Question # 1

An entrepreneur who collects profits in the short run for a new invention is collecting.

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The competitive rate of return on capital

Temporary monopoly profit

Rent

A Ramsey surplus

Duopoly is a market situation when there is

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Single seller

Many seller

Two seller

Few seller

An elasticity coefficient of -1 means that

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The demand curve is perfectly inelastic

The demand curve is parfectly elastic

The relative changes in price and quantity are equal

Expenditures on the good would increase if price were reduced.

Average fixed cost

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Is U shaped

Declines over the entire output range.

Is a long run concept only

Is influenced by diminishing returns to production

The arc income elasticity of demand is approximately

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0.02

1.9

3.3

0.5

In perfect competition the transpiration cost

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Excluded from the total cost

Is important figure in total cost

Is ignored

All of these

In monopolistic competition firm sell

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Same goods

Differential goods

Inferior goods

Superior goods

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

The firms average variable cost of the 150th unit is.

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Rs.15

Rs.17

Rs.20

Rs.9

The exit of firms out of a competitive market causes the supply curve to.

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Shift leftward

shift rights ward

None of the above for the exit of firms supply curve

shift either left or right depending on the number of firms leaving the market

A monopsony is

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The scale supplier of an input

The scale supplier of an output

The sole buyer of some type of input

A unionized industry

An income demanded curve of an inferior good is.

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Same in slope

Upward is slope

Downward in slope

None of these

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

If the production function is Q = 8 KL the marginal rate of technical substitution of labor for capital is.

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8

K/L

L/K

B/KL

When the demand curve is a straight line the elasticity of demand at the center point will be.

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Equal to zero

infinite

More than one

Equal to one

A demand curve is not related to

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The time period

The price of the commodity

The price of substitution

Any of above

The statement that marginal cost = marginal revenue leads to profit maximization of loss minimization is true.

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All the time

Only in the long run

Only if "marginal cost is rising at the point of equality.

Only if average total cost is falling at the point of equality

In monopoly there is.

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Single seller

Single buyer

Two producers

Few seller

The marginal rate of substitution for two goods can be obtained from

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The slope of the demand curve

The slope of the indifference curve

The ration of first derivative of the total utility functions

B and D both

Perfect competition implies

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Homogeneous goods

Inferior goods

Superiors goods

Differential goods

A firm A's break even quantity is.

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10 units

40 units

50 units

30 units

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

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

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

The fundamental reason people must choose which goods to buy and consume is because of.

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Scarcity

Specialization

People engaging in exchange

The fact there are many different economic agents

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