Question # 1

If the price of factor A is Rs.8.00 per hour, and its marginal product is 10 units, and the price of factor B is Rs. 5.00 and its marginal product is 9, is the producer is likely to.

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Hire more of A and less of B

Hire more of B and less of A

Start paying factor A more

Try to use factor B more productively

A monopolist will discontinue production if

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Marginal revenue is less than marginal cost

Marginal revenue is less than average total cost

Marginal revenue is less the average fixed cost

Price is less than average variable cost

Indifference curve has following characteristics except.

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Convex to origin

Intersect each other

Not necessary to be parallel

None of these

When economists say that a per son is economizing they mean that the person is.

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making choices to gain benefits at lowest possible cost

Making a lot of money

Purchasing goods that are generic cheap or of low quality

Learning how to run a business more effecitively

A consumer is said to be in equilibrium when the marginla utility and price of a commodity

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More

Less

Irrelevant

Equal

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

In perfect competition there is.

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Many buyers

Many sellers

Homogeneous product

All of these

The demand for labor will be more elastic if

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There are few substitutes for labor

There is a shor time under consideration

Labor is a large percent of the total cost of production

The demand for the product is relatively inelastic

A normal good can be defined as one which consumers purchase more of as.

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Price fall

Price rise

Income fall

Incomes increase

What is the production level for public good W, if the government uses full cost pricing.

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Q = 2

Q = 5

Q= 4

Q = 6

If the price of product X falls and this change increases the demand for product Y then.

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X and Y are complements

X and Y are substitutes

X is an inferior good

Y is an inferior good

If there is no price surprise, total output is.

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50

150

400

200

Last week, Martha spend one day cleaning a house for this she was paid $50 The rest of the week, she spend looking for a job Martha would be callsified as.

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Employed

Unemployed

Not in the labor force

None of these

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

In the long run a profit maximizing monopoly produces an output volume that

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Equates long run marginal cost with marginal revenue

Equates long run average revenue

Assures permanent positive profit

Is correctly described by both a and c

A monolithically competitive market is characterized by all of the following except.

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Easy entry

Differentiated product

Excess capacity

Economic profit in the long run

Which of the following concepts represents the extra revenue a firm neceives from the services of an additional unit of a factor of production.

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Total revenue

Marginal physical product

Marginal revenues product

Marginal revenue

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

The long run is a time period that is.

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Five years or longer

Long enough to change the level of labor hired

Long enough to change the size of the firm's plant

Ten years or longer

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

The conditions necessary for a firm to be able to price discriminate include.

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Segment able markets

Difference in price elasticity of demand among the segments

The inability of customers to transfer products

All of the above

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