Question # 1

In the long run a profit maximizing monopoly produces an output volume that

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Equates long run marginal cost with marginal revenue

Equates long run average revenue

Assures permanent positive profit

Is correctly described by both a and c

Economics is the study of.

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All business, including how they operate why the exist and how they afect

Decisions that people must make because goods and services are limited.

How to save money, spend money invest savings, and balance a checkbook

The stock market the bond market and investment strategies

Big business and its impact on our live

In monopsony there is

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Single seller

Two buyers

Single buyer

Few buyer

In perfect price discrimination

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Consumer surplus is maximized

Produce surplus is zero

Community surplus is maximized

Consumer surplus is zero

The difference between what consumers have to pay for a particular and what they are willing to pay is known as.

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Consumer surplus

Producer surplus

Dead weight costs

Dead weight surplus

A decrease in autonomous consumer expenditure causes the equilibrium level of aggregate output to __________ at any given interest rate and shifts the ___ curve to the __________

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rise ; LM ;right

rise ; IS ; right

Fall ; LM ; left

rise ;IS; Left

In the Keynesian model which curve is vertical.

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LRAS

SRAS

AD

NS

__________ is a said to exist when the formation of a regional trading group leads to the reduction of trade with nonmember countries infavor of member countries.

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Trade creation

Trade diversion

Trade exclusion

Trade distortion

According to factor price equalization theorem the ______ factor should oppose free trade policies in any given country.

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Abundant

Scarce

Neither

Can't tell without more information

Which of the policies in the table above an increase in social welfare according to pareto efficiency.

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Policy A

Polies A and B

Policies A and D

Policies C a, -d D

That the division of labor a limited by the size of the market best applies to which explanation of trade

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Factor endowment theory

Product life cycle theory

Economies of scale theory

Over lapping demand theory.

The regression equation for consumption as a function of disposable income is C = -60 + 0.90Y .the standard error of Y is 30 and the standard error of estimate is 9.5 What is the 95% confidence interval for C when Y is Rs. 1000 billion.

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Rs.941 to Rs. 979

Rs.900 to Rs. 1,020

Rs.821 to Rs.859

Rs.780 to Rs.900

The relationship between the exchange rate ad the prices of tradable goods is known as the.

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Purchasing power parity theory

Asset markets theory

Monetary theory

Balance of payments theory

the Maastricht criteria for entry to the EMU are that applicants should have

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Low inflation

Low interest rates

Stable nominal exchange rate

All of the above

R.M. Solow in his model assumes that the prices and wages are.

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Flexible

Non flexible

Rigid

None of these

The single European Act committed_ governments to a ___ in 1992

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European union, single market

Western European, single currency area

European union, single currency area

Western European, single market

In the Keynesian model in the long run a decrease in the money supply will cause ___ in the interest rate and _____ in the price level.

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An increase ; an increase

A decrease ; a decrees

No change ; an increase

No change ; a decrease

What does ceteris paribus mean.

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"Scientific method"

"Rational thinking"

"Other things remaining the same"

"There is no such thing as a free lunc"

A depreciation of the dollar will have its most pronounced impact on imports if the demand for. Imports is.

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Constant

Inelastic

Elastic

Unitary elastic

An economy may operate outside the production possibility frontier it.

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It is not utilizing its resources fully

It is being productively efficient

It is a maxed economy

It is trading with other economics

Which exchange rate system does not require monetary reserves for official exchange rate intervention.

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Floating exchange rates

Pegged exchange rates

Managed floating exchange rates

Dual exchange rates

A fall in investment demand can result from

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Higher interest rates

Lower expected future profits

More expensive capital goods

All of the above

A change in the full employment quantity of labor_________ the short run aggregate supply curve and ______ the long run aggregate supply curve.

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shifts ; shifts

shifts ; does not shift

does not shift ; shift

does not shift ; does not shift

Economists use the term marginal utility to mean.

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Additional satisfaction gained divided by additional cost of the last unit.

Additional satisfaction gained by the consumption of one more unit of a good

Total satisfaction gained when consuming a given number of units.

The process of comparing marginal units of all goods which could be purchased

The short run marginal cost curve cuts the short run total cost curve and short run average variable cost curve.

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At their lowest points

When they are declining

When they are increasing.

When marginal revenue is zero

Firms are assumed to ____ costs and to _______ profit.

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Incur , desire

Pay ; make

Change ;earn

Minimize ; maximize

Given a proportional income tax and a government budget that is currently in balance, an increase in autonomous investment , caters parabasal increases equilibrium income and the budget.

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Romaic's in balnce

Has a surplus

Has a deficit

None of these

What is embodies sampling.

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Haphazard selection

Numbers

Definite rules

Accuracy

The theory of Ruler -urben migraines presented by.

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W.W. Roslow

M.P.Todaro

Simon Kuznets

Nukse

A significant increase in the government budget deficit is likely to.

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Reduce injections into the economy

Reduce national income

Move the economy away from full employment

Boost aggregate demand

If an increase in investment leads to a bigger increase in national income this is called the.

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Accelerator

Aggregate demand

Monetarism

Multiplier

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