Question # 1

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

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

In the short run, the supply of farm commodities is.

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Inelastic

Less elastic

More elastic

Undetermined

A utility contour shows all the alternative combinations of two consumption goods that.

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Can be produced with a given set of resources and technology

Yield the same total of utility

Can be purchased with a given budget at given prices

Equate the marginal utilities of these goods and therefore make the consumer indifferent between them.

In the neighborhood of the long run equilibrium of a monopolistically competitive firm average cost will be.

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Decreasing

Constant

Increasing

At a minimum

Under perfect competition, the price system automatically result in efficient output selection when

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MC = MR

MC = MU

P = ATC

P > AVC

If A is preferred to B and B is preferred to C and there is indifference between A and D

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D is preferred to C

B is preferred to D

There is indifference between C and D

There is indifference between B and D

In an industry with a falling long term supply curve, which of the following is true.

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Industry unit cost are constant

Industry unit costs are decreasing

Industry unit costs are increasing

Industry unit costs cannot be determined

One of the following has more elastic demand.

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A commodity with substitutes

A commodity having more than one use

A commodity commonly use

None of these

Given the cost data indicated in the table above the average variable cost of producing 7 units of output is

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Rs.37

Rs.29

Rs.31

Greater than Rs.37

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

If the price of an apple increased from 50 to 60 the quantity demanded will decrease because of.

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The substitution effect only

The income effect only

A change in income

The substitution and income effects.

To maximize revenue, an excise tax should be imposed on a product

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That has a highly elastic demand curve

Such as St. Joseph's children's' aspirin.

Such as salt

such as Toyota automobiles

In long run equilibrium a monopolistically competitive firm will find.

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Marginal cost below average total cost

Marginal cost wqual to minimum average total cost

Both a and b

Neither a nor b

In a typical cartel agreement the cartel maximizes profit when it.

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Behaves like a monopoly

Behaves like a perfectly competitive firm

Behaves like a duopoly

Is flexible in enforcing production targets

The key feature of oligopoly is.

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Excess capacity

High profitability

Product differentiation

Interdependence of firms

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

A monopolistically competitive firm differs from a perfectly competitive firming that unlike the perfectly competitive firm it.

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Faces a downward sloping demand curve

Can change the characteristics of its product.

Can vary the price of its product.

All of the above

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

The classical are of the view that utility can be.

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Ranked

Counted

Expressed in numbers

Not counted

Along the long run supply curve all of the following can vary except.

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The level of profits

The number of firms in the industry

Input prices

The level of input usage

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