Question # 1

The downward kinked demand curve facing the individual oligopolistic implies that

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He face price certainlty

Competitors have a tendency to follow price decreases but not price increase

Total revenue remains same if a firm increases price

None of these

The classical are of the view that utility can be.

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Ranked

Counted

Expressed in numbers

Not counted

If the estimated values of Y and Py in 1987 are Rs. 20,000 and Rs. 6 respectively, what is the maximum price of X.

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Rs.420

Rs.240

Rs.300

Rs.360

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

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RSJK

JKL

THJ

RSJL

Company A estimates the price elasticity of demand for its products.3.0 The price of the product is Rs. 15. If MC = 2+40, the profit maximizing level of output.

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4 units

2 umits

5 units

3 units

MC = MR= AR=AC = Price shows the longs run

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Monopolist firm

Oligopolistic firm

Competitive firm

Both a and b

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 %

Indifference curve is alwyas.

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Vertical

Horizontal

Concave

Convex

An income demanded curve of an inferior good is.

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Same in slope

Upward is slope

Downward in slope

None of these

In capitalistic economy price is determined by

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Supply and production

Demand and production

Demand and consumption

Demand and supply

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 does not characterize monopolistic competition.

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Product differentiation

Many producers

Absence of advertising

Some control over price

If an increase in the price of gasoline increases the demand for gas hybrid cars, then

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Hybrid cars are an inferior good

Gasoline and hybrid cars are complements in consumption

Gasoline is an inferior good

Gasoline and hybrid cars are substitutes in consumption

A situation in which firms choose their best strategy given the strategies chosen by the other firms in the market is called.

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a competitive equilibrium

An open market solution

The Nash equilibrium

The cartel equilibrium

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

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Lowers total utility

Produces negative total utility

Lowers marginal utility and therefore total utility

Lowers marginal utility, but may raise total utility.

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

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

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Less elastic

Very high elastic

Elastic

Perfectly inelastic

If the government lower taxes by $10 billion, the Real GDP will rise by

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More than $10 billion

Less than $10 billion

Exactly $10 billion

None of these

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

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