Professional Documents
Culture Documents
1.A firm will shut down its operations in the short run if
(a) P = MR = MC
(a) Increases its price and others follow it (b) Increases its price and others do not follow it
(c) Decreases its price and others follow it (d) Decreases its price and others do not follow it
5. The horizontal demand curve for a firm is one of the characteristic features of
(a) Oligopoly (b) Monopoly (c) Monopolistic competition
6. The difference between the price an individual is willing to pay and the price he or she actually pays is
(a) When the average product of labor is equal to marginal product of labor
9. Which of the following is true in the third stage of the three stages of production process?
(c) The marginal product curve lies below the average product curve
incurred by him
(c) Advertisement expenditure incurred by the firm towards promotion of its branded good, ‘Atoka’
(d) The firm’s owner has given up a job, where he was earning Rs.10,000 per month, to run the firm
11. The intersection of the marginal cost curve and the average cost curve characterizes the point of
(c) Minimum marginal cost (d) Minimum opportunity cost (e) Minimum profit
(c) The price, sellers ask for goods is less than the price consumers pay for those goods
(a) Downward sloping from left to right (b) Upward sloping from right to left
(e) Vertical.
(b) Marginal rate of technical substitution between labor (L) and capital (K) is decreasing
16. When a proportional change in input combination caused the same proportionate change in output,
19. Which of the following situation does not lead to Price discrimination?
(e) Produce an output where average revenue is greater than marginal cost.
22. Which of the following is not a predominant feature of the oligopolistic market?
(e) Some firms have a large share and can influence the price.
23. The cross price elasticity of demand for the products Reko and Veko is 8. It implies that Reko and
Veko are
24. Which of the following will most likely increase the demand for a particular good?
(a) Greater than one (b) Zero (c) Less than one
(a) Marginal revenue and marginal cost (b) Marginal revenue and average cost
(c) Total revenue and marginal revenue (d) Total revenue and average cost
(a) In a perfectly competitive market, an individual seller can influence the price
(b) In a monopolistically competitive market, no individual seller can influence the price
32. Which of the following is a benefit of first degree price discrimination by a monopolist?
(d) The decrease in government revenue that occurs when a tax rate is increased beyond its optimum
34. Hoping to increase wheat prices and the total revenues of wheat farmers, the government
encourages them to restrict their production, thereby reducing the supply of wheat. If the farmers
cooperate, then
(c) Wheat prices will rise, regardless of demand elasticity, but the revenues of wheat farmers will rise
(d) Wheat prices will rise, regardless of demand elasticity, but the revenues of wheat farmers will rise
35. Which of the following situations would necessarily lead to an increase in the price of apples?
(a) The wage paid to apple farm workers increases at the same time that medical researchers find that
eating apples reduces the chances of a person developing cancer
(b) While the wages of apple farm workers decrease drastically, the apple industry launches a highly
(c) A break through in technology enables apple farmers to use the same amount of resources as
(e) Weather during the growing seasons is ideal for apple production.
36. As its output increases, a firm’s short-run marginal cost will eventually increase because of
37. In which of the following conditions in equilibrium, a market will not be competitive?
38. Which of the following is most likely to be true in the long run, if a perfectly competitive industry is
in
equilibrium?
(a) Individual firms are not operating at the minimum points on their average total cost curves
(b) Some firms can be expected to leave the industry if they earn profit
(c) Firms are earning a return on investment that is equal to their opportunity costs
(d) Some factors are not receiving a return equal to their opportunity costs
(b) Government plays the pivotal role in the functioning of the economy
(d) Government exercises its power only in the important sectors while in the other sectors a free
40. Binica, a brand of toothpaste, which was declining in sales, decided to undertake advertising
expenses.
3. How utility ananlysis heps to understad the consumer behaviour and consumers equilibrium
5. What is price elastcity of demand? What are the factors influence price elasticity of demand
6. What is cross elastcity of demand? Explain with example for substitues and comlimentary
goods
8. Explain the law of supply with examlpe. What are the determinats of supply
10. What is demand forecasting? Explain the different methods of Demand forecasting