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SECTION A:
MULTIPLE CHOICE:
ANSWER: 1
1. D.
2. A.
3. C
4. B
5. A
6. B
7. B &D.
8. A
9. B
10. D
11. C
12. C
13. A
14. D
15. D
16. B
17. A
18. B
19. C
20. D
SECTION B
ANSWER NO: 2
The situation one is about equilibrium, quantity demand and quantity supply as we
know that the Rs: 5 is equilibrium price therefore the 300 units is similar to the
quantity of supply. In the situation two we identify actual price towards
equilibrium so there is a situation it will identify the result of surplus in the market
the person who produce goods lower the price s in situation three we have the table
market reaches that demand of production faces the shortage of Goods.
ANSWER NO: 3
In this question there is a situation of 2 goods a or b the demand of good start
increase in good b. Both goods are at substitute level so the good one is also use if
good b is not available In situation b the price of Good A remain same but the price
of Good B is change continuously due to the income the demand start increase so
the demand of good A become 5% The situation C is about normal good income is
5% according to the concept of ceterid paribus the 5% increase and 1% increase
whereas the other factor remain same so the condition is that DC=f (YC)
ANSWER:4
The scale of economic average total cost is 10000 from 12000 employees have a
same rate of percentage. The ATC remain same. The long run increases the ATC.
This situation is happens in when enterprise face the problem in controlling
difficulties which are arises.
ANSWER: 5
‘’This law is about consumption as much as the using of more agriculture product
which is also called commodity. The utility is considered with the diminishing rate.
In simple words, when the consumption quantity starting to increase the total
utility is also start to increasing slowly’’
2. In one first line the total utility is provided and in second line marginal utility is
given. When the total utility increases the MU is starting fall down but increases
as well.
The total utility at starting point decreases but when the mu start to become
negative in the second last stage the total utility is constant which is 52 but the end
it start decreasing. And become 50.
ANSWER: 8
ANSWER: 7
PART A
PART B
Loss
PART C
PART D
Short run – where one factor of production (e.g. capital) is fixed. This is a time
period of fewer than four-six months.
Long run – where all factors of production of a firm are variable (e.g. a firm can
build a bigger factory) A time period of greater than four-six months/one year
Long run become loss.
PART E
P greater than AVC firm will shut down.
3.07 firms shut down.
It is the min of AVC
ANSWER: 6
A. There are two cases perfect competition and monopoly . monopoly function are
price taker on the other hand perfect competition are not realistic. Basically it is
hypothetical situation in which the target is efficient value of equilibrium.
C. The limit of profit maximization is ATC And the value P IS Become highest.
D. MR=MC