Question # 1

If a firm triples all inputs and output triples as well the firm is subject to

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Constant returns to scale

Increasing returns to scale

Economies of scale

Both b and c

Micro economics studies such topics as

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The factors that determine inflation

The forces that influence the price of shoes

The determinants of total output

Whether the unemployment rate will rise or fall

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

Extension and contraction of demand mean

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Movement on the same demand curve

Movement to high demand curve

Movement to lower demand curve

Movement to another demand curve

Allocative efficiency is achieved under which of the following market structures.

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Perfect competition

Monopolistic competition

Oligopoly

Monopoly

For commodities, X and Y, the possibilities are X is preferred to Y , Y is preferred to X or X and Y are equally preferred, In indifference curve analysis, this is known as the.

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Comparability assumption

Transitivity assumption

Non seriation assumption

Reflexivity assumption

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

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Inelastic

Less elastic

More elastic

Undetermined

The Isoquant curve shows different combinations of two factors of production which give the producer.

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Different level of output

High level of output

low level of output

Same level of output

Disposable income is equal to.

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National income

National income minus taxes plus transfers

Real GDP

National income Minus taxes

If the price elasticity of demand for a non giffen good is inelastic are decreased in its price result in.

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Increase in demand

Decrease in demand

Increase in total revenue

Decrease in total revenue

In order to constitute an oligopolistic market structure.

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There must be a few firms in a given relevant market

There must be a few firms selling in a national market

There must be more than 20 firms selling in the international market

There must be fewer than 15 firm is any given market

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

In Production of goods and services tradeoffs exist becasue.

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Buyers and sellers often negotiate prices

Society has only a limited amount of productive resources

Not all production is efficient

Human wants and needs are limited at a particular point in time

Labour has the following characteristics accept one.

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It cannot be separated form labourer

It cannot be stored

Its supply cannot be increase at once

Bargaining power of laborer is very strong

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

Firm A's margin of safety is.

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0.10

0.40

0.20

0.30

Cross -elasticity following commodities is very high

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Compliments

Normal

Goods substitutes

Good compliments

The classical are of the view that utility can be.

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Ranked

Counted

Expressed in numbers

Not counted

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 the short run no firm operates with a loss unless

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Variable cost equals fixed cost

Variable cost falls short of fixed cost

Total revenue covers variable costs

Total revenue covers fixed cost

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

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