find substitutes

As long as the principle of diminishing marginal utility is operating any increased consumption of a good.

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Lowers total utility

Produces negative total utility

Lowers marginal utility and therefore total utility

Lowers marginal utility, but may raise total utility.

The method most commonly used to test the overall significance of a regression is.

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The t test

The F -test

Chi square test

R

Which of the following is correct for the demand and supply schedules given above.

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The demand curve is non linear

The slope of the supply curve is 4

Equilibrium quantity is 40 units

The slope of the demand curve is 0.5

When the marginal physical product of labor is 800 - 2N , the price of goods is Rs. 2, and the cost of labor is Rs. 4 per unit, the quantity of labor employed is.

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20 Units

800 Units

399 Units

80 units

Short run is a time frame where a firm can change its.,

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Total cost

Total production

Plant size

None of these

If a monopoly is unable to cover its short run variable costs, if should.

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Shut down

Raise price

Lower price

Increase output

If there are 50 firms in a industry each selling 2% of the total sales the concentration ratio is.

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50%

2%

8%

100%

The "compensated" demand curve is the demand curve that.

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Shows only the income effect

Shows only the substitution effect

Shows both the income and substitution effects

Shows the Geffen good demand curve

A long-run total cost curve can be constructed from

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An income consumption curve

A price consumption curve

Isoquant is cost expansion path diagram

An Engel curve

If average fixed cost is 40 and average variable cost is 80 for a given output we the know that average total cost is.

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40

¹²⁰

80

None of the above

If a monopolist faces a downward sloping market demand curve its.

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Average revenue is always less than marginal revenue

Marginal revenue is greeter than the price of the units it sells.

Average revenue is less than the price of its product.

Marginal revenue is always less than the price of the units it sells

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

In monopoly there is.

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Single seller

Single buyer

Two producers

Few seller

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

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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

When the price of an inferior goods falls ceteris paribus the substitution effect leads to ________ in the quantity purchased and the income effect leads to _______ in the quantity purchased.

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An increase an increase

An increase, a decrease

A decrease, an increase

A decrease, a decrease

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

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Elastic

Inelastic

Unit elastic

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

A monopoly market.

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Generally falls to maximize total economic well being.

Always maximizes total economic well being.

always minimizes consumers surplus

Generally falls to maximum produce surplus

"The quantity demanded increases as its price increases and falls as its price falls" is called given goods, is presented by.

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Allen

Marshall

Adam smith

Robert griffin

For a competitive firm the demand curve

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A horizontal

Coincides with the marginal revenue curve

Coincides with the average revenue curve

All of the above

Firms entering a perfectly competitive market will cause the price of the product to

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Decrease

Increase

Remain constant

Respond more to consumer demand than supply

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