Question # 1

When a tax is levied on a good.

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The market price falls because demand declines.

The market price falls because supply falls.

A wedge is placed between the price buyers pay and the price sellers receive

The market price rises because demand falls.

The largest source of tax revenue for the federal government is

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The prerenal income tax

The social security tax

the property tax

The sales tax

Skills that embodied in a person are called.

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Human capital

Embodied skills

Physical capital

Experience skills

If the prices of both goods increase by the same percent the budget line will

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Shift parallel to the left

shift parallel to the right

Pivot about the x axis

Pivot abut the Y axis

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

One of the following has more elastic demand.

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A commodity with substitutes

A commodity having more than one use

A commodity commonly use

None of these

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

Which of the following statements abut the relationship between marginal cost and average cost is correct.

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When MC is falling AC is falling

AC equals MC and MC'S lowest point

When MC exceeds Ac, Ac must be rising

When Ac exceed MC, MC must be rising

In substitution effect a consumer

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Shifts away from the commodity which price has risen

shifts in favor of commodity which price has risen

shifts away from the commodity which price has fallen

None of these

In the neighborhood of the long run equilibrium of a monopolistically competitive firm average cost will be.

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Decreasing

Constant

Increasing

At a minimum

A long-run total cost curve can be constructed from

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An income consumption curve

A price consumption curve

Isoquant is cost expansion path diagram

An Engel curve

Naveed purchases product M for which his income elasticity of demand is negative Apparently product M is.

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A necessity

An independent good

An inferior good

A luxury good

A consumer is said to be in equilibrium when the marginla utility and price of a commodity

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More

Less

Irrelevant

Equal

An increase in price causes an increase in total revenue when.

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Demand is elastic

Demand is inelastic

Demand is unit elastic

All of the above are possible

For commodities, X and Y, the possibilities are X is preferred to Y , Y is preferred to X or X and Y are equally preferred, In indifference curve analysis, this is known as the.

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Comparability assumption

Transitivity assumption

Non seriation assumption

Reflexivity assumption

Which of the following is correct with respect to the Paasche index.

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The consumer Price index is an example of the Paasche index.

The Paasche index is biased upward

The Passche index always exceeds 1

The Paasche index uses given period quantities

The demand for labor is the same as the

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Marginal revenue product

Marginal physical product

Marginal cost

Wage

In an industry with a falling long term supply curve, which of the following is true.

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Industry unit cost are constant

Industry unit costs are decreasing

Industry unit costs are increasing

Industry unit costs cannot be determined

If Supply and demand both decrease simultaneously. Which of the following will happen.

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Price will rise

Quantity sold will rise

Price will fall

Quantity sold will decrease

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

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

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