Question # 1

If the monopolist maximizes profits when marginal revenue equals marginal cost equals average cost economic profits must be.

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Negative

Positive

Zero

Either a or c

If a monopolist faces a downward sloping market demand curve its.

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Average revenue is always less than marginal revenue

Marginal revenue is greeter than the price of the units it sells.

Average revenue is less than the price of its product.

Marginal revenue is always less than the price of the units it sells

As long as the principle of diminishing marginal utility is operating any increased consumption of good.

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Lowers total utility

Produces negative total utility

Lower marginal utility and therefore total utility

Lowers marginal utility, but may raise total utility.

In case of complimentary goods, if the price of one commodity falls there will be.

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Rise in demand of other commodity

Fall in demand of other commodity

Fall is demand of both commodities

Nor charge

The supply curve of a monopolist is always.

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More elastic

Less elastic

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Steeper

In a perfectly competitive market if firms are earning an economic profit the economic profit.

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Attracts entry by more firms, which lowers the market price

Can be earned both in the short run and long run

Is less than the normal profit

Leads to a decreases in market demand

Which skills are most likely to be paid for by the employer.

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General skills

Specific skills

Educational skills

None of these

In monopolistic competition firm sell

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Same goods

Differential goods

Inferior goods

Superior goods

In long run equilibrium a monopolistically competitive firm will find.

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Marginal cost below average total cost

Marginal cost wqual to minimum average total cost

Both a and b

Neither a nor b

If leisure is an inferior good the individuals supply curve for labor is.

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Back ward bending

Completely inelastic

Upward sloping

Perfectly elastic

The conditions necessary for a firm to be able to price discriminate include.

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Segment able markets

Difference in price elasticity of demand among the segments

The inability of customers to transfer products

All of the above

What is the per unit marginal cost of increasing production from 20 to 25 units.

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Rs. 3,500

Rs.100

Rs.4,000

Rs.500

The total utility of the third unit of product x is.

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10

5

23

38

Which of the following will not be a determinant of the price elasticity of demand for a commodity.

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The absence of substitute for the good.

The presence of substitutes for the good.

The importance of the commodity in consumers budgets

The cost of producing the commodity

Because a monopoly hires workers up to the point where their marginal revenue product equals the wage rate the monopoly will.

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Pay less than the going wage rate

Pay a wage equal to the value of the marginal product of labor

Pay less than the value of the marginal product of labor

Pay workers what they are worth to society

The market demand for a product is found by

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Horizontally summing the individual demand curves

Vertically summing the induvial demand curves

Both horizontally and vertically summing the individual demand curve.

None of the above

Indifference curve theory is old wine in new labeled bottle is said by.

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Marshall

Griffin

Ricardo

Allen

Suppose that the price elasticity of demand for maple syrup has been estimated at-2 if quantity demanded increased by 10 precent, price must have changed by.

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5 percent lower

5 percent higher

10 percent lower

10 percent higher

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

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

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Inelastic

Less elastic

More elastic

Undetermined

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