Question # 1

An increase in price causes an increase in total revenue when.

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Demand is elastic

Demand is inelastic

Demand is unit elastic

All of the above are possible

The ABC corporation.

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Is earning a pure economic profit

Should produce zero units of output

Is sustaining an economic loss

Is breaking even

Goods which can be consume directly are

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Producer goods

Consumer goods

Free goods

Economics goods

If a firm which polluted the water of area had to pay all social cost would have

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Small output

Large output

Heavy output

B and C

The Marginal cost of product W exhibiting positive externalities is McW = 25 + 5 Qs, the competitive price for each unit of W (Pw) is Rs. 175 and the positive externality is worth Rs. 100 to society for each unit produced. Society considers product W under produced by how many units.

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10 Units

15 Units

20 Units

5 units

Foundation of law of demand is.

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Law of diminishing marginal utility

Law of substitution

Law of increasing return to scale

Law of diminishing marginal rate of substitution.

The elasticity of demand for cigarettes by a non smoker is.

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Unitary price elastic

Relatively price elastic

Perfectly price elastic

Perfectly price inelastic

Immediately after a through we would expect to have al

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Peak

Recession

Recovery

Another trough

In price discrimination, which section of the market is charged the higher price.

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The section with the richest people

The section with the oldest people

The section with the most inelastic demand

The section with the most elastic demand

As long as all prices remain constant an increase in money income results in.

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An increase in the slope of the budget line

A decrease in the slope of the budget line

An increase in the intercept of the budget line.

a decrease in the intercept of the budget line.

A monopolist will maximize profit.

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Where total revenue is maximized

Where the slope of the total revenue function equals the slope of the total cost function

Where average cost is at a minimum

Where all the above are ture

The key feature of oligopoly is.

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Excess capacity

High profitability

Product differentiation

Interdependence of firms

Firm A's margin of safety is.

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0.10

0.40

0.20

0.30

The price elasticity of demand is teh same thing as the negative of the

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Slope

Reciprocal of slope

The first derivative of the demand function

Reciprocal of slope times the ratio of price to quantity

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

Which of the following correct about firms in an oligopoly.

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Each firm has complete control over its own selling price

All firms independently charge monopoly prices

No one firm controls price but each has an influence on the price

There is no competition in oligopoly industries

A drop in the price of compact disc shifts the demand curve for prerecord tapes leftward from that you know that compact discs and precorded tapes are.

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Inferior goods

Substitutes

Complements

Normal goods

BATA's marginal utility per dollars is .8 for both shorts and running shoes,. To attain her consumer equilibrium BATA should.

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Buy an additional pair of shorts

Buy an additional pair of both items

Possibly not make any adjustment in her behavior

Sell her shorts and keep her shoes

Everyone's absolute income doubles family A's APC, according to the simple Keynesian consumption function is expected to.

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Fall

Double

Increase

Halve

The are price elasticity of demand is approximately

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0.3

3.3

6.0

0.2

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