Question No: 1

Econometrics is

A modern name for economics

A specialized branch of economics which applies the tools of statistics to the economic
problems

A branch of economics which combines macroeconomic principles with welfare economics

None of the Above.

Question No: 2
Which of the following comes under the broad definition for factors of production?

Technology

Obsolete machinery

Innovations

None of the Above.

Question No: 3
Which of the following statements is true?

When the supply increases, both the price and the quantity will increase.

When the supply increases, the supply curve shifts towards the left

A shift in the supply curve towards the right results in a fall in the price

None of the Above.

Question No: 4
Which of the following statement(s) is/are false?

If the demand falls, the price will fall.

As the price rises the quantity demanded will fall.

If demand rises, the demand schedule shifts to the left.

None of above
Question No: 5
Which of the following statements is false?

An increase in tax will affect the customers more than the producers if the supply schedule is
inelastic.

An increase in tax will affect the customers more than the producers if the demand schedule is
inelastic.

An increase in tax will affect the customers less than the producers if the supply schedule is
inelastic.

None of above

Question No: 6
Which of the following statements is true?

Elasticity of demand is constant throughout the demand curve.

Elasticity of demand increases as one goes down the demand curve.

Elasticity of demand decreases as one goes down the demand curve.

None of the above

Question No: 7
For complementary goods, the cross elasticity of demand will be

Zero.

Infinity.

Positive, but less than infinity.

None of the above.

Question No: 8
When the income elasticity of demand for a good is negative, the good is

Normal good.

Luxury good.

Inferior good.

None of the above

Question No: 9
If both income and substitution-effects are strong, this region of the demand curve must be

Relatively price elastic.

Relatively price inelastic.

Unit-elastic

None of above
Question No: 10
If a good has close substitutes,

Its demand curve will be relatively elastic.

Its demand curve will be relatively inelastic.

Its demand curve could be unit-elastic.

None of above
Question No: 11
The demand for most products varies directly with the change in consumer income. Such
products are known as

Normal goods.

Prestigious goods.

Complementary goods.

None of the Above.

Question No: 12
Which of the following statements is true with regard to price elasticity of demand?

Elasticity remains constant throughout the demand curve.

Elasticity increases with increase in quantity demanded.

Elasticity increases as the price decreases.

None of the above.

Question No: 13
Which of the following goods can be considered substitutes?

Pen and Paper.

Car and Petrol.

Bread and Butter.

None of the above.

Question No: 14
Which of the following statements concerning indifference curves is true?

An indifference curve is the locus of points describing proportional price levels of the two
goods.

Indifference curves pre-suppose the measurement of total utility and marginal utility.

An indifference curve is the locus of points representing various combinations of two goods
about which the consumer is indifferent.

None of the above.

Question No: 15
If a change in all inputs leads to a proportional change in the output, it is a case of

Increasing returns to scale

Constant returns to scale.

Diminishing returns to scale.

None of the above.

Question No: 16
Isoquants are

Equal cost lines.

Equal product lines

Equal revenue lines.

None of the above.

Question No: 17
When average product is highest

Total product is maximum.

Marginal product is maximum.

Marginal product is zero.

None of the above

Question No: 18
If marginal product is negative, it means that the

Total product is at maximum

Average product is at maximum

Average product is falling

None of the above

Question No: 19
Which of the following curves is called envelope curve?

Long run total cost curve

Long run average total cost curve

Long run marginal cost curve

None of the above

Question No: 20
Which of the following costs remain constant as the output increases?

Marginal cost

Average variable cost

Average fixed cost

None of the above

Question No: 21
In perfect competition, a firm maximizing its profits will set its output at that level where

Average variable cost = price

Marginal cost = price

Fixed cost = price

None of the above

Question No: 22
Which of the following curves resembles supply curve under perfect competition in the short
run?

Average cost curve above break even point

Marginal cost curve above shut down point

Marginal utility curve

None of the Above.

Question No: 23
Which of the following is not a feature of perfect competition?

Large number of seller and buyers

No one is large enough to influence the market price

Homogeneous products

None of the above.

Question No: 24
In the long run, a perfectly competitive firm earns only normal profits because of

Product homogeneity

Large number of seller and buyer in the industry

Free entry and exit of industry

None of the Above.

Question No: 25
The horizontal demand curve for a firm is one of the characteristic features of

Oligopoly

Monopoly

Monopolistic competition

None of the Above.

Question No: 26
A perfectly competitive firm can increase its sales by

Reducing the price

Increasing the price

Increasing the production

None of the Above

Question No: 27
Which of the following is not a source of market imperfection?

Technology

Size of the firm

Product differentiation

None of the Above.

Question No: 28
The maximum profit condition for a monopoly firm is

Total cost should be minimum

Total revenue should be maximum

Marginal revenue is equal to marginal cost

None of the above

Question No: 29
Four-firm concentration refers to

The number of firms in an industry.

The four largest firm in four different and important industries in an economy.

The number of industries in an economy which have only four firms.

None of the above.

Question No: 30
Market inefficiencies can come from

Externalities

Monopolies

Imperfect information

None of the Above.

Question No: 31
A monopolist who faces a negatively sloped demand curve operates in the region where the
elasticity of demand is

Less than 1

Equal to 1

Greater than 1

None of the Above.

Question No: 32
In which of the following market structures the entry is least difficult?

Monopoly

oligopoly

regulated monopoly

None of the Above.

Question No: 33
Which of the follow is false in a monopolistic competition?

Many buyers and sellers

Identical products

Easy entry and exit

None of the Above.

Question No: 34
The term differentiated product denotes

Different products in similar packets

Different products

Same product used in different applications

None of the Above.

Question No: 35
Which of the following is common feature in both a monopolistic competitive market and
oligopoly market?

Product differentiation

Interdependence among member firms

Kinked demand curve

None of the Above.

Question No: 36
The term collusion refers to

A situation in which government sets prices with the market leader in oligopoly.

A situation in which government jointly sets prices with the small players in an industry in the
larger interest of the society

A situation in which all firms in an industry decide the price and output

None of the Above.

Question No: 37
Which of the following does not likely to lead to the failure collusive oligopoly?

Secret price cutting

More number of firms

Undifferentiated products

None of the Above.

Question No: 38
Price leadership refers to

Pre-emptive pricing made possible by the learning curve

A form of price collusion

The maintains of a monopolistic price

None of the above

Question No: 39
A cartel is

A group firms which get together and make joint price and output decisions to maximize joint
profits

Form of tacit collusion

Type of oligopoly in which curve is kinked

None of the above

Question No: 40
A zero-sum game is one in which

The gain of one player equals the loss of another player

The gain of one player will not equal the loss of another player

The maximin equals the minimax

None of the Above.