Question # 1

If the price of factor A is Rs.8.00 per hour, and its marginal product is 10 units, and the price of factor B is Rs. 5.00 and its marginal product is 9, is the producer is likely to.

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Hire more of A and less of B

Hire more of B and less of A

Start paying factor A more

Try to use factor B more productively

A drop in the price of compact disc shifts the demand curve for prerecord tapes leftward from that you know that compact discs and precorded tapes are.

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Inferior goods

Substitutes

Complements

Normal goods

If the price of an apple increases.

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Its opportunity cost decreases

Its opportunity cost increases

The substitution effect does not occur

The income effect does not occur

When the demand curve is vertical its shows that the demand is.

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Less elastic

Very high elastic

Elastic

Perfectly inelastic

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

A normal good can be defined as one which consumers purchase more of as.

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Price fall

Price rise

Income fall

Incomes increase

When Daimler Benz maker of the Mercedes bought Chrysler the merger was

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Horizontal

Vertical

Conglomerate

None of these

If A, B, C and D are any four market baskets, and if the consumer has ranked them so that D is preferred to C, A is hot preferred to B, and B is not preferred to c then.

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A is preferred to C

A is preferred to D

B is preferred to D

D is preferred to A

The negative slope of the demand curve indicates that there is _______ relationship between the price and the quantity demanded.

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A direct

An inverse

A positive

No relationship

Suppose taht an exise tax is imposed on the monopolist's product if the monopolist's marginal cost is horizontally the relevant range, which of the following statements must be true.

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The price will increase by an amount less than the tax

The price will increase by an amount equal to the tax

The price will increase by a amount greater than tax

The price may either increase or decrease

The demand for labor slopes down and to the right because of.

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The law of demand

The iron law of wages

The law of diminishing marginal returns

Economies of scale

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

Law of demand is not applicable on

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Daily goods

Scarce goods

Consumer goods

Producer goods

Ti access internet services consumers must use a computer if computer prices fall, what is the effect on the demand for internet services.

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The demand for internet services increases.

The demand for internet services decreases

The demand for internet services does not change

The demand for internet services could increase, decrese, or stay the same depending on other factors.

An exceptional demand curve is.

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Vertical

Horizontal

Downward sloping

Positive slope

The monopolization of the competitive market results in a deadweight loss to society of

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RSJK

JKL

THJ

RSJL

When economists say that a per son is economizing they mean that the person is.

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making choices to gain benefits at lowest possible cost

Making a lot of money

Purchasing goods that are generic cheap or of low quality

Learning how to run a business more effecitively

In perfect competition the industry will be in equilibrium.

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when all the firms earning abnormal profit

When all the firms earning normal profit

All firms having loss

All firms having proft

If a simultaneous and equal percentage decrease in the use of all physical inputs leads to a larger percentage decrease in physical output a firm's production function is said to exhibit.

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Decreasing returns to scale

Constant returns to scale

Increasing returns to scale

Diseconomies of scale

The income elasticity of demand

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Is negative for normal goods

Is positive for normal goods

Equals the relative change in demand for a good divided by the relative change in the iincome of consumers all else being equal

Is correctly described by all of the above

The demand for labor will be more elastic if

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There are few substitutes for labor

There is a shor time under consideration

Labor is a large percent of the total cost of production

The demand for the product is relatively inelastic

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