Question # 1

In monopoly the firm can

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Price

Output

Either price or output

Both a and b

In perfect competition, a seller by increasing price.

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Sell more

Produce its revenue

Decrease cost

Sell nothing

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

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

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

Immediately after a through we would expect to have al

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Peak

Recession

Recovery

Another trough

Perfect competition implies

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Homogeneous goods

Inferior goods

Superiors goods

Differential goods

When the marginal physical product of labor is 800 - 2N , the price of goods is Rs. 2, and the cost of labor is Rs. 4 per unit, the quantity of labor employed is.

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20 Units

800 Units

399 Units

80 units

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

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

An oligopolistic industry can be characterized by all of the following except

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May sellers

mutual interdependence

Economies of scale

A homogenous product

Which of the following groups is most hurt by unexpected inflation.

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Workers with cost of living adjustments in their labor contracts

Home owners

People with large debts to pay for their homes and cars

People with large retirement savings held in savings accounts.

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

The quantity of Y demanded increases by 6% when income changes, and income elasticity of demand is -0.9 income

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Decreased by 5.4 %

Decreases by 8%

Increased by 15%

Decreased by 6.7 %

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

A monopolist will discontinue production if

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Marginal revenue is less than marginal cost

Marginal revenue is less than average total cost

Marginal revenue is less the average fixed cost

Price is less than average variable cost

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

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

An indifference curve shows various combinations to goods Which gives the consumer.

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Equal level of utility

Low level of utility

High level of utility

None of these

An exceptional demand curve is.

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Vertical

Horizontal

Downward sloping

Positive slope

The "compensated" demand curve is the demand curve that.

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Shows only the income effect

Shows only the substitution effect

Shows both the income and substitution effects

Shows the Geffen good demand curve

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