Question # 1

The marginal rate of substitution of two goods can be obtain from

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Slope of budget line

Slope of demand curve

Slope of indifference curve

None of these

Which of the following is not a basic assumption of perfect competition.

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Free entry and exit

Many small sellers and buyers

Perfect information

Short run

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

A profit maximizing monopolist in two separate markets will

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Charge different price according to elasticity

Charged same price

Charged very high price

Charged very low price

Firm A's annual profit is.

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Rs.10,000

Rs.20,000

Rs.30,000

Rs.60,000

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.

In order to practice price discrimination which of the following is needed.

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Some degree of monopoly power

An ability to separate the market

An ability to prevent reselling

All of the above

Which of the following concepts represents the extra revenue a firm neceives from the services of an additional unit of a factor of production.

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Total revenue

Marginal physical product

Marginal revenues product

Marginal revenue

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

In monopolistic competition firm sell

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Same goods

Differential goods

Inferior goods

Superior goods

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 consumers spend 15 million a month on CDs, regardless of whether the prrice they pay goes up or down that implies that their price elasticity of demand for CDs is.

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0

1

Infinite

15

Marginal cost is the change is cost the result from a one unit increase in.

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Price

Cost

Output

Revenue

If the estimated values of Y and Py in 1987 are Rs. 30,000 and Rs. 8 respectively the marginal revenue of X is.

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260 - 160 x

420 - 4Qx

240 - 16 Px

80 - 4Qx

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

A firm's long run average total cost lineis

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Identical to its long run marginal cost line

Also its long run supply curve

In fact the average total cost curve of the optimal plant

Tangent to all the curve of short run average total cost

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

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

"Treating an individual as typical of a group" in the definition of.

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Pure discrimination human capital

Statistical discrimination

Human capital

Specific skills

the ouput where diminishing return to production begin is also the ouput where

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Marginal cost is at a minimum.

Average total cost is at a minimum

Average variable cost is at a minimum

Marginal and average

The income elasticity of inferior goods is

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Zero

Positive

Negative

Unitary

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