Question # 1

According to law of diminishing marginal utility, Utility of every new (Additional) unit of commodity

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Increases

Decreases

Remains constant

None of these

If demand is not influenced by the changes in price, elasticity of demand will be

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Equal to unity

More than unity

Less than unity

Zero

Demand curve of a monopolist has the shape

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Falls from left to right

Rises from left to right

Remains below MR curve

Remains parallel to ox-axis

Monetary theory of trade cycle was given by:

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Joseph Schumpeter

Habson Foster

Jevons

Hawtray

Expenditures of repair of machines are called

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Unproductive expenditures

Productive expenditures

Rewards

Depreciation allowance

Private owners of minerals are bound to pay --------- Zakat of their production

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10%

15%

20%

25%

Firms earn abnormal profit when:

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AR = AC

AR < AC

AR > AC

AC = AR

When marginal utility is zero, then total utility is

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Minimum

Positive

Maximum

Zero

In law of decreasing return, marginal product

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Increases

Decreases

Remains constant

Does not change

Inductive method represents:

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General to particular

Particular to general

Normative science

Economic planning

When supply increases due to rise price, it is called:

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Fall in supply

Contraction in supply

Expansion in supply

Rise in supply

During depression, a government prepares budget which is

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Balanced

Surplus

Deficit

Unbalanced

Relationship of value of money with quantity of money is

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Direct

Indirect

Inverse

Positive

Industry is in equilibrium under perfect competition in the long run, when every existing firm in the industry

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Is earning abnormal profit

Is earning normal profit

Is facing minimum loss

Is facing abnormal loss

The interaction of multiplier and accelerator is known as:

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Innovation theory

Modern theory

Psychological theory

Over investment theory

If supply curve is vertical (parallel to y-axis), then elasticity of supply is

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Zero

Infinite

Equal to unity

More than unity

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Principles of Economics Icom Part 1 English Medium Online Test MCQs With Answers

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