Question # 1

Firm A's margin of safety is.

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0.10

0.40

0.20

0.30

When a tax is levied on a good.

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The market price falls because demand declines.

The market price falls because supply falls.

A wedge is placed between the price buyers pay and the price sellers receive

The market price rises because demand falls.

Which of the following does not represent a barrier to entry into a market.

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Import quotas

patent laws

Government franchleses

Anti trust legislation

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

An economy that falls to realize all of its p9otential gains from specialization is.

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Achieving productive efficiency

Operating outside its production possibilities curve

Operating on its production possibilities curve in an inefficient manner

Operating inside its production possibility curve

A firm's total revenue is Rs. 4,500 when it sells 15 pairs of boots compared to Rs. 4,480 when it sells 14 pairs,. The marginal revenue of the 15th pair of boots is.

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Rs.20

Rs.320

Rs. 4,480

Rs.300

The demand for labor slopes down and to the right because of.

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The law of demand

The iron law of wages

The law of diminishing marginal returns

Economies of scale

A demand curve that is an equilateral hyperbola is.

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Perfectly elastic

Relatively elastic

Unit elastic

Relatively inelastic

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

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260 - 160 x

420 - 4Qx

240 - 16 Px

80 - 4Qx

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

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Marshall

Griffin

Ricardo

Allen

Economists tend to disagree primarily about.

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The implications of scarcity for our economy

Which resources are free

Topics in positive economics

Issues of normative economics

A linear homogenous production function would reveal.

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Constant returns to scale

Increasing returns to scale

Decreasing return to scale

Doubling all inputs would more than double output

"Treating an individual as typical of a group" in the definition of.

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Pure discrimination human capital

Statistical discrimination

Human capital

Specific skills

Company A estimates the price elasticity of demand for its products.3.0 The price of the product is Rs. 15. If MC = 2+40, the profit maximizing level of output.

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4 units

2 umits

5 units

3 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

In contract to perfectly competitive markets monopolists

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Do no have to worry about market demand

Sell only if demand is inelastic

Can never incur an economic loss

Can earn an economic profit indefinitely

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.

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70

95

700

800

If a monopolist's demand curve is downward sloping and linear, then its total revenue curve must be.

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Identical to the demand curve

A ray from the origin with a slope equal to price

negative sloped with twice the slope of the demand curve

A rising function of output that increases at a decreasing rate , reaches a maximum, then falls.

Duopoly is a market situation when there is

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Single seller

Many seller

Two seller

Few seller

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

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

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