Eco Final PDF

CASE STUDY ANSWERS :
1) LOSSES TO BOTH THE FIRMS

2) QUALITY OF NEWS
3) OLIGOPOLY
4) READERS OF BOTH THE NEWSPAPERS
1) If the Indian economy is operating at less than the potential GDP, an increase in the money
supply in the short run will lead to - Supply Side Inflation
2) Which one of the following is true about the MC curve? - 1� It intersects both the ATC and
the AFC curves at their minimums.
3) The demand curve faced by a perfectly competitive firm - perfectly elastic
4) The circular flow of income shows the relationship between - government, firms,
households and foreign sector
5) Which real-world market most closely approximates perfect competition? – The stock
Market
6) In the context of national income accounting depreciation ? -is the loss of value of Capital
assets.
7) The demand curve facing a monopolist - lies below its marginal revenue curve
8) The income effect refers to the impact of a change in - the price of a good on real income
9) Suppose it costs Minnie's Mini-Golf (a monopolist) not a paise more to let another person on
the course. If Minnie's faces a linear (downward-sloping} market demand curve, it will
maximize profit by choosing the point on the demand curve at which - �: marginal revenue
is greatest
10) Which one of the following actions will not increase GDP? Bears prowl suburban areas,
overturning garbage cans so the city hires more sanitation workers to clean up
11) The GDP price index is the ratio of -----nominal GDP to real GDP multiplied by 100.
12) Macroeconomics deals with: economic aggregates
13) Which of the following is unique to oligopoly among all the market structures? mutual
interdependence
14) Because resources are scarce - people must make choices among alternatives
15) A US company owns a fast-food store in India. The value of the goods and services produced
in the store are included - In the GDP of India but not of US
16) Suppose you received a 3 percent increase in your nominal wage. Over the year, inflation
ran about 6 percent. Which of the following is true? - Your real wage fell.
17) If the cross elasticity of demand between product 'X' and product 'Y' is negative then - X and
Y are complementary goods.
18) If the cross elasticity of demand between product 'X' and product 'Y' is positive then - X and
Y are substitute goods.
19) Which one of the following is a constani elasticity supply curve? All of these
20) If the low GDP growth rate of India is attributed to the country's monetary policy then we
should observe that the country's money supply - had increased and interest rates had
decreased.
21) Which of the following is true regarding Gross Domestic Product? It can be measured either
from total spending or total expenditure.
22) The Income effect of an increase in the price of potatoes (an inferior good) is a(n) - decrease
in the quantity demanded of potatoes
23) If the price of Pepsi-Cola increases from Rs. 5 to Rs. 6 per can and the quantity demanded
decreases from 100 cans to 50 cans, then the demand for Pepsi-Cola is - more elastic
24) Other things remaining constant quantity demanded of money varies - inversely with the
market interest rate.
25) Which one of the following statement about the market is not true? -All markets provide
the same amounts of information.
26) A cartel's marginal cost curve is the - horizontal sum of all the individual firms' marginal
cost curves
27) The marginal cost curve intersects the average total cost curve (ATC) - at the AT C's
minimum point
28) The reason economists assume that firms try to maximize economic profit is - Over time,
firms that don't earn profits will have difficulty securing financing to survive
29) The demand for products from monopolistic competition is elastic due to: Large number of
buyers
30) Transfer payments are - not included in GDP because they do not represent payments for
currently produced goods or services
31) Which of the following statement regarding the basic economic problem of scarcity is
correct? The problem will exist as long as resources are available in limited amounts.
32) Movements along the demand curve are called changes in – Quantity demanded
33) Inputs that can be increased or decreased in the short run are called – Variable Inputs
34) In the context of circular flow of income and expenditure which of the following statements
is not correct? - Firms sell factors of production to households
35) If total revenue on a good falls with fall in price, this indicates - the price elasticity of
demand is less than one
36) If the demand for swordfish is price elastic and the price of swordfish increases, then - the
total revenue from swordfish sales will decrease
37) Statement A: Firms in monopolistic competition are not producing at minimum average cost.
Statement B: Frrms in monopolistic competition have excess capacity - Both statement A
and statement B are true
38) Which of the following could be true of perfect competition but not of monopoly? There are
no barriers to entry.
39) If Marginal Propensity to Save (MPS) is 0.2 and the government purchases decrease by Rs.
5,000, real GDP demanded will - Increase by Rs. 25,000
40) If a monopolistically competitive firm raises its price, it - loses some, but not all, of its
customers
41) The steeper the short-run aggregate supply curve - the impact a shift of the aggregate
demand curve will be less on real GDP and more on the price level.
42) Along a demand curve real income is assumed to be constant. – Always false
43) A monopolistic competitive firm can raise price somewhat due to - product differentiation
44) If a perfectly competitive firm's marginal revenue is Rs.35, - its average revenue is Rs. 35
45) Suppose sales of Maruti Brezza increases with an increase in the price of Hyundai Venue.
Which one of the following options best explains the situation? The substitution effect
46) An intersection point known as Four Corners lies 300 km from the nearest town. At this
intersection poini, there are three independently owned petrol stations and one small
pharmacy. Which of the following is true? The gas stations are oligopolists; the pharmacy is
a monopolist.
47) Transaction of financial assets (shares, stocks etc) cause – Do not affect the national income
48) In double-entry GDP accounting - the value of output produced must equal the value of
resource payments generated introducing that output
1) When diminishing marginal returns set in the marginal product is - positive and decreasing
(as per quizlet ) - ? negative and increasing
49) If the Marginal Propensity to Consume (MPC) is 0.75, a decrease in net ta�es of Rs. 100
billion will increase the equilibrium level of real GDP by – Rs 400 billion
50) (a) Economic information is usually scarce and costly to acquire (b) Economic information is
usually not required for rational decision making. - Statement (a) is true but statement (b) is
false.
51) All of the following are true of a perfectly competitive firm in long-run equilibrium except
one. Which is the exception? Marginal cost is minimized.
52) Which of the following is most likely produced in a monopolistically competitive market?
Detergents
53) Anticipated inflation - causes fewer problems than unanticipated inflation
54) Which of the following actions would not increase GDP? Tom gets fired for being late so
often after his alarm clock breaks, so he moves off to the wilderness.
55) The base year for a price index is the year - that serves as a reference point
56) The effect of a change in net taxes on the quantity of real GDP demanded equals the
resulting shift in the consumption function times - the simple spending multiplier
57) The effect of a change in net taxes on the quantity of real GDP demanded equals the
resulting shift in the consumption function times - the simple spending multiplier
58) For perfectly competitive firms, the relationship between the market price (P), average
revenue (AR), and marginal revenue (MR) will be = P = AR = MR
59) The law of demand states that - price and quantity demanded are inversely related , other
factors taken as constant
60) Which of the following would an economist consider as capital?
61) For an equilibrium interest rate of 5%, an increase in the money supply other factors taken
constant will most likely – decrease the interest rate by 5%
62) Which if the following is most likely to be a fixed resource for the Speedy Word Processing &
Resume Company? - Computer terminals
63) For a renter, the income effect of an increase in apartment rents will: have a greater impact
than the income effect of an increase in the price of a detergent
64) If the IMT administration raises the tution fees of our students …… - a) not be successful if
the demand curve slopes downward.
65) The demand curve a monopolists faces : - is as elastic as a perfectly competitive firms
demad curve
66) fiscal policy refers to the regulation of : - spending and taxing policies used by government
to influence the economy
67) In the range of increasing marginal returns, total product is _____. increasing at an
increasing rate
68) Two heavy equipment manufacturers might collude in an effort to do all of the following
except one. Which is the exception? --- Take advantage of the legal benefits that U.S.
cartels receive
69) in economics, the term capital refers to – machines, buildings, tools and knowledge
70) Which of the following is not considered a barrier to entry? diseconomies of scale
71) Which real-world market most closely approximates perfect competition? - wholesale
wheat market,.
72) in times of rapid inflation, - Money loses its use and acts as medium of exchange
73) The golden rule of profit maximization says that a profit maximizing firm produces - where
marginal revenue equals marginal cost, provided marginal cost cuts marginalrevenue from
below
74) A monopolist : - is constrained by demand in setting price
75) Resources are divided into the following broad categories : - Natural resources, labor,
capital, and entrepreneurial ability
76) The four components of GDP as per expenditure approach are – Investment, Government
purchases, consumption and net exports
77) Statement A: an increase in the price of pizza, other things constant, increases the
opportunity cost of pizza.
Statement B: Because of higher opportunity cost of pizza consumers will reduce demand
for other goods and increase the quantity demanded of pizza --- > Statement A is
correct but statement B is not correct.
78.The demand curve facing Imelda's Shoe Boutique, a monopolistically competitive firm - slopes
downward because Imelda's sells a differentiated product
79. A decrease in interest rate will: Increase the quantity of money people want to hold
80. The additional output obtained by adding another unit of labor to the production process is
called - Marginal product
81. if rice is a normal good then the income effect of a price change means – As income increases,
the demand curve for the rice shifts rightward
82. Which of the following is likely to have the highest price elasticity of demand? – Mobile phones
83. Which of the following statements about price elasticity of demand is not true? - Higher the
proportion of consumer budget on the good, lower the value of price elasticity.
84. If a firm is experiencing diminishing marginal returns to labor, which of the following must be
true?- the firm is experiencing decreasing returns to scale
85. for a monopolist, marginal revenue is – less than price
86. Macroeconomics deals with: economic aggregates.
87. Which of the following is not assumed to be constant along the money demand curve? The
interest rate
88. An increase in a person's real wage necessarily means - greater purchasing power
89. The defining characteristic of oligopoly is that each firm : - is mutually interdependent
90. If the inflation rate is 5 percent and you receive a wage increase of 5 percent - Your nominal
income increases by 5 percent but your real income is unchanged
91. Demand-pull inflation is caused/shown by an--- outward shift of the aggregate demand curve
92. As the indian economy will near full capacity, the short-run aggregate supply curve – Becomes
steeper
93. Automatic stabilisers act to __________ government expenditures and __________ government
revenues during recessions ---- > increase; decrease
94. Monopolistic competition is best described as. - - > many firms with some control over price,
and some product differentiation
95. the difference between discretionary fiscal policy and automatic stabilizer is that - > automatic
stabilizers once adopted are built into the structure of the economy.
96. Markets reduce transactions costs : - by decreasing the time spent searching for information
about goods and services.
97. If Family Travel Agency, a monopolistic competitor, offers services that are differentiated from
the services of other producers in the industry, it - has some power to control the price it charges
98. If variable cost at each output level doubles - MC remains unchanged
99. A cartel's profit-maximizing quantity occurs where the cartel's ---> Marginal cost equals
marginal revenue
100. Anticipated inflation - causes fewer problems than unanticipated inflation
101. If MPC is 0.8 and the government purchases increase by $5,000, real GDP demanded will --- >
Increase by $25,000
102. if the Indian economy is already producing at its potential the spending multiplier in the long
run is – Zero
103. The Equilibrium Interest Rate Is Determined By -- Both The Demand For And The Supply Of
Money.
104. If the GDP price index is 150 and nominal GDP is Rs.9,000 billion, then real GDP is - ---- >>>
Rs. 6,000 billion.
105. In the circular flow of income and expenditure ---- ?>>> Injections are equal to leakages
106. The immediate effect on GDP of Ibrahim's purchase of a government bond is -- nonexistent,
since no real goods and services have been produced
107. What do monopolistic competition, pure monopoly, and perfect competition have in
common? the rule of profit maximization
108. Total fixed cost divided by the level of output yields ??? ----- > Average fixed cost
109. For a non price discrimate monopolist, economic profit is maximized in the short run at a price
of Rs 140. Marginal revenue at that output level is: ---- >>> less than Rs 140
110. If there is a decrease in the supply of money, which one of the following is most likely to
happen? - ---- >>> interest rates will rise
111. Which of the following best illustrates the use of discretionary fiscal policy?
112. If the price of coca cola increases from Rs 5 to Rs 6 then the demand for coca cola will decrease
from 100 to 90 cans , then the demand for Pepsi Cola is - --- > more elastic
113. If a monopolistically competitive firm raises its price, it - loses some, but not all, of its
customers
114. A monopolistically competitive firm can raise price somewhat due to -- ->> Product
differentiation
115. Account profit is -->>>less than economic profit only when implicit costs are greater than
explicit costs.
Question Ans:
------------ is also known as Envelope Curve Long run average cost curve
(a) Economic information is usually scarce and costly to
acquire (b) Economic information is usually not required for
rational decision making. Statement (a) is true but statement (b) is false.
A change in price keeping other things remaining constant will
cause movement in the demand curve
A change in the quantity demanded of Product X is due to a
change in change in the price of the product X
A characteristic of monopolistic competition is: Differentiated products.
A circular-flow diagram is used to describe The flow of income and expenditures in an economy.
A decrease in interest rate will: Increase the quantity of money people want to hold
A fall in prices makes consumers feel more wealthy. As a
result there is a movement down a given aggregate demand curve.
A firm economic profit is equal to revenue less total opportunity costs.
A firm practising price discrimination will be Charging different prices in different markets of a product
A floating exchange rate adjusts in response to market forces
A market structure with a few firms is known as oligopoly.
As demand changes, each output level can be consistent with
A monopolist has no supply curve because: more than one profit-maximizing price
A monopolistic competitor earns --------------- in the long run Zero Economic profit
A movement in demand is due to change in the price of the product
the value of its imports of goods is greater than the value of
A nation has an unfavorable balance of trade when its exports of goods
A nation's merchandise trade balance reflects trade in tangible products
price taker and hence cannot determine price but can
A perfectly competitive firm is determine the amount of output to be sold.
A perfectly competitive firm would shut down if: AVC>AR
A person finds Rs.2000 on the street. If he decides to use the
money to go to an IPL match, his opportunity cost of going to Rs.2000 as he could have used the money to buy other things
the game is plus the value of his time spent at the game.
A phenomena of stagflation is due to fall in real GDP and price increase
A purely competitive firm will be willing to produce at a loss in
the short run provided the loss is no greater than its average variable coss
A rational person who currently subscribes two magazines is The additional cost of the third magazine compared to the
trying to decide whether he should subscribe to a third. What additional benefit the person would get from the third
should determine his decision? magazine.
A shift in demand is NOT due to change in the price of the product
A shift in supply is due to all of the above
A situation under which economic stagnation in the form of a
low rate of growth, combines with the rise in the general price
level is called: Stagflation
A situation when prices increase at a very rapid speed so that
the value of money falls drastically is called as Hyperinflation
A typical demand curve can not be rising upward to right
A unique feature of oligopoly is interdependence between the few firms
According to comparative advantage theory international
trade will not take place between two countries if All of the above
Total utility will rise at a falling rate as more units are
According to the law of diminishing marginal utility: consumed
Aggregate demand is the total demand for final goods and
services in an economy at a given time. Changes in aggregate
demand may take place because of changes in money supply
as well as because of changes in government expenditure
among other factors. Thepurpose of both ï¬ scal and Change in quantity of money Ã change in rate of interest
monetary policy is to control aggregate demand. At times, too Ã change in investment Ã change in aggregate demand Ã
high growth in aggregate demand can lead to inflation while change in price level
Unrestricted
fall in aggregate demand can result in a recession and rising
unemployment. Fiscal policy seeks to regulate aggregate
demand by two instruments primarily govt. expenditure and
taxation while monetary policy seeks to control the by directly
controlling the money supply or by altering the rate of
interest.A fall in interest rates encourages more borrowing
and raises aggregate demand while a rise in interest rates will
dampen aggregate demand.Question €“ 4Changes in money
supply leads to change in aggregate demand, whichin turn can
give rise to inflation. Identify the right sequences in which
changes in money supply leads to changes in price level
All of the following are variables that can be manipulated to
affect fiscal policy except one. Which one is that? The interest rate
All the following are U-shaped curves except: AFC curve
Along a demand curve real income is assumed to be constant. always false
An individual demand curve slopes downwards from left to
right because: All of the above
An individual seller in perfect competition will not lower price
because he can sell any amount at the market price
An isoquant is a locus of factor input combinations that give the same level of output
As the economy nears full capacity, the short-run aggregate
supply curve becomes steeper.
Assume that the market demand curve for soft drink is known
and given to us. With the onset of summer, price remaining
the same, the consumer would move to a higher demand curve
At any given price level which of the following is not going to
increase real GDP demanded an increase in net taxes
Automatic stabilisers act to __________ government
expenditures and __________ government revenues during
recessions. increase; decrease
Average cost increases in the long run with an expansion in
firm size due to all of the above
Balance of payment is an application of Double entry book keeping
C + I + G + (X-M) refers to aggregate expenditure
Choose the correct one -1
Consumer surplus is measured graphically as the area below the demand curve and above price.
Consumption in the expenditures approach in calculating GDP
includes: Purchases of medical services at a local clinic
Consumption under expenditure approach for calculation of
GDP will include spending by households on medical services at a local hospital
Convexity of the iso-quant curves is because of: Decreasing marginal rate of technical substitution
CPI is useful in all of the above
Demand Curve faced by a monopoly firm is inelastic
The correct option is "To the customers and also save on
Demand curve of a perfectly competitive industry is supply costs"Score:- 2
Demand for a commodity refers to: Amount of the commodity demanded at a particular price
Demand-pull inflation is caused by an outward shift of the aggregate demand curve
Difference between the short run and long run is based on flexibility of fixed input
Discriminating monopoly implies that the monopolist charges
different prices for his commodity: All of the above
Economics is a study all of the above
Economics is a study of limited resources and unlimited wants
Economics is the study of how society manages its scarce resources.
percentage change in output due to percentage change in
Elasticity of production is variable input.
Equilibrium price is the market clearing price
Expilcit cost refers to the cost of factors hired by a firm for production
Unrestricted
Firms under perfect competition in the short run can earn
only All of these
Fiscal policy in India is prepared by Ministry of Finance.
Fiscal policy is used to influence macroeconomic variables like all of the above
Fiscal policy means: Policy relating to public revenue and public expenditure
For a downward sloping linear demand curve the slope of
marginal revenue (MR) curve is twice as much as the slope of the average revenue (AR) curve
For a given price level aggregate demand curve shifts if there
is change in (a) government expenditure (b) investment
expenditure Both (a) and (b)
For a rectangular hyperbola demand curve elasticity of demand is equal to one
For calculation of GDP of India which of the following is NOT
included production done by NTPC in Iran
For indexing the dearness alloowance to employees for an
increase in price level ---------- is useful. CPI-IW
For short-term policy decisions -------- is more useful. WPI
GDP is a poor measure of social well-being because the value of leisure time is not counted in GDP
GDP is a poor measure of the social well being because: The value of leisure time is not counted in GDP
Treats the money spent on guns the same as the money spent
GDP is not a perfect measure of welfare because it: on education
Given the budget and the price of factor inputs isocost line all combinations of labour and capital that will cost the
represents producer the same amount of money.
Given the same cost and revenue schedules, a profit-
maximising monopolist will produce less output than a competitive industry
Government purchases are assumed to be autonomous
because they are independent of the level of real GDP
Measuring the impact of production on air pollution, water
pollution, soil depletion, and the loss of other natural
Green GDP means resources.
Households act as demanders when they demand goods and services from firms and the government
Households act as suppliers when they provide resources to firms and governments
the consumer will increase his consumption of X and decrease
If (MUx / Px) > (MUy / Py) then his consumption of Y.
If a firm average cost curve is falling, than marginal cost curve
must be: Below average cost curve
If a resource that has no alternative use than its opportunity
cost is zero
If an increase in the price of product €˜X€™ shifts the demand
for product €˜Y€™ rightward and, conversely, if a decrease in
the price of €˜X€™ shifts demand for €˜Y€™ leftward then X and Y are substitute products
If GDP is greater than GNP of a country, then its: Net factor income earned from abroad is negative
If good is a luxury, its income elasticity of demand would be: Positive and greater than one
If marginal benefit is greater than marginal cost, a rational
choice involves: more of the activity
If marginal utility is zero: Total utility is maximized
If MPC is 0.8 and the government purchases increase by
$5,000, real GDP demanded will Increase by $25,000
If the cross elasticity of demand between product €˜X€™ and
product €˜Y€™ is positive then X and Y are substitute goods.
If the demand for a good is inelastic, an increase in its price
will cause the total expenditure of the consumers of the good
to: Increase
if the economy is already producing its potential, the spending
multiplier in the long run is Zero
If the income elasticity of a good is greater than one but less
than zero then a) it is a normal good. b) it is a necessary good.
c) it is an inferior good. Both (a) and (b) are right.
Unrestricted
If the MU from consuming two goods are equal and the
consumer is spending all of his or her money income, The
consumer is in equilibrium. False.
If the prevailing price in the market is more than the average
variable cost (AVC) of production, the firm would: Continue production
If the quantity of money demanded is less than the quantity
of money supplied, then the interest rate will decrease.
If the short run aggregate supply curve has a positive slope,
effective fiscal policy to correct for an expansionary gap will: Reduce both the price level and real GDP
If the short-run aggregate supply curve has a positive slope,
effective fiscal policy to correct for an expansionary gap will reduce both the price level and real GDP
If the the government wants to close a contractionary gap
using fiscal policy, then it can decrease taxes by less than the size of the gap
If total revenue on a good falls with fall in price, this indicates the price elasticity of demand is less than one
If transfer payments and autonomous taxes both increase by
identical amounts: There will be no change in the equilibrium income
Implicit cost refers to the cost of factors owned by the producer and used for production
Implicit costs are calculated on the basis of: Opportunity cost
In a perfectly competitive market , a firm in the long run will
be in equilibrium when: P = AR=MR=AC=MC
each country's consumption possibilities are the same as its
In autarky production possibilities
In case of the dominant-strategy solution each firm ignores the decisions of the other firms
In determining comparative advantage, cost is measured in
terms of opportunities forgone
In economics market refers to Both option 1 and option 2
In macroeconomics, we analyze the overall performance of the economy as a whole
In monopoly market, AR curve is always ------------- the MR
curve. Above
In New Zealand one worker can produce 40 walking sticks or
10 boomerangs each hour. What is the opportunity cost of
producing one walking stick? 1/4 of a boomerang
Large number of sellers means every seller is selling a small
In perfect competition there is large number of sellers. amount in relative sense.
In the circular flow of income and expenditure Injections are equal to leakages
In the context of circular flow of income and expenditure
which of the following statements is not correct? Firms sell factors of production to households
In the context of national income accounting depreciation is the loss of value of Capital assets.
In the long run analysis the efficient area of production is the area which is to the right of upper ridge line and to the
denoted by left of lower ridge line
In the long run if elasticity of production is greater than one
then the firm is experiencing increasing returns to scale
In the long run zero substitutability between the factor inputs
is a feature of Input output isoquant
In the price rigidity model of oligopoly market, when some
firms increase their price, why do the other firms not follow? Because of the elastic nature of the demand
In the short run , when the output of a firm increases, its
average fixed cost: decreases
In the short run as long as marginal product of labour
increases at an increasing rate total product increases at an increasing rate
In the short run as long as the marginal product exceeds the the average productivity of the variable factor increases as
average product, input increases.
In the short run perfectly competitive firm will shut down when average variable cost is more than average revenue.
In the third stage of the law of variable proportions, stage of
negative returns occurs when: Total product declines, MP is negative
Unrestricted
In which of the following industries do firms set prices? monopoly markets, but not competitive markets
Income elasticity of demand is defined as the responsiveness
of: Quantity demanded to a change in income
Increase in money supply leads to Demand Pull Inflation.
Increase in total utility as a result of the consumption of an
additional unit is known as Marginal Utility
Inflation in an economy including those sectors of the market
which may experience sudden inflationary spikes such as
energy is indicated by Headline Inflation
Inflation rate differs in different regions of a country MAINLY
due to difference in differece in housing prices
Inflation results in a decline in the --------- Purchasing power of money
Interest on borrowed capital falls in the category of: Production costs
International trade is most likely to occur whenever each of the trading nations gains from trade
Intersection of the market demand and supply curve of a good
helps in determination of all of the above
Investment under expenditure approach for calculaton of GDP spending by a business house on purchase of new plant and
will include machinery
Iso-Quants are right angled only when: Factors are compliments
production can be increased in the short run by employing
Law of dminishing marginal returns shows that variable input with fixed input
Macroeconomics deals with: economic aggregates.
Macroeconomics is the study of aggregate economic behaviour
Marginal costs are closely related with: Variable cost
Marginal reasoning is used in both accepting or rejecting a business proposition
Marginal utility curve of a consumer is also his demand curve
Markets of cement, alunimium and automobiles are examples
of oligopoly
by decreasing the time spent searching for information about
Markets reduce transactions costs goods and services
MC = MR and MR = AR means The equilibrium position of a firm under perfect competition
MC curve cuts --------- curves at their minimum points. AVC & AC
Microeconomics deals with the study of income of an individual
Mixed income of the self employed means: Combined factor payments which are not distinguishable
MR is equal to: The change in p x q due to a unit change in output
Multiplier is defined as 1/ 1-MPC
National Income denotes sum total of all factor earnings in the economy.
National Income of a country is also known as: NNP at Factor Cost.
Net value added is equal to: Payments accruing to factors of production
Nominal GDP is based on prices prevailing in the year when production takes place
Oligopoly can emerge due to all of the above
that which we forgo, or give up, when we make a choice or a
Opportunity cost is decision.
Opportunity cost refers to the cost of sacrificed alternatives
Other thing remaining constant, as a result of a decrease in
income, an individual's demand for inferior goods will rise
Other things being equal, a decrease in an economy exports decrease domestic aggregate expenditures and the
will equilibrium level of output
Other things constant, a decrease in real GDP demanded is
caused by a(n) decrease in government purchases
Other things remaining constant quantity demanded of
money varies inversely with the market interest rate.
Paid-up cost€ is the name given to: Out-of-pocket€ cost
Payments which are made to factors of production to
compensate for the toil and trouble in rendering their services
are known as: Real costs
Per capita national income means: NNP Ã· Population
Unrestricted
Perfect competition is a market structure that is characterised large number of buyers and sellers with no influence on the
by equilibrium price
Price discrimination would be profitable only when elasticity
of demand of the monopolist product is ------ in different
markets. Different
Product method of measuring national income is known as: Value added method
---------refers to that portion of total deposits of a commercial
bank which it has to keep with RBI in the form of cash
reserves. CRR
Rise in the MPC, other things being held constant,: Increase the value of the multiplier
Statement A: an increase in the price of pizza, other things
constant, increases the opportunity cost of pizza. Statement
B: Because of higher opportunity cost of pizza consumers will
reduce demand for other goods and increase the quantity
demanded of pizza Statement A is correct but statement B is not correct.
Statement A: Firms in monopolistic competition are not
producing at minimum average cost. Statement B: Firms in
monopolistic competition have excess capacity Both statement A and statement B are true
Statement A: Money income is simply the number of rupees
received per period. Statement B: Change in price level keeps
the money income constant but may increase or decrease the
real income. Both statement A and statement B are correct.
Statement A: The division of tax burden depends on
elasticities of demand and supply. Statement B: More inelastic
the demand curve and more elastic the supply curve, the
larger is the burden on consumer. Both statement A and statement B are true.
Statement A: The price elasticity of demand varies along a
downward sloping linear demand curve. Statement B: This is
because the slope of a linear demand curve changes from
point to point. Statement A is correct but statement B is not correct.
Supply of a commodity is always related with: Price of the commodity
Supply of a good and its price have: Positive relationship
Suppose a firm is producing a level of output such that MR
> MC, What should the firm do maximise its profit? The firm should increase output
Suppose the technology for producing personal computers
improves and at the same time, individuals discover new uses
for personal computers so that there is greater utilisation of
personal computers. Which of the following will happen to
equilibrium price Quantity will increase; price cannot be determined
That fraction of change in disposable income that is consumed
is called: The marginal propensity to consume
The €˜Tatkal€™ facility for reservation offered by Indian
Railways is an example of price discrimination of -------------
degree. Second
The aggregate expenditure line will shift downwards with a rise in the price level
The aggregate expenditure line, along with the 45 degree line,
determines equilibrium. This model is based on the Producers are ready to supply whatever amount of output is
assumption that: demanded at the existing price level
The aggregate expenditure line, along with the 45-degree line,
determines equilibrium. This model is based on the producers are ready to supply whatever amount of output is
assumption that demanded at the existing price level
The AR curve and the industry demand curve are same in case of monopoly
The base year for a price index is the year that serves as a reference point
The base year for a price index is the year: That serves as a reference point
The basis of the benefits of specialization is comparative advantage
The circular flow of goods and incomes shows the relationship
between: firms and households
Unrestricted
The Consumer Price Index measures the changes in price of all goods and services consumed by a household
The costs which arise due to the change in the level of
business activity are called: Incremental cost
The demand curve faced by a monopolistic competitive firm is less elastic than a purely competitive firms demand curve
The demand curve faced by a perfectly competitive firm is perfectly elastic
The demand for money is based primarily on money's role as
a(n) medium of exchange
The economy will expand if: Injections exceed leakages
a movement to the left along a given aggregate demand
The effect of an increase in the price level is represented by curve.
The effect of an increase in the price level is represented by a movement to the left along a given aggregate demand curve.
few firms large in size and producing homogenous or
The features of Oligopoly are differentiated product
The Financial account records (a) international purchases of
assets such as stocks, bonds, and bank balances. (b)
international purchases of real assets such as land, housing,
factories. Both option (a) and option (b) are correct
The four components of GDP are consumption Investment, government purchases, and net exports.
The horizontal demand curve parallel to the x-axis implies that
the elasticity of demand is: Infinite
The response to a price increase is less than the response to a
The kinked demand curve model of oligopoly assumes that: price decrease
The Law of Demand can be explained with the help of both 1 and 2
The 'law of demand' implies that other things remaining same as prices fall, quantity demanded increases.
marginal utility decreases with increase in consumption of an
The Law of dminishing marginal utilitys states that that additional unit
The law of variable proportions examines the production
function with: One factor variable keeping quantities of other factors fixed
The market structure which has single seller, no substitutes
for the products and entry of new firms is completely blocked
is Monopoly
The market structure which have large number of firms
producing and selling homogeneous products and the
customers have full knowledge about the equilibrium price is Perfect competition
The market structure which have large number of sellers,
selling differentiated products and freedom to entry and exit
is Monopolistic Competition
The money demand curve describes how the quantity of
money demanded changes with the interest rate
the lower the interest rate, the lower the opportunity cost of
The money demand curve slopes downward because holding money
lower the interest rate the lower the opportunity cost of
The money demand curve slopes downwards because holding money
The money demand curve will shift when there is a change in nominal GDP
The monopolist charges different prices from different byers
for the same product is known as Price Discrimination
The most realistic type of isoquant is Kinked isoquant
The negatively sloped portion between the ridge lines in an
isoquant map represents economic region of production
The opportunity cost of holding money increases when the interest rate rises
The positively sloped (rising) part of the long run average cost
curve is due to which of the following? Diseconomies of scale
the long-run tendencies between changes in the price level
The purchasing power parity theory is a good predictor of and the exchange rate of two countries
The ratio of the change in the equilibrium level of income to a
change in some autonomous increase in spending is the multiplier.
The reason for cost-push inflation is a decrease in aggregate supply but aggregate demand is
Unrestricted
constant
The reason for demand-pull inflation is a rise in aggregate demand but aggregate supply is constant
During which some resources become fixed and some become
The short run is a period of time: variable
The similarities between perfect competition and
monopolistic competition include easy entry and exit
The slope of the aggregate expenditure line under simple
aggregate expenditure model depends on MPC
The solution in the prisoner's dilemma is called the dominant-strategy equilibrium
Quantity of the good offered for sale at a particular price per
The supply of a good refers to: unit of time
The term "utility" means satisfaction
The term autarky means a state or society which is economically independent
There no such thing as a free lunch This statement is true as even at zero price, good or service has a cost
Those who desire that policymakers stabilize the economy
would advocate which of the following when employment is
above the natural rate? decrease government expenditures
To close a contractionary gap using fiscal policy, the
government can increase government spending by less than the size of the gap
bank rate should be increased and cash reserve ratio
To control inflation the increased
To measure a real change in the economic situation of a
country --------- should be taken into consideration. real GDP
To practice price discrimination which of the following is NOT
necessary demand curve faced by the seller should be elastic
Transaction of financial assets (shares, stocks etc) cause Keep national income unaffected.
not included in GDP because they do not represent payments
Transfer payments are for currently produced goods or services.
Transfer Payments refer to payments which are made: Without any exchange of goods and services
Unanticipated inflation creates problems for society because redistributes income and wealth
Under Oligopoly, kinked demand curve hypothesis is designed
to explain: Price rigidity
Under which market structure, though the firms earn normal
profit in the long run, there is always €˜excess capacity€™
with them? Monopolistic Competition
the sense of pleasure or satisfaction derived from consuming
Utility is goods and services
Velocity of money increases because of (a) increase in
frequency of payments (b) increase in store value of money
(c) increase in inflation rate (a) and (c) but not (b)
What effect is working when the price of pizza falls and
consumers tend to buy it instead of other goods? the substitution effect.
What is the shape of demand curve faced by a firm under
perfect competition? Horizontal
What is true of marginal cost when It is positive and decreasing.
What will be the economic situation of the monopolist in the
long run? Will always earn supernormal profits
When GDP increases budget deficit decreases
When is average product at its maximum point? When AP intersects MP
When is TP maximum? When MP becomes zero
When National Income is calculated with reference to a base
year, it is called: Real National Income
When price level rises very rapidly leading to inflation money loses its use as a store of value
When the price of a normal good falls, more of it is purchased
because of both the substitution effect and the income effect
When the total product in the short run is maximum then the marginal product is equal to zero
When total utility is falling than marginal utility is negative and decreasing
Unrestricted
When total utility is maximum than marginal utility is zero
Which among the following best describes an intermediate
good: It helps in the production of other goods
Which among the following costs remains constant in the
short run as output increases? TFC
Which among the following is a constant elasticity supply
curve? All of these
Which among the following is a determinant of elasticity of
supply? Both of these
Which among the following is a feature of Oligopoly market? Indeterminateness of the demand curve
Which among the following is incorrect? AFC=TC/Q
Which among the following is not a cause of the economies of
production? Government policies
Which among the following is true regarding the MPC and the
Multiplier? The lower the MPC, the lower would be the Multiplier
Which market structure symbolises the existence of €˜few
sellers€™ Oligopoly
Which of the following about €˜resources€™ in economics is
not true? Capital refers to the amount of money invested.
Which of the following assumptions is usually made about
government purchases They are autonomous.
Which of the following can increase real GDP per person? All the options are correct.
Which of the following equations is used to express quantity
theory of money? MV = PY
Which of the following factor does not determine the cost of
producing a good? Level of demand
Which of the following industries most closely approximates
monopolistic competition detergents
Which of the following industries most closely approximates
the oligopoly model airlines
Which of the following is an intangible item in the BOP
statement? Banking services provided in other countries
Expansionary gap is the excess of actual GDP over potential
GDP and government adopts a contractionary fiscal policy to
Which of the following is correct? address the issue.
Which of the following is known as long run average cost
curve? Planning curve
Which of the following is least likely a feature that
monopolistic competition and perfect competition have in
common? Extensive advertising to differentiate products
Which of the following is likely to be present in a perfectly
competitive market? Firms producing identical commodities
Which of the following is not a basis for trade between two
nations? one nation's absolute advantage
Which of the following is not a characteristic of a price
taker€ firm? Negatively-sloped demand curve
Which of the following is not a characteristic of monopolistic
competition? A homogenous product
Which of the following is not a current account transaction? External commercial borrowings
Which of the following is not a feature of Monopolistic
Competition? Absence of advertising
Which of the following is not a feature of perfectly
competitive market? Heterogeneous products
Which of the following is not an approach of measuring GDP? Intermediate product approach
Which of the following is not an explicit cost? the value of the producer own time
Which of the following is not correct? NDP at factor cost = GDP at factor cost plus Depreciation
Unrestricted
Those who have borrowed money at an interest rate below
Which of the following is true about inflation? the rate of inflation will generally benefit.
Which of the following is true concerning the relationship
between marginal propensity to consume and the
consumption function? The larger the MPC, the steeper the consumption function
Which of the following market situations explains marginal

costs equal to price for attaining equilibrium? Perfect competition
Which of the following might be considered the most increase in government purchases, decrease in taxes, and
expansionary set of fiscal policies? increase in transfer payments
Which of the following situation does not lead to an increase
in equilibrium price? An increase in supply accompanied by a decrease in demand
Which of the following statement about an economic model is
not true? Always has a mathematical foundation
Which of the following statement deals with debts and claims
of a country? Balance of capital account
Crowding out means large volumes of government borrowing,
making it difficult for individuals and small companies to
Which of the following statement is correct? obtain loans.
Which of the following statement is incorrect? Households produce goods and services
Which of the following statements about markets is not true? All markets provide the same amounts of information.
Which of the following statements about price elasticity of Higher the proportion of consumer budget on the good, lower
demand is not true? the value of price elasticity.
Which of the following would cause a downward movement
along the money demand curve? a decrease in the interest rate
Who has developed kinked demand curve model under
oligopoly? Paul M Sweezy
Who has sought to measure consumer surplus with the help
of indifference curve? J.R.Hicks
Who sets the price of the product under perfect competition? Buyers and sellers both
With which market form, €˜Excess capacity€™ is associated? Monopolistic competition
Unrestricted
Question - 1/60
In economics market refers to
Answer Choices
physical places, such as supermarkets, department stores, shopping malls etc.
any mechanisms by which buyers and sellers communicate to exchange goods and services
Both option 1 and option 2
only product market and not to resource market
Question - 2/60
An increase in price from 25 paisa to 30 paisa leads to an increase in the quantity supplied from
40 units to 44 units. The price elasticity of supply is:
Answer Choices
0.5
-2
-0.5
Question - 3/60
Statement A: The division of tax burden depends on elasticities of demand and supply. Statement
B: More inelastic the demand curve and more elastic the supply curve, the larger is the burden on
consumer.
Answer Choices
Both statement A and statement B are true.
Both statement A and statement B are false
Statement A is true but statement B is false.
Statement A is false but statement B is true.
Unrestricted
Question - 4/60
Which of the following can increase real GDP per person?
Answer Choices
a decrease in population growth
foreign investment from abroad
policies to encourage international trade
All the options are correct.
Question - 5/60
A rational person who currently subscribes two magazines is trying to decide whether he should
subscribe to a third. What should determine his decision?
Answer Choices
The total cost of the three magazines compared to the total satisfaction the individual would
receive.
The total amount of satisfaction the person would get from the magazines.
The additional cost of the third magazine compared to the additional benefit the person
would get from the third magazine.
The cost of the third magazine, including the time it takes to read it.
Question - 6/60
Elasticity of production is
Answer Choices
percentage change in variable input due to percentage change in output.
percentage change in output due to percentage change in variable input.
percentage change in output due to percentage change in price.

Proportionate change in quantity demanded as a result of proportionate change in price of the
product.
Unrestricted
Question - 7/60
Golden rule of profit maximization says that a profit maximizing firm produces
Answer Choices
where marginal revenue equals marginal cost, provided marginal cost cuts marginal revenue
from above.
where marginal revenue equals marginal cost, provided marginal cost cuts marginal
revenue from below.
where average revenue equals average cost, provided average cost cuts average revenue from
below.
where average revenue equals average cost, provided average cost cuts average revenue from
above.
Question - 8/60
A typical demand curve can not be
Answer Choices
a straight line
rising upward to right
concave from below
convex from below
Question - 9/60
Markets reduce transactions costs
Answer Choices
because each market uses the same set of rules for buying and selling goods and services
when prices are set by the sellers and are not determined by negotiation between the buyers and
the sellers
by decreasing the time spent searching for information about goods and services
only when the government can coordinate the plans of many buyers and sellers
Unrestricted
Question - 10/60
Expansion and contraction of demand mean
Answer Choices
Movement to a higher demand curve.
Movement to a lower demand curve

Movements along the same demand
curve
All of these
Question - 11/60
Firms under perfect competition in the short run can earn only
Answer Choices
Economic Profit
Normal profit
Loss
All of these
Question - 12/60
In 2013, Mr. X earned a salary of Rs. 25,000 and he spent Rs. 24,000, thus saving Rs.1000. At
the end of the year, he received a bonus of Rs.1000 and he spent Rs.500 of it, saving the other
Rs. 500. What was his marginal propensity to consume?
Answer Choices
0.96
0.5
0.04
0.02
Unrestricted
Question - 13/60
Along a demand curve real income is assumed to be constant.
Answer Choices
always true
always false
sometimes true sometimes false
None of these
Question - 14/60
If capital inputs are measured along the vertical axis and labour inputs are measured along the
vertical axis then upper ridge line denotes
Answer Choices
the points where marginal product of capital is zero
the points where marginal product of capital is one.
the points where marginal product of labour is zero
the points where marginal product of labour is one
Question - 15/60
Automatic stabilisers act to __________ government expenditures and __________ government
revenues during recessions.
Answer Choices
decrease; increase
increase; increase
decrease; decrease
increase; decrease
Unrestricted
Question - 16/60
The money demand curve slopes downward because
Answer Choices
the lower the interest rate, the higher the opportunity cost of holding money
the higher the interest rate, the lower the opportunity cost of holding money result of
price increases
the lower the interest rate, the lower the opportunity cost of holding money
None of these
Question - 17/60
In the second stage of short run production
Answer Choices
elasticity of production is greater than one.
elasticity of production is less than one but greater than zero.
elasticity of production is greater than one but less than infinity.
elasticity of production is less than zero.
Question - 18/60
Statement A: an increase in the price of pizza, other things constant, increases the opportunity
cost of pizza.
Statement B: Because of higher opportunity cost of pizza consumers will reduce demand for
other goods and increase the quantity demanded of pizza
Answer Choices
Both statement A and statement B are correct. And statement B is the right explanation of
statement A
Both statement A and statement B are correct. But statement B is not the right explanation of
statement A
Statement A is correct but statement B is not correct.
Statement A is not correct but statement B is correct.
Unrestricted
Question - 19/60
The steeper the short-run aggregate supply curve,
Answer Choices
the impact a shift of the aggregate demand curve will be more on real GDP and less on the price
level.
the impact a shift of the aggregate demand curve will be less on nominal GDP and more on the
price level.
the impact a shift of the aggregate demand curve will be less on real GDP and more on
the price level.
None of these
Question - 20/60
In economics
Answer Choices
expected total benefit and expected total costs are compared to make a choice
expected average benefit and expected average costs are compared to make a choice
expected marginal benefit and expected marginal costs are compared to make a choice
affordability of the product and availability of the product are taken into account to make a
choice
Question - 21/60
In which of the following industries do firms set prices?
Answer Choices
competitive markets, but not monopoly markets
monopoly markets, but not competitive markets
competitive and monopoly markets
neither competitive nor monopoly markets
Unrestricted
Question - 22/60
Green GDP means
Answer Choices
Measuring the impact of production on air pollution, water pollution, soil depletion, and
the loss of other natural resources.
Measuring the value of all green vegetables and forest products.
GDP of a country express in terms of USD dollar also known as green bucks informally.
Measuring GDP ignoring the impact of production on air pollution, water pollution, soil depletion,
and the loss of other natural resources.
Question - 23/60
Macroeconomics is the study of
Answer Choices
market regulation.
money and financial markets.
economy-wide phenomena.
how households and firms make decisions and how they interact.
Question - 24/60
If the GDP price index is 150 and nominal GDP is Rs.9,000 billion, then real GDP is
Answer Choices
Rs.135 billion.
Rs. 1,350 billion.
Rs. 600 billion.
Rs. 6,000 billion.
Question - 25/60
The price elasticity of supply is +4. The price increases by 15%. Sales were originally 200 units.
Unrestricted
What will they be now?
Answer Choices
80 units
320 units
60 units
120 units
Question - 26/60
MC = MR and MR = AR means
Answer Choices
The equilibrium position of a firm in the long period
The equilibrium position of a firm under imperfect competition
The equilibrium position of a firm under perfect competition
None of these
Question - 27/60
Discretionary Fiscal Policy differs from automatic stablizer Fiscal Policy in the sense that
Answer Choices
The former deals with government spending and the latter deals with tax policy
The former is chosen by Congress while the latter is chosen by the President
The former is always stabilizing, while the latter is never stabilizing
The former often takes years to enact, while the latter takes effect automatically
Question - 28/60
If the income elasticity of a good is greater than one but less than zero then a) it is a normal
good. b) it is a necessary good. c) it is an inferior good.
Unrestricted
Answer Choices
Only (a) is right.
Both (a) and (b) are right.
Both (b) and (c) are right.
All of these are right
Question - 29/60
Statement A: A higher Herfindahl index value signifies increase in competition along with
increasing market power. Statement B: The Herfindahl index is considered to be ratio as it takes
all the firms into account.advantageous compared to concentration
Answer Choices
Only statement A is true.
Only statement B is true
Both statement A and statement B are true
Question - 30/60
For a given price level aggregate demand curve shifts if there is change in (a)government
expenditure (b)investment expenditure
Answer Choices
Only (a)
Only (b)
Both (a) and (b)
None of these but change in consumption expenditure
Unrestricted
Question - 31/60
Marginal utility curve of a consumer is also his
Answer Choices
supply curve
demand curve
total utility curve
none of these
Question - 32/60
Statement A: The price elasticity of demand varies along a downward sloping linear demand
curve. Statement B: This is because the slope of a linear demand curve changes from point to
point.
Answer Choices
Both statement A and statement B are correct. And statement B is the right explanation for
statement A.
Both statement A and statement B are correct. But statement B is not the right explanation of
statement A
Question - 33/60
In the long run zero substitutability between the factor inputs is a feature of
Answer Choices
linear isoquant
Input output isoquant
Smooth convex isoquant
Kinked isoquant
Unrestricted
Question - 34/60
If (MUx / Px) > (MUy / Py) then
Answer Choices
the consumer will increase his consumption of X and decrease his consumption of Y.
the consumer will decrease his consumption of X and increase his consumption of Y.
the consumer will increase his consumption of both X and Y.
the consumer will decrease his consumption of both X and Y.
Question - 35/60
If marginal utility is zero:
Answer Choices
Total utility is zero
An additional unit of consumption will decrease total utility
An additional unit of consumption will increase total utility
Total utility is maximized
Question - 36/60
At any given price level which of the following is not going to increase real GDP demanded
Answer Choices
an increase in transfer payments
an increase in net taxes
an increase in government purchases
All of these.
Unrestricted
Question - 37/60
Statement A: Firms in monopolistic competition are not producing at minimum average cost.
Statement B: Firms in monopolistic competition have excess capacity
Answer Choices
Only statement A is true.
Only statement B is true
Both statement A and statement B are true
Question - 38/60
The price elasticity of demand is the
Answer Choices
Ratio of the percentage change in price to the percentage change in quantity demanded.
Ratio of the change in price to the change in quantity demanded.

Ratio of the percentage change in quantity demanded to the percentage change in
price.
Ratio of the percentage change in quantity demanded to the percentage change in price of
related good.
Question - 39/60
If Average cost (AC) is falling then
Answer Choices
marginal Cost (MC) less than Average Cost (AC)
marginal Cost (MC) equal to Average Cost (AC)
marginal Cost (MC) greater than Average Cost (AC)
the slope of Average Cost (AC) is increasing.
Unrestricted
Question - 40/60
When the price of a normal good falls, more of it is purchased because of
Answer Choices
The substitution effects
The income effects
Either the Substitution effect or the income effect
Both Substitution effect and income effect
Question - 41/60
If an increase in the price of product X shifts the demand for product Y rightward and,
conversely, if a decrease in the price of X shifts demand for Y leftward then
Answer Choices
X and Y are substitute products
X and Y are complementary products
X and Y are not related
X and Y both are inferior products
Question - 42/60
The Lerner index is defined as
Answer Choices
(price - cost)/cost
(cost - price)/price
(cost - price)/ cost
(price - cost)/price
Unrestricted
Question - 43/60
A firm practising price discrimination will be
Answer Choices
Charging different prices for different qualities of product
Buying in the cheapest and selling in the dearest market.
Charging different prices in different markets of a product
Buying only from firms selling at a discount
Question - 44/60
A monopolist has no supply curve because
Answer Choices
monopolists have no marginal cost curve
monopolists can charge any price they want

as demand changes, each output level can be consistent with more than one profit-
maximizing price
as demand changes, the firm's profit-maximizing choice of output may change
Question - 45/60
Which of the following is least likely a feature that monopolistic competition and perfect
competition have in common?
Answer Choices
Output occurs where MR = MC
Zero economic profit in the long run
Extensive advertising to differentiate products
Large number of buyers and sellers
Unrestricted
Question - 46/60
Average product remains positive (a)as long as total product is positive. (b)as long as marginal
product is positive.
Answer Choices
Both (a) and (b) are correct.
Only (a) is correct.
Only (b) is correct.
Both (a) and (b) are false.
Question - 47/60
A perfectly competitive firm producing 100 units of output per period fnds that: Average total
cost is $20; Average variable cost is $12; Marginal cost is $18 and increasing; Price of the
product is $15. This firm should
Answer Choices
produce more output
reduce production without shutting down
shut down (reduce output to zero)
do nothing (it is currently maximizing pro?t)
Question - 48/60
Statement A: Money income is the amount of rupees received per period. Statement B: Change
in price level keeps the money income constant but may increase or decrease the real income.
Answer Choices
Both statement A and statement B are correct.
Both statement A and statement B are false.
Unrestricted
Question - 49/60
Upward or downward shift of the demand curve shows
Answer Choices
change in quantity demanded
change in price
change in supply
both change in quantity demanded and change in price
Question - 50/60
A person finds Rs.2000 on the street. If he decides to use the money to go to an IPL match, his
opportunity cost of going to the game is
Answer Choices
nothing, because you found the money on the street.

Rs.2000 as he could have used the money to buy other things plus the value of his time spent at
the game.
Rs.2000 as he could have used the money to buy other things plus the value of his time
spent at the game. Plus the cost of snacks he purchased at the game.
Rs. 2000 because he could have used the money to buy other things.
Question - 51/60
In perfect competition there is large number of sellers.
Answer Choices
Large number of sellers means at least 1000 sellers in the market.
Large number of sellers means infinite number of sellers in the market.
Large number of sellers means every seller is selling a small amount in relative sense.
Large number of sellers means every seller is selling a small amount in absolute sense.
Unrestricted
Question - 52/60
When GDP increases budget deficit
Answer Choices
decreases
increases
remains constant
none of these
Question - 53/60
(a) Economic information is usually scarce and costly to acquire.
(b) Economic information is usually not required for rational decision making.
Answer Choices
Both statement (a) and (b) are true.
Both statement (a) and (b) are false.
Statement(a) is true but statement (b) is false.
Statement(a) is false but statement (b) is true.
Question - 54/60
Opportunity cost is
Answer Choices
the additional benefit of buying an additional unit of a product.
that which we forgo, or give up, when we make a choice or a decision.
the cost incurred in the past before we make a decision about what to do in the future.
a cost that cannot be avoided, regardless of what is done in the future
Unrestricted
Question - 55/60
If marginal benefit is greater than marginal cost for an activity, a rational choice involves:
Answer Choices
no more of the activity.
more or less, depending on the benefits of other activities.
less of the activity.
more of the activity
Question - 56/60
An Indian company owns a fast-food store in Sri lanka. The value of the goods and services
produced in the store are Included
Answer Choices
In both Sri lanka?s GDP and India?s GDP.
In Sri lanka?s GDP, but not in India?s GDP.
In India?s GDP, but not in Sri lanka?s GDP.
Partly in Sri lanka?s GDP and partly in India?s GDP.
Question - 57/60
What effect is working when the price of pizza falls and consumers tend to buy it instead ofother
goods?
Answer Choices
the income effect.
the diminishing marginal utility effect.
the substitution effect.
the ceteris paribus effect.
Unrestricted
Question - 58/60
In the context of circular flow of income and expenditure which of the following statements is
not correct?
Answer Choices
Firms sell factors of production to households
Households buy goods and services from business firms
Firms buy factors of production from households
The government taxes households and firms
Question - 59/60
In economics rational self interest means
Answer Choices
blind materialism, pure selfishness, or

greed.
individuals try to mimimize the expected benefit achieved with a given cost
individuals try to maximize the expected cost of achieving a given benefit.

individuals try to maximize the expected benefit achieved with a given cost or to
minimize the expected cost of achieving a given bene?t.
Question - 60/60
Marginal product is
Answer Choices
the produce when all factor inputs are employed at optimum efficiency
annual output of the most efficient firm
the extra output obtained from employing an additional unit of a factor
None of these
Unrestricted
11/22/2020 Assignment - 2: Attempt review
Started on Sunday, 22 November 2020, 9:05 AM

State Finished
Completed on Sunday, 22 November 2020, 9:42 AM
Time taken 36 mins 50 secs
Grade 13.50 out of 15.00 (90%)
Question 1
Complete
Mark 0.50 out of 0.50
Demand-pull in ation is associated with
Select one:
a. decreasing aggregate demand and greater unemployment 
b. increasing aggregate demand and lower unemployment
c. decreasing aggregate demand and lower unemployment
d. increasing aggregate demand and greater unemployment
https://slm.imtcdl.ac.in/moodle/mod/quiz/review.php?attempt=7189&cmid=325 1/16
Question 2
Complete
The demand for money is based primarily on money's role as a(n)
Select one:
a. interest-bearing asset
b. store of wealth
c. medium of exchange
d. standard of value
Question 3

Complete
If the MPC equals 0.75 and Government expenditure increases by $100, real GDP demanded will increase by
Select one:
a. 25 percent
b. 400
c. 50
d. 75 percent
Question 4
Complete
Monopolistic competition is di erent from perfect competition because monopolistic competitors produce
Select one:
a. di erentiated products
b. unique products
c. a homogeneous product
d. a homogeneous but unique product
Question 5

Complete
A rm could di erentiate its product by all of the following means except one. Which is the exception?
Select one:
a. increasing the number of services that accompany the product
b. emphasizing that the product provides the same bene ts to consumers as the others on the market, even when it is really physically
di erent
c. using packaging or advertising to create a special subjective image of the product in the consumer's mind
d. making the product available at a number of di erent locations
Question 6
Complete
If a monopolistically competitive rm can earn a pro t, it will adjust production until
Select one:
a. MR = ATC
b. MC > MR
c. MR > AVC
d. MR = MC
Question 7

Complete
Gross Domestic Product includes nal goods and services, but not intermediate goods because
Select one:
a. intermediate goods are only produced by government
b. the value of the intermediate goods is already included in the value of the nal goods
c. intermediate goods are not part of investment spending
d. the value of the intermediate goods is already included as inventory investment
Question 8
Complete
The opportunity cost of holding money increases when
Select one:
a. the price level falls
b. nominal GDP rises
c. the interest rate falls
d. the interest rate rises
Question 9

Complete
Which of the following is the best example of an intermediate good or service?
Select one:
a. pizzas bought at a restaurant
b. sunglasses worn on a summer vacation in Florida
c. any good bought by a household, rather than a rm
d. legal services hired by a public accounting rm
Question 10
Complete
During periods when the in ation rate uctuates widely,
Select one:
a. all relative prices increase at the same rate, leaving money prices constant
b. economic e ciency increases because decision makers pay closer attention to changes in money prices
c. all money prices rise at the same rate, causing relative prices to increase
d. uncertainty about changes in relative prices causes a decrease in economic e ciency
Question 11

Complete
Which of the following assumptions is usually made about government purchases?
Select one:
a. They vary directly with the interest rate.
b. They equal the level of net taxes in equilibrium.
c. They are autonomous.
d. They vary directly with the level of income.
Question 12
Complete
Monopolistically competitive rms ignore the e ect of their decisions upon other rms in the industry because
Select one:
a. there is only one seller in the market
b. each rm is small relative to the market
c. each rm is large relative to the market
d. there are few sellers in the market
Question 13

Complete
For rms in an oligopoly to be interdependent,
Select one:
a. goods must be di erentiated and few sellers
b. goods can be either undi erentiated or di erentiated and there are few rms large in size
c. rms must be small in size and selling di erentiated goods
d. goods must be undi erentiated and many sellers
Question 14
Complete
Which of the following would not be included in the calculation of GDP?
Select one:
a. Sandy, who is on welfare, receives $100 in food stamps.
b. Joe pays a plumber $100 to x a broken pipe.
c. Laurie pays $15 for a haircut.
d. Jim purchases a new automobile.
Question 15

Complete
If future price changes were perfectly anticipated by both borrowers and lenders, what would happen to the real interest rate in the future if
the price level changed?
Select one:
a. it would increase
b. it would not change
c. it would decrease
d. it would decrease by the amount of the price increase
Question 16
Complete
A change in autonomous net taxes a ects the equilibrium quantity of GDP demanded
Select one:
a. in the same way as a change in autonomous net exports
b. only indirectly, by rst changing the level of disposable income
c. in the same way as a change in autonomous government purchases
d. in the same way as a change in autonomous planned investment
Question 17

Complete
Fiscal policy focuses on manipulating
Select one:
a. aggregate demand to stimulate the economy and aggregate supply to contract it
b. aggregate demand to smooth out business uctuations
c. aggregate supply to smooth out business uctuations
d. both aggregate supply and aggregate demand to smooth out business uctuations
Question 18
Complete
If Ford raises the price of its automobiles, the demand curve for GM automobiles
Select one:
a. is una ected
b. becomes more elastic
c. shifts to the left
d. shifts to the right
Question 19

Complete
In ation is
Select one:
a. a rise in the real prices of all goods and services
b. a continuing rise in everyone's standard of living
c. a reduction in everyone's standard of living
d. a general and continuous rise in the money prices of goods and services
Question 20
Complete
Which of the following would cause a downward movement along the money demand curve?
Select one:
a. a decrease in the interest rate
b. an increase in real GDP
c. an increase in the interest rate
d. a decrease in real GDP
Question 21

Complete
Which of the following is not true about Gross Domestic Product?
Select one:
a. It re ects production in a particular year.
b. It includes transfer payments.
c. Intermediate goods and services are excluded to prevent double counting.
d. It includes only nal goods and services.
Question 22
Complete
A decrease in autonomous net taxes
Select one:
a. decreases GDP more than an equal decrease in government purchases
b. increases GDP as much as an equal decrease in government purchases
c. increases GDP less than an equal increase in government purchases
d. changes GDP in an unpredictable manner
Question 23

Complete
A movement upward and to the left along the money demand curve is caused by
Select one:
a. an increase in the interest rate
b. a decrease in real GDP
c. an increase in real GDP
d. a decrease in the interest rate
Question 24
Complete
An oligopoly is characterized by
Select one:
a. a single rm and no barriers to entry
b. a large number of rms and no barriers to entry
c. many rms and some barriers to entry
d. few rms, which have control over market price
Question 25

Complete
Which of the following would lead to the most in ation?
Select one:
a. Aggregate demand increases and aggregate supply increases.
b. Aggregate demand increases and aggregate supply decreases.
c. Both aggregate demand and aggregate supply increase.
d. Both aggregate demand and aggregate supply decrease.
Question 26
Complete
In an oligopoly, the demand curve facing an individual rm depends upon
Select one:
a. the shape of the rm's marginal cost curve
b. the behavior of competing rms
c. the rm's supply curve
d. the shape of the rm's average total cost curve
Question 27

Complete
A cartel is
Select one:
a. a group of monopolistically competitive rms which charge the same price
b. a group of oligopolistic rms that engage in formal collusion
c. usually legal in India
d. an agreement among rival rms to set prices independently
Question 28
Complete
Suppose in ation is expected to be 4% next year, and your employer agrees to a 6% increase in your nominal wage. You expect your real
wage to:
Select one:
a. Increase by 2%
b. Increase by 6%
c. Decrease by 10%
d. Increase by 4%

Question 29
Complete
Which of the following is most likely produced in a monopolistically competitive market?
Select one:
a. computer chips
b. motorcycles
c. rewood
d. detergents
Question 30
Complete
In both monopolistic competition and non-price-discriminating monopoly,
Select one:
a. the marginal revenue curve lies below the demand curve
b. marginal revenue is equal to average revenue
c. the marginal revenue curve lies above the average revenue curve
d. the marginal revenue curve lies above the demand curve

 
Started on Tuesday, 29 December 2020, 5:43 PM

State Finished
Completed on Tuesday, 29 December 2020, 6:08 PM
Grade 14.00 out of 15.00 (93%)
Question 1
Complete
Which of the following, other things constant, will shift the money demand curve to the left?
Select one:
a. an increase in real GDP
b. an increase in the interest rate
c. a decrease in real GDP

Question 2
Complete
It is harder to explain the behavior of rms in oligopoly than in other market structures because in oligopoly
Select one:
a. only homogeneous products are produced
b. only di erentiated products are produced
c. the rms act independently of each other
d. rms base their decisions on what their rivals do
Question 3
Complete

Which monetary policy would be appropriate to close a contractionary gap?
Select one:
a. an increase in reserve requirements
b. a tax cut
c. a decrease in government purchases
d. the RBI decreasing the bank rate
Question 4
Complete
Select one:
a. MR = ATC
b. MC > MR
c. MR = MC
d. MR > AVC
Question 5
Complete

If the economy experiences a contractionary gap and the RBI buys government securities in the open-market, then:
Select one:
a. Money supply increases, the interest rate increases, and the aggregate demand increases
b. Money supply increases, investment increases, aggregate demand increases
c. Money supply decreases, the interest rate decreases, and the aggregate demand falls
d. Money supply decreases, the investment decreases, and the aggregate demand increases
Question 6
Complete
A cartel's pro t-maximizing price is
Select one:
a. on the demand curve where it intersects its marginal cost curve
b. on the demand curve at the quantity where combined marginal cost equals marginal revenue
c. determined by using the cost-plus pricing model
d. the highest price possible
Question 7
Complete

Select one:
a. increases GDP as much as an equal decrease in government purchases
b. increases GDP less than an equal increase in government purchases
c. decreases GDP more than an equal decrease in government purchases
Question 8
Complete
Select one:
a. unique products
b. di erentiated products
c. a homogeneous product
d. a homogeneous but unique product
Question 9
Complete

Select one:
a. They are autonomous.
b. They equal the level of net taxes in equilibrium.
c. They vary directly with the interest rate.
d. They vary directly with the level of income.
Question 10
Complete
Select one:
a. the value of the intermediate goods is already included as inventory investment
d. intermediate goods are only produced by government
Question 11
Complete

If MPC is 0.8, the simple tax multiplier is:
Select one:
a. 3
b. -4
c. 5
d. 4
Question 12
Complete
Select one:
a. it would decrease by the amount of the price increase
b. it would decrease
c. it would not change
d. it would increase
Question 13
Complete

In periods of high in ation,
Select one:
a. the purchasing power of money is decreasing
b. the purchasing power of money is increasing
c. low nominal interest rates are likely to result
d. nobody wants to work and earn income
Question 14
Complete
Gross Domestic Product equals the
Select one:
a. market value of all goods and services produced by resources located in a country
b. value added to the economy by intermediate goods and services minus original cost
c. market value of all nal goods and services produced by resources located in a country.
d. total output of all goods and services produced by resources located in a country
Question 15
Complete

Select one:
a. detergents
b. rewood
c. motorcycles
d. computer chips
Question 16
Complete
Select one:
a. increasing the number of services that accompany the product
b. emphasizing that the product provides the same bene ts to consumers as the others on the market, even when it is really physically
di erent
c. using packaging or advertising to create a special subjective image of the product in the consumer's mind
d. making the product available at a number of di erent locations
Question 17
Complete

Select one:
a. there are few sellers in the market
b. there is only one seller in the market
d. each rm is small relative to the market
Question 18
Complete
Select one:
a. marginal revenue is equal to average revenue
b. the marginal revenue curve lies above the average revenue curve
c. the marginal revenue curve lies above the demand curve
d. the marginal revenue curve lies below the demand curve
Question 19
Complete

If toy stores overestimate the demand for a toy in 2004 and, as a result, have an unexpectedly large number of them on hand at the end of
the year, the value of the increased inventory of those toys will be counted as
Select one:
a. investment in 2005
b. consumption in 2005
c. investment in 2004
d. consumption in 2004
Question 20
Complete
Select one:
a. It includes only nal goods and services.
b. It includes transfer payments.
c. Intermediate goods and services are excluded to prevent double counting.
d. It re ects production in a particular year.
Question 21
Complete

If the in ation rate is higher than expected, which of the following groups in society would be most likely to gain?
Select one:
a. borrowers
b. persons holding large amounts of money
c. lenders
d. persons on xed incomes
Question 22
Complete
The view that union wage demands may be a source of in ation would be best associated with the
Select one:
a. demand push view of in ation
b. demand pull view of in ation
c. supply shock view of in ation
d. cost push view of in ation
Question 23
Complete

wage to:
Select one:
a. Decrease by 10%
b. Increase by 2%
c. Increase by 6%
d. Increase by 4%
Question 24
Complete
Select one:
a. the interest rate falls
b. the interest rate rises
c. nominal GDP rises
d. the price level falls
Question 25
Complete

Select one:
a. 400
b. 75 percent
c. 50
d. 25 percent
Question 26
Complete
Select one:
a. a decrease in real GDP
b. a decrease in the interest rate
d. an increase in the interest rate
Question 27
Complete

Oligopolists are more sensitive to the pricing and output policies of their rivals when
Select one:
a. there are barriers to entry
b. all rms produce identical products
c. their products are highly di erentiated
d. there is freedom of entry and exit
Question 28
Complete
In which market structure(s) might rms produce an undi erentiated product?
Select one:
a. perfect competition and homogenous oligopoly
b. perfect competition only
c. monopoly only
d. monopolistic competition only
Question 29
Complete

Select one:
a. decreasing aggregate demand and greater unemployment
b. decreasing aggregate demand and lower unemployment
c. increasing aggregate demand and lower unemployment
Question 30
Complete
Select one:
a. becomes more elastic
b. shifts to the right
d. is una ected
 
Started on Monday, 30 November 2020, 1:02 PM

State Finished
Completed on Monday, 30 November 2020, 1:34 PM
Grade 15.00 out of 15.00 (100%)
Question 1
Complete
Michigan has an abundant supply of fresh water. However, an economist would consider it a scarce resource because
Select one:
a. pollution will eventually destroy all life in the Great Lakes
b. water is necessary for humans' physical survival
c. water commands a very high price 
d. water is limited relative to people's unlimited wants
Question 2
Complete
Which of the following is not a barrier to entry which leads to monopoly power.
Select one:
a. control of an essential resource
b. homogeneous product
c. control over key patents
d. economies of scale
Question 3
Complete
Mark 0.50 out of 0.50 
Which of the following will cause the demand curve for a normal good to shift to the right?
Select one:
a. a decrease in income
b. an increase in the price of a substitute good
c. a decrease in the price of the good
d. an increase in the price of a complementary good
Question 4
Complete
Along a linear demand curve,
Select one:
a. both the slope and price elasticity are constant
b. the price elasticity is constant, but the slope varies
c. total revenues are constant
d. the slope is constant, but the price elasticity varies
Question 5
Complete
Mark 0.50 out of 0.50 
Economics is the study of
Select one:
a. role that money plays in the economy
b. how the human race di ers from other species
c. how individuals amass personal fortunes in the stock market
d. how individuals and nations deal with the problem of scarcity
Question 6
Complete
Which of the following is most likely to be a xed resource for Paul's Country Fresh Pies, Inc.?
Select one:
a. berries
b. baker
c. our
d. ovens
Question 7
Complete
Mark 0.50 out of 0.50 
Which of the following is a long-run adjustment?
Select one:
a. Glow Electric disassembles one of its nuclear power plants.
b. A new economics professor is hired on campus.
c. Microsoft cuts back its hiring of new graduates.
d. General Motors increases its orders for steel.
Question 8
Complete
If variable cost rises from $60 to $100 as output increases from 15 to 20 units, the marginal cost of the twentieth unit
Select one:
a. is $40
b. is $8
c. is $5
d. is $100
Question 9
Complete
Mark 0.50 out of 0.50 
Marginal product is de ned as
Select one:
a. the amount of additional resources needed to increase output by one unit when all resources are increased by the same amount
b. the increase in revenue that occurs when an additional unit of a resource is added
c. the increase in output that occurs when all resources are increased by the same proportion
d. the increase in output that occurs when an additional unit of a resource is added, holding all other resources constant
Question 10
Complete
The marginal product of labor is the
Select one:
a. change in revenue from using one more unit of labor
b. cost of one worker
c. average output per worker
d. change in output from using one more unit of labor
Question 11
Complete
Mark 0.50 out of 0.50 
Suppose Ernie gives up his job as nancial advisor for P.E.T.S., at which he earned $30,000 per year, to open up a store selling spot remover
to Dalmatians. He invested $10,000 in the store, which had been in savings earning 5 percent interest. This year's revenues in the new
business were $50,000, and explicit costs were $10,000. Calculate Ernie's accounting pro t
Select one:
a. 40000
b. 20000
c. 50000
d. 10000
Question 12
Complete
For which of the following is demand most likely to be perfectly inelastic?
Select one:
a. Hotdogs
b. BMW automobiles
c. insulin
d. Pepsi Cola
Question 13
Complete
Mark 0.50 out of 0.50 
Perfectly competitive rms respond to changing market conditions by varying their
Select one:
a. market share
b. price
c. information
d. output
Question 14
Complete
The opportunity cost of a resource
Select one:
a. includes explicit cost only
b. is equal to the market price of the resource
c. includes implicit cost only
d. includes both explicit and implicit cost
Question 15
Complete
Mark 0.50 out of 0.50 
As a monopolist increases the quantity of output produced, what happens to price (P) and marginal revenue (MR)?
Select one:
a. P is constant, but MR decreases
b. both P and MR decrease, but MR falls faster than P
c. P decreases, but MR is constant
d. both P and MR remain constant
Question 16
Complete
At the point where diminishing marginal returns set in, the slope of the total product curve is
Select one:
a. negative and decreasing
b. negative and increasing
c. positive and decreasing
d. positive and increasing
Question 17
Complete
Mark 0.50 out of 0.50 
In economics, capital is de ned as
Select one:
a. human creations used in the production process
b. the natural, unskilled abilities of people
c. money and other nancial assets
d. natural resources, such as water, oil, and iron ore
Question 18
Complete
If we say that demand has increased, we mean that there has been
Select one:
a. a rightward shift of the demand curve
b. a rightward movement along the demand curve
c. a leftward shift of the demand curve
d. a leftward movement along the demand curve
Question 19
Complete
Mark 0.50 out of 0.50 
The respective payments for the resources of natural resources, labor, capital, and entrepreneurial ability are
Select one:
a. rent, wages, interest, and pro t
b. pro t, rent, interest, and wages
c. interest, wages, pro t, and rent
d. interest, pro t, wages, and rent
Question 20
Complete
Suppose there are only two goods, apples and oranges. What happens if the price of each good increases by 15 percent?
Select one:
a. Demand for both goods increases.
b. There is no substitution e ect because relative prices have remained constant.
c. The consumer will substitute apples for oranges
d. The consumer will substitute oranges for apples.
Question 21
Complete
Mark 0.50 out of 0.50 
The e ect of a decrease in the price of personal computers, other things constant, is likely to be best represented by which of the following?
Select one:
a. an upward movement on the demand curve
b. a rightward shift of the demand curve
c. a downward movement on the demand curve
d. a leftward shift of the demand curve
Question 22
Complete
The long run is a period of time
Select one:
a. during which at least one resource is xed
b. during which all resources are xed
c. during which all resources are variable
d. less than one year
Question 23
Complete
Mark 0.50 out of 0.50 
Which of the following is most likely to be an inferior good?
Select one:
a. used clothings
b. soft drinks
c. restaurant meals
d. airline travel
Question 24
Complete
Which of the following will cause demand to be relatively elastic?
Select one:
a. The time period is relatively short
b. The good is considered a necessity
c. There are few substitutes
d. The time period is relatively long
Question 25
Complete
Mark 0.50 out of 0.50 
Which of the following statements is true? If the marginal product of labor diminishes,
Select one:
a. average xed cost rises
b. average total cost must rise
c. marginal cost rises
d. average variable cost is constant
Question 26
Complete
The demand curve facing a single-price monopolist
Select one:
a. is the same as its average revenue curve
b. is the same as its marginal revenue curve
c. lies above its average revenue curve
d. is the same as the perfect competitor's demand curve
Question 27
Complete
Mark 0.50 out of 0.50 
Unlike a "service," a "good"
Select one:
a. is physical and tangible
b. uses resources to satisfy wants
c. is a resource
d. is desirable
Question 28
Complete
The demand curve facing a perfectly competitive rm is
Select one:
a. perfectly inelastic
b. unit elastic
c. perfectly elastic
d. identical to the industry demand curve
Question 29
Complete
Mark 0.50 out of 0.50 
Which of the following statements about the substitution e ect of a price change is true?
Select one:
a. It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
b. It a ects the consumer's ability, rather than willingness, to purchase a good.
c. It is usually equal to the income e ect.
d. It is caused by a change in relative prices.
Question 30
Complete
Explicit costs are
Select one:
a. not part of opportunity cost
b. actual monetary payments for resources purchased
c. the only cost considered in opportunity cost
d. exactly the same as implicit costs
 

Started on Sunday, 29 November 2020, 6:45 PM

State Finished
Completed on Sunday, 29 November 2020, 6:59 PM
Grade 15.00 out of 15.00 (100%)
Question 1
Complete
Because market price remains constant as a perfectly competitive rm expands output, each rm faces
Select one:
a. a downward sloping curve
b. a horizontal demand curve
c. constant costs
d. constant returns to scale 
Question 2
Complete
Select one:
a. P decreases, but MR is constant
b. P is constant, but MR decreases
c. both P and MR remain constant
d. both P and MR decrease, but MR falls faster than P
Question 3
Complete

Select one:
a. 20000
b. 40000
c. 10000
d. 50000
Question 4
Complete
Select one:
a. a leftward shift of the demand curve
c. a rightward movement along the demand curve
Question 5
Complete

Select one:
b. total revenues are constant
c. the price elasticity is constant, but the slope varies
d. the slope is constant, but the price elasticity varies
Question 6
Complete
Cash payments for steel to be used in production would be an example of
Select one:
a. implicit costs
b. explicit costs
c. sunk costs
d. xed costs
Question 7
Complete

Economists assume that rms seek to
Select one:
a. maximize economic pro t
b. maximize total revenue
c. maximize normal pro t
d. maximize accounting pro t
Question 8
Complete
Select one:
a. ovens
b. baker
c. our
d. berries
Question 9
Complete

Select one:
a. how individuals and nations deal with the problem of scarcity
b. how individuals amass personal fortunes in the stock market
c. how the human race di ers from other species
d. role that money plays in the economy
Question 10
Complete
In perfect competition, if one rm raises its price,
Select one:
a. others will follow
b. that rm will increase its revenues
c. all consumers will be adversely a ected
d. that rm will lose revenues because other rms will not follow
Question 11
Complete

Which of the following markets best approximates the perfectly competitive market structure?
Select one:
a. insurance
b. automobile manufacturing
c. world commodity markets
d. airlines
Question 12
Complete
The demand curve for a good that has many perfect substitutes in consumption is likely to be
Select one:
a. steep
b. highly inelastic
c. horizontal
d. upward sloping
Question 13
Complete

Select one:
a. water is limited relative to people's unlimited wants
b. water commands a very high price
c. water is necessary for humans' physical survival
d. pollution will eventually destroy all life in the Great Lakes
Question 14
Complete
Select one:
a. It is caused by a change in relative prices.
b. It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
c. It a ects the consumer's ability, rather than willingness, to purchase a good.
d. It is usually equal to the income e ect.
Question 15
Complete

Select one:
a. positive and decreasing
b. positive and increasing
c. negative and decreasing
d. negative and increasing
Question 16
Complete
The income e ect of an increase in the price of backpacks (a normal good) is a(n)
Select one:
a. increase in the quantity demanded of backpacks
b. decrease in the quantity demanded for backpacks
c. decrease in the demand for backpacks
d. increase in the demand for backpacks
Question 17
Complete

If the demand for airline tickets to Fort Lauderdale is price elastic
Select one:
a. a small change in price will cause a large shift in the demand curve
b. a large change in price will cause a small shift in the demand curve
c. airline revenue will increase if supply decreases
d. airline revenue will increase if supply increases
Question 18
Complete
The law of demand is illustrated by a demand curve that is
Select one:
a. downward sloping and convex to origin
b. none of these
c. downward sloping and concave to origin
d. downward sloping
Question 19
Complete

Select one:
a. less than one year
b. during which all resources are variable
c. during which all resources are xed
d. during which at least one resource is xed
Question 20
Complete
If a rm is a natural monopoly, its
Select one:
a. long-run average cost declines and marginal cost rises over the full range of market demand
b. xed cost declines over the full range of market demand
c. long-run average cost declines over the full range of market demand
d. long-run average cost increases over the full range of market demand
Question 21
Complete

Select one:
a. a decrease in the price of the good
b. an increase in the price of a complementary good
c. a decrease in income
d. an increase in the price of a substitute good
Question 22
Complete
Economic pro t is de ned as
Select one:
a. total revenue plus implicit costs
b. total revenue minus implicit and explicit costs
c. total revenue plus explicit costs
d. total revenue minus implicit costs
Question 23
Complete

Select one:
a. natural resources, such as water, oil, and iron ore
b. money and other nancial assets
c. human creations used in the production process
d. the natural, unskilled abilities of people
Question 24
Complete
The law of demand says that the lower the price of a good, other things constant,
Select one:
a. the smaller the demand for that good
b. the larger the demand for that good
c. the smaller the quantity demanded of that good
d. the larger the quantity demanded of that good
Question 25
Complete

Select one:
b. The consumer will substitute apples for oranges
c. There is no substitution e ect because relative prices have remained constant.
Question 26
Complete
Select one:
a. BMW automobiles
b. insulin
c. Pepsi Cola
d. Hotdogs
Question 27
Complete

Select one:
b. General Motors increases its orders for steel.
d. A new economics professor is hired on campus.
Question 28
Complete
Scarcity
Select one:
a. applies when a resource is not freely available
b. exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants
c. All of the above are true
d. means that each society and each individual must make choices
Question 29
Complete

Select one:
a. information
b. market share
c. output
d. price
Question 30
Complete
If a 5% increase in price leads to an 8% decrease in quantity demanded, demand is
Select one:
a. unit elastic
b. inelastic
d. elastic
 

Started on Friday, 5 February 2021, 10:08 PM

State F
inished
Completed on Friday, 5 February 2021, 10:56 PM
Grade 13.00 o
ut of 15.00 (87%)
Question 1

Complete

Select one:
d. includes both explicit and implicit cost
Question 2

Complete
Select one:
a. berries
b. baker
c. our
d. ovens

Question 3

Complete

Economics is best dened as the study of how
Select one:
a. to make money
b. to eliminate the problem of scarce resources
c. Individuals decide to use scarce resources in an attempt to satisfy their unlimited wants
d. the government should deal with unemployment and ination
Question 4

Complete
Select one:
a. interest, prot, wages, and rent
b. prot, rent, interest, and wages
c. interest, wages, prot, and rent
d. rent, wages, interest, and prot

Question 5

Complete
Economic prot is dened as
Select one:
a. total revenue plus implicit costs
c. total revenue minus implicit costs
d. total revenue plus explicit costs
Question 6

Complete
Select one:
a. airlines
b. world commodity markets
c. automobile manufacturing
d. insurance

Question 7

Complete
The income eect of an increase in the price of backpacks (a normal good) is a(n)
Select one:
a. decrease in the demand for backpacks
b. increase in the demand for backpacks
c. increase in the quantity demanded of backpacks
d. decrease in the quantity demanded for backpacks
Question 8

Complete
Select one:

Question 9

Complete
Choices made by economic decision makers
Select one:
a. are government decisions only
b. occur infrequently
c. are the primary focus of economics
d. do not involve ordinary citizens
Question 1
0
Complete
Which of the following are implicit costs for a typical rm?
Select one:
a. insurance costs
b. electricity costs
c. opportunity costs of capital owned and used by the rm
d. cost of labor hired by the rm

Question 1
1
Complete
The law of diminishing returns explains why
Select one:
a. the production possibilities curve is bowed out
b. short-run MC and AVC curves are U-shaped
c. monopolies have a guaranteed prot margin
d. long run supply curves are downward sloping
Question 1
2
Complete
Select one:
a. maximize economic prot
b. maximize accounting prot
c. maximize total revenue
d. maximize normal prot

Question 1
3
Complete
Select one:
a. airline revenue will increase if supply increases
b. airline revenue will increase if supply decreases
c. a small change in price will cause a large shift in the demand curve
d. a large change in price will cause a small shift in the demand curve
Question 1
4
Complete
Which of the following is true in the short run at the output level where average total cost is at its minimum?
Select one:
a. Marginal cost equals average total cost.
b. Marginal cost equals average variable cost.
c. Average total cost equals average xed cost.
d. Average variable cost equals xed cost.

Question 1
5
Complete
Which of the following statements about the substitution eect of a price change is true?
Select one:
a. It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
b. It aects the consumer's ability, rather than willingness, to purchase a good.
c. It is caused by a change in relative prices.

d. It is usually equal to the income eect.
Question 1
6
Complete
Select one:
a. that rm will lose revenues because other rms will not follow
b. all consumers will be adversely aected
c. that rm will increase its revenues
d. others will follow

Question 1
7
Complete
Select one:
b. pollution will eventually destroy all life in the Great Lakes
c. water is necessary for humans' physical survival
d. water commands a very high price
Question 1
8
Complete
The eect of a decrease in the price of personal computers, other things constant, is likely to be best represented by which of the following?
Select one:
b. an upward movement on the demand curve
c. a downward movement on the demand curve

Question 1
9
Complete
Select one:
a. positive and increasing
b. positive and decreasing
c. negative and decreasing
Question 2
0
Complete
Select one:
a. is $5
b. is $8
c. is $40
d. is $100

Question 2
1
Complete
business were $50,000, and explicit costs were $10,000. Calculate Ernie's accounting prot
Select one:
a. 10000
b. 50000
c. 40000
d. 20000
Question 2
2
Complete

Select one:
a. the slope is constant, but the price elasticity varies
b. both the slope and price elasticity are constant
d. total revenues are constant

Question 2
3
Complete
Select one:
a. is the same as the perfect competitor's demand curve
b. is the same as its average revenue curve
d. is the same as its marginal revenue curve
Question 2
4
Complete
Select one:
a. long-run average cost declines over the full range of market demand
c. long-run average cost declines and marginal cost rises over the full range of market demand

Question 2
5
Complete
Select one:
a. constant costs
c. a downward sloping curve
d. constant returns to scale
Question 2
6
Complete
Select one:
a. during which all resources are variable
b. during which all resources are xed
c. during which at least one resource is xed
d. less than one year

Question 2
7
Complete
Explicit costs are
Select one:
a. the only cost considered in opportunity cost
b. not part of opportunity cost
c. exactly the same as implicit costs
d. actual monetary payments for resources purchased
Question 2
8
Complete
Select one:
a. General Motors increases its orders for steel.
b. Microsoft cuts back its hiring of new graduates.
c. A new economics professor is hired on campus.
d. Glow Electric disassembles one of its nuclear power plants.

Question 2
9
Complete
If a rm raises the price of its product, its total revenue will
Select one:
a. increase only if demand is price inelastic
b. remain constant, regardless of price elasticity of demand
c. increase only if demand is price elastic
d. always increase
Question 3
0
Complete
Along a linear demand curve, total revenue is maximized when demand is
Select one:
a. unit elastic
b. inelastic
c. elastic
d. perfectly elastic


Started on Saturday, 12 December 2020, 10:55 PM

State Finished
Completed on Saturday, 12 December 2020, 11:13 PM
Grade 15.00 out of 15.00 (100%)
Question 1
Complete
Select one:
a. there is freedom of entry and exit
c. there are barriers to entry
d. their products are highly di erentiated 
Question 2
Complete
Select one:
Question 3
Complete

Select one:
Question 4
Complete
Select one:
a. MR > AVC
b. MR = ATC
c. MC > MR
d. MR = MC
Question 5
Complete

Select one:
a. making the product available at a number of di erent locations
b. using packaging or advertising to create a special subjective image of the product in the consumer's mind
c. increasing the number of services that accompany the product
d. emphasizing that the product provides the same bene ts to consumers as the others on the market, even when it is really physically
di erent
Question 6
Complete
Select one:
a. 5
b. 4
c. -4
d. 3
Question 7
Complete

Select one:
a. monopolistic competition only
c. perfect competition and homogenous oligopoly
d. monopoly only
Question 8
Complete
Discretionary scal policy is policy that
Select one:
a. is an intentional change in taxation or government spending
b. applies to some states but not others
c. is developed in secret by the Government
d. applies to some industries but not others
Question 9
Complete

Select one:
Question 10
Complete
Select one:
a. detergents
b. computer chips
c. rewood
d. motorcycles
Question 11
Complete

Select one:
a. increases GDP less than an equal increase in government purchases
Question 12
Complete
Select one:
a. Both aggregate demand and aggregate supply decrease.
b. Aggregate demand increases and aggregate supply increases.
c. Aggregate demand increases and aggregate supply decreases.
d. Both aggregate demand and aggregate supply increase.
Question 13
Complete

Select one:
a. value added to the economy by intermediate goods and services minus original cost
b. market value of all goods and services produced by resources located in a country
c. total output of all goods and services produced by resources located in a country
d. market value of all nal goods and services produced by resources located in a country.
Question 14
Complete
Select one:
b. both aggregate supply and aggregate demand to smooth out business uctuations
d. aggregate demand to smooth out business uctuations
Question 15
Complete

A change in autonomous net taxes a ects the equilibrium quantity of GDP demanded
Select one:
a. in the same way as a change in autonomous planned investment
b. in the same way as a change in autonomous net exports
c. in the same way as a change in autonomous government purchases
d. only indirectly, by rst changing the level of disposable income
Question 16
Complete
What is the opportunity cost of holding money rather than some other nancial asset?
Select one:
a. the forgone interest income
b. the forgone utility
c. time
d. the forgone leisure
Question 17
Complete

Suppose that storage costs increase, so that rms decide to hold less output in inventory, other things constant. Which of the following is
true?
Select one:
a. consumption spending will decrease
b. investment will increase
c. consumption spending will increase
d. investment will decrease
Question 18
Complete
Select one:
a. a tax cut
b. a decrease in government purchases
c. the RBI decreasing the bank rate
d. an increase in reserve requirements
Question 19
Complete

wage to:
Select one:
a. Increase by 2%
b. Increase by 4%
c. Increase by 6%
d. Decrease by 10%
Question 20
Complete
Select one:
Question 21
Complete

Select one:
b. uncertainty about changes in relative prices causes a decrease in economic e ciency
d. economic e ciency increases because decision makers pay closer attention to changes in money prices
Question 22
Complete
Fiscal policy
Select one:
a. uses the Union government's powers of spending and taxation to a ect employment, the price level, and GDP
b. can a ect employment and prices, but not the level of GDP
c. can a ect employment and the level of GDP, but not the price level
d. uses the Union government's powers over the money supply and interest rates to a ect employment, the price level, and GDP
Question 23
Complete

Select one:
a. the marginal revenue curve lies above the average revenue curve
c. the marginal revenue curve lies below the demand curve
Question 24
Complete
Select one:
a. sunglasses worn on a summer vacation in Florida
b. pizzas bought at a restaurant
c. legal services hired by a public accounting rm
d. any good bought by a household, rather than a rm
Question 25
Complete

Select one:
a. 50
b. 75 percent
c. 400
d. 25 percent
Question 26
Complete
Select one:
a. on the demand curve at the quantity where combined marginal cost equals marginal revenue
b. on the demand curve where it intersects its marginal cost curve
Question 27
Complete

A cartel is
Select one:
a. an agreement among rival rms to set prices independently
d. a group of monopolistically competitive rms which charge the same price
Question 28
Complete
Select one:
a. low nominal interest rates are likely to result
b. nobody wants to work and earn income
c. the purchasing power of money is increasing
d. the purchasing power of money is decreasing
Question 29
Complete

Select one:
c. consumption in 2004
d. investment in 2005
Question 30
Complete
Which of the following would be included in this year's GDP?
Select one:
a. the used car Tracey sold to Justin
b. that bucket of Kentucky Fried Chicken you bought this Year
c. George Garcia's purchase of a shing rod and reel at a garage sale
d. one hundred shares of IBM stock that Tony Hanks bought this Year
 

State Finished
Grade 11.50 out of 15.00 (77%)
Question 1
Complete
Flag question
Question text
Select one:
a. airline revenue will increase if supply decreases
b. a small change in price will cause a large shift in the demand curve
c. a large change in price will cause a small shift in the demand curve
Question 2
Complete
Flag question
Question text
Perfectly competitive firms respond to changing market conditions by varying their
Select one:
a. information
b. market share
c. price
d. output
Question 3
Complete
Remove flag
Question text
In economics, capital is defined as
Select one:
a. natural resources, such as water, oil, and iron ore
b. money and other financial assets
c. the natural, unskilled abilities of people
d. human creations used in the production process
Question 4
Complete
Flag question
Question text
In perfect competition, if one firm raises its price,
Select one:
a. that firm will lose revenues because other firms will not follow
b. all consumers will be adversely affected
c. others will follow
d. that firm will increase its revenues
Question 5
Complete
Flag question
Question text
Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned $30,000
per year, to open up a store selling spot remover to Dalmatians. He invested $10,000 in the
store, which had been in savings earning 5 percent interest. This year's revenues in the new
business were $50,000, and explicit costs were $10,000. Calculate Ernie's accounting profit
Select one:
a. 20000
b. 10000
c. 40000
d. 50000
Question 6
Complete
Flag question
Question text
If a firm raises the price of its product, its total revenue will
Select one:
b. increase only if demand is price elastic
c. always increase
d. remain constant, regardless of price elasticity of demand
Question 7
Complete
Flag question
Question text
Economists assume that firms seek to
Select one:
a. maximize total revenue
b. maximize economic profit
c. maximize accounting profit
d. maximize normal profit
Question 8
Complete
Flag question
Question text
Economics is best defined as the study of how
Select one:
a. the government should deal with unemployment and inflation
d. to make money
Question 9
Complete
Flag question
Question text
Select one:
b. positive and decreasing
c. negative and increasing
d. negative and decreasing
Question 10
Complete
Flag question
Question text
Select one:
a. explicit costs
b. fixed costs
c. implicit costs
d. sunk costs
Question 11
Complete
Flag question
Question text
Which of the following is a short-run adjustment?
Select one:
a. Faced with increasing enrollment, a private college builds a new School of Business
building.
b. Because of staggering losses, three insurance companies exit the industry.
c. People's Bank hires two new tellers to meet increased demand for customer services.
d. Toyota builds an automobile plant in Kentucky.
Question 12
Complete
Flag question
Question text
Select one:
a. occur infrequently
b. do not involve ordinary citizens
c. are the primary focus of economics
d. are government decisions only
Question 13
Complete
Flag question
Question text
Michigan has an abundant supply of fresh water. However, an economist would consider it a
scarce resource because
Select one:
c. water commands a very high price
d. water is limited relative to people's unlimited wants
Question 14
Complete
Flag question
Question text
The respective payments for the resources of natural resources, labor, capital, and
entrepreneurial ability are
Select one:
a. profit, rent, interest, and wages
b. interest, wages, profit, and rent
c. interest, profit, wages, and rent
d. rent, wages, interest, and profit
Question 15
Complete
Flag question
Question text
Select one:
a. long run supply curves are downward sloping
c. monopolies have a guaranteed profit margin
d. the production possibilities curve is bowed out
Question 16
Complete
Flag question
Question text
Which of the following are implicit costs for a typical firm?
Select one:
a. electricity costs
b. cost of labor hired by the firm
c. insurance costs
d. opportunity costs of capital owned and used by the firm
Question 17
Complete
Flag question
Question text
Which of the following is true in the short run at the output level where average total cost is
at its minimum?
Select one:
a. Marginal cost equals average variable cost.
b. Marginal cost equals average total cost.
c. Average total cost equals average fixed cost.
d. Average variable cost equals fixed cost.
Question 18
Complete
Flag question
Question text
The effect of a decrease in the price of personal computers, other things constant, is likely to
be best represented by which of the following?
Select one:
a. a downward movement on the demand curve
b. a leftward shift of the demand curve
c. an upward movement on the demand curve
d. a rightward shift of the demand curve
Question 19
Complete
Flag question
Question text
If variable cost rises from $60 to $100 as output increases from 15 to 20 units, the marginal
cost of the twentieth unit
Select one:
a. is $8
b. is $40
c. is $5
d. is $100
Question 20
Complete
Flag question
Question text
Select one:
a. downward sloping and concave to origin
b. none of these
c. downward sloping
d. downward sloping and convex to origin
Question 21
Complete
Flag question
Question text
Because market price remains constant as a perfectly competitive firm expands output, each
firm faces
Select one:
a. constant costs
c. constant returns to scale
d. a downward sloping curve
Question 22
Complete
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Question text
Select one:
a. an increase in the price of a substitute good
b. a decrease in income
c. an increase in the price of a complementary good
d. a decrease in the price of the good
Question 23
Complete
Flag question
Question text
Select one:
a. includes implicit cost only
b. includes both explicit and implicit cost
c. includes explicit cost only
d. is equal to the market price of the resource
Question 24
Complete
Flag question
Question text
Which of the following is most likely to be a fixed resource for Paul's Country Fresh Pies,
Inc.?
Select one:
a. ovens
b. baker
c. berries
d. flour
Question 25
Complete
Flag question
Question text
The income effect of an increase in the price of backpacks (a normal good) is a(n)
Select one:
b. decrease in the quantity demanded for backpacks
c. increase in the demand for backpacks
d. decrease in the demand for backpacks
Question 26
Complete
Flag question
Question text
Select one:
a. inelastic
b. elastic
d. unit elastic
Question 27
Complete
Flag question
Question text
As a monopolist increases the quantity of output produced, what happens to price (P) and
marginal revenue (MR)?
Select one:
a. both P and MR decrease, but MR falls faster than P
b. P decreases, but MR is constant
c. both P and MR remain constant
d. P is constant, but MR decreases
Question 28
Complete
Flag question
Question text
Marginal product is defined as
Select one:
a. the increase in output that occurs when an additional unit of a resource is added, holding
all other resources constant
b. the increase in revenue that occurs when an additional unit of a resource is added
c. the increase in output that occurs when all resources are increased by the same
proportion
d. the amount of additional resources needed to increase output by one unit when all
resources are increased by the same amount
Question 29
Complete
Flag question
Question text
Select one:
a. the price elasticity is constant, but the slope varies
b. total revenues are constant
c. the slope is constant, but the price elasticity varies
d. both the slope and price elasticity are constant
Question 30
Complete
Flag question
Question text
Which of the following statements about the substitution effect of a price change is true?
Select one:
a. It affects the consumer's ability, rather than willingness, to purchase a good.
b. It is caused by a change in relative prices.
c. It is usually equal to the income effect.
d. It assumes that the consumer substitutes more expensive goods for cheaper ones when
income increases.
State Finished
Grade 13.00 out of 15.00 (87%)
Question 1
Complete
Flag question
Question text
If toy stores overestimate the demand for a toy in 2004 and, as a result, have an
unexpectedly large number of them on hand at the end of the year, the value of the
increased inventory of those toys will be counted as
Select one:
b. investment in 2004
Question 2
Complete
Flag question
Question text
If the inflation rate is higher than expected, which of the following groups in society would be
most likely to gain?
Select one:
a. persons holding large amounts of money
b. borrowers
c. persons on fixed incomes
d. lenders
Question 3
Complete
Flag question
Question text
The view that union wage demands may be a source of inflation would be best associated
with the
Select one:
a. demand pull view of inflation
b. cost push view of inflation
c. supply shock view of inflation
d. demand push view of inflation
Question 4
Complete
Flag question
Question text
Select one:
a. both aggregate supply and aggregate demand to smooth out business fluctuations
b. aggregate supply to smooth out business fluctuations
c. aggregate demand to stimulate the economy and aggregate supply to contract it
d. aggregate demand to smooth out business fluctuations
Question 5
Complete
Flag question
Question text
Select one:
Question 6
Complete
Flag question
Question text
During periods when the inflation rate fluctuates widely,
Select one:
a. uncertainty about changes in relative prices causes a decrease in economic efficiency
b. all relative prices increase at the same rate, leaving money prices constant
d. economic efficiency increases because decision makers pay closer attention to changes in
money prices
Question 7
Complete
Flag question
Question text
A firm could differentiate its product by all of the following means except one. Which is the
exception?
Select one:
a. using packaging or advertising to create a special subjective image of the product in the
consumer's mind
b. making the product available at a number of different locations
c. increasing the number of services that accompany the product
d. emphasizing that the product provides the same benefits to consumers as the others on
the market, even when it is really physically different
Question 8
Complete
Flag question
Question text
Which of the following is true about inflation?
Select one:
a. Inflation promotes social harmony by uniting people against the government.
b. Accurate anticipation of inflation is possible for everyone who is well informed about
economic events.
c. If people accurately anticipate inflation, their actions will prevent it.
d. Inflation is more damaging if it is unanticipated.
Question 9
Complete
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Question text
In periods of high inflation,
Select one:
c. nobody wants to work and earn income
d. the purchasing power of money is decreasing
Question 10
Complete
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Select one:
a. the interest rate rises
Question 11
Complete
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Question text
Which of the following would lead to the most inflation?
Select one:
a. Aggregate demand increases and aggregate supply increases.
b. Both aggregate demand and aggregate supply decrease.
c. Both aggregate demand and aggregate supply increase.
d. Aggregate demand increases and aggregate supply decreases.
Question 12
Complete
Flag question
Question text
If the MPC equals 0.75 and Government expenditure increases by $100, real GDP
demanded will increase by
Select one:
a. 25 percent
b. 400
c. 50
d. 75 percent
Question 13
Complete
Flag question
Question text
Inflation is
Select one:
a. a reduction in everyone's standard of living
b. a continuing rise in everyone's standard of living
c. a rise in the real prices of all goods and services
d. a general and continuous rise in the money prices of goods and services
Question 14
Complete
Flag question
Question text
Suppose that storage costs increase, so that firms decide to hold less output in inventory,
other things constant. Which of the following is true?
Select one:
a. consumption spending will increase
b. consumption spending will decrease
c. investment will increase
d. investment will decrease
Question 15
Complete
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Question text
Select one:
b. there are barriers to entry
c. their products are highly differentiated
d. all firms produce identical products
Question 16
Complete
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Question text
Select one:
a. sunglasses worn on a summer vacation in Florida
b. legal services hired by a public accounting firm
c. any good bought by a household, rather than a firm
d. pizzas bought at a restaurant
Question 17
Complete
Flag question
Question text
It is harder to explain the behavior of firms in oligopoly than in other market structures
because in oligopoly
Select one:
a. only differentiated products are produced
b. only homogeneous products are produced
c. firms base their decisions on what their rivals do
d. the firms act independently of each other
Question 18
Complete
Flag question
Question text
Discretionary fiscal policy is policy that
Select one:
a. applies to some states but not others
b. applies to some industries but not others
c. is developed in secret by the Government
d. is an intentional change in taxation or government spending
Question 19
Complete
Flag question
Question text
What is the opportunity cost of holding money rather than some other financial asset?
Select one:
a. the forgone leisure
b. the forgone interest income
c. time
d. the forgone utility
Question 20
Complete
Flag question
Question text
Gross Domestic Product includes final goods and services, but not intermediate goods
because
Select one:
a. intermediate goods are not part of investment spending
b. the value of the intermediate goods is already included in the value of the final goods
c. intermediate goods are only produced by government
Question 21
Complete
Flag question
Question text
A change in autonomous net taxes affects the equilibrium quantity of GDP demanded
Select one:
a. only indirectly, by first changing the level of disposable income
b. in the same way as a change in autonomous net exports
c. in the same way as a change in autonomous planned investment
d. in the same way as a change in autonomous government purchases
Question 22
Complete
Flag question
Question text
Select one:
b. one hundred shares of IBM stock that Tony Hanks bought this Year
c. George Garcia's purchase of a fishing rod and reel at a garage sale
d. that bucket of Kentucky Fried Chicken you bought this Year
Question 23
Complete
Flag question
Question text
A cartel's profit-maximizing price is
Select one:
a. on the demand curve at the quantity where combined marginal cost equals marginal
revenue
b. the highest price possible
d. on the demand curve where it intersects its marginal cost curve
Question 24
Complete
Flag question
Question text
Select one:
a. the marginal revenue curve lies below the demand curve
b. the marginal revenue curve lies above the demand curve
c. the marginal revenue curve lies above the average revenue curve
d. marginal revenue is equal to average revenue
Question 25
Complete
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Question text
Select one:
a. 5
b. -4
c. 3
d. 4
Question 26
Complete
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Question text
Select one:
Question 27
Complete
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Question text
Select one:
a. is unaffected
b. shifts to the left
c. becomes more elastic
d. shifts to the right
Question 28
Complete
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Question text
For firms in an oligopoly to be interdependent,
Select one:
a. goods must be undifferentiated and many sellers
b. firms must be small in size and selling differentiated goods
c. goods can be either undifferentiated or differentiated and there are few firms large in size
d. goods must be differentiated and few sellers
Question 29
Complete
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Question text
Demand-pull inflation is associated with
Select one:
a. increasing aggregate demand and lower unemployment
b. decreasing aggregate demand and lower unemployment
c. decreasing aggregate demand and greater unemployment
Question 30
Complete
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Question text
Monopolistically competitive firms ignore the effect of their decisions upon other firms in the
industry because
Select one:
a. each firm is large relative to the market
b. there are few sellers in the market
c. there is only one seller in the market
d. each firm is small relative to the market

State Finished
Grade 14.50 out of 15.00 (97%)
Question 1
Complete
Select one:
a. aggregate demand to smooth out business uctuations
b. both aggregate supply and aggregate demand to smooth out business uctuations

d. aggregate demand to stimulate the economy and aggregate supply to contract it
Question 2
Complete
Select one:
a. the marginal revenue curve lies above the demand curve
d. the marginal revenue curve lies above the average revenue curve
Question 3
Complete 
Select one:
a. 3
b. -4

c. 5
d. 4
Question 4
Complete
Select one:
a. 50
b. 25 percent
c. 400
d. 75 percent
Question 5
Complete 
Select one:
a. unique products
b. a homogeneous but unique product

c. di erentiated products
d. a homogeneous product
Question 6
Complete
Select one:
a. MR = MC
b. MR = ATC
c. MR > AVC
d. MC > MR
Question 7
Complete 
Select one:
a. the value of the intermediate goods is already included as inventory investment

d. intermediate goods are only produced by government
Question 8
Complete
Select one:
b. it would decrease by the amount of the price increase
d. it would decrease
Question 9
Complete
Select one:
Question 10
Complete 
Which of the following is true about in ation?
Select one:
a. If people accurately anticipate in ation, their actions will prevent it.
b. In ation is more damaging if it is unanticipated.

c. In ation promotes social harmony by uniting people against the government.
d. Accurate anticipation of in ation is possible for everyone who is well informed about economic events.
Question 11
Complete
In an oligopoly, the demand curve facing an individual rm depends upon
Select one:
b. the rm's supply curve
c. the behavior of competing rms
Question 12
Complete 
If the in ation rate is higher than expected, which of the following groups in society would be most likely to gain?
Select one:
a. persons holding large amounts of money
b. persons on xed incomes

c. borrowers
d. lenders
Question 13
Complete
Select one:
a. Joe pays a plumber $100 to x a broken pipe.
b. Jim purchases a new automobile.
c. Laurie pays $15 for a haircut.
d. Sandy, who is on welfare, receives $100 in food stamps.
Question 14
Complete 
Select one:
a. each rm is large relative to the market

c. there is only one seller in the market
Question 15
Complete
Select one:
c. the purchasing power of money is decreasing
d. nobody wants to work and earn income
Question 16
Complete
true?
Select one:
b. investment will decrease
d. investment will increase
Question 17
Complete
A cartel is
Select one:
b. a group of monopolistically competitive rms which charge the same price
c. a group of oligopolistic rms that engage in formal collusion
d. usually legal in India
Question 18
Complete 
Select one:

c. a decrease in the interest rate
d. an increase in real GDP
Question 19
Complete
Select one:
c. is an intentional change in taxation or government spending
d. is developed in secret by the Government
Question 20
Complete 
In ation is
Select one:
a. a continuing rise in everyone's standard of living
b. a rise in the real prices of all goods and services

c. a general and continuous rise in the money prices of goods and services
d. a reduction in everyone's standard of living
Question 21
Complete
Select one:
a. Money supply increases, the interest rate increases, and the aggregate demand increases
b. Money supply decreases, the investment decreases, and the aggregate demand increases
c. Money supply decreases, the interest rate decreases, and the aggregate demand falls
d. Money supply increases, investment increases, aggregate demand increases
Question 22
Complete 
Select one:
a. detergents
b. computer chips

c. motorcycles
d. rewood
Question 23
Complete
Select one:
a. any good bought by a household, rather than a rm
c. legal services hired by a public accounting rm
d. pizzas bought at a restaurant
Question 24
Complete
Select one:
a. consumption in 2004
Question 25
Complete
Select one:
a. the rms act independently of each other
b. rms base their decisions on what their rivals do
c. only di erentiated products are produced
d. only homogeneous products are produced
Question 26
Complete 
Which of the following would directly reduce GDP?
Select one:
a. The Resident Welfare Association of Primus Estates decides to lay-o local guards at the local swimming pool.
b. An unscrupulous disposal company dumps barrels of toxic waste near a suburban water supply.

c. Pollution of international waters increases.
d. The switch from home-cooked meals to restaurant meals lowers the nutritional value of the average diet.
Question 27
Complete
Select one:
c. monopoly only
Question 28
Complete 
Select one:
a. Aggregate demand increases and aggregate supply decreases.
b. Both aggregate demand and aggregate supply increase.

c. Both aggregate demand and aggregate supply decrease.
d. Aggregate demand increases and aggregate supply increases.
Question 29
Complete
Fiscal policy
Select one:
a. can a ect employment and prices, but not the level of GDP
b. uses the Union government's powers over the money supply and interest rates to a ect employment, the price level, and GDP
c. can a ect employment and the level of GDP, but not the price level
d. uses the Union government's powers of spending and taxation to a ect employment, the price level, and GDP
Question 30
Complete 
Select one:
a. Intermediate goods and services are excluded to prevent double counting.
b. It re ects production in a particular year.

c. It includes transfer payments.
d. It includes only nal goods and services.
 
State Finished
Grade 12.50 out of 15.00 (83%)
Question 1
Complete
Flag question
Question text

Select one:
a. restaurant meals
b. airline travel
c. soft drinks
d. used clothings
Question 2
Complete
Flag question
Question text

Select one:
b. downward sloping and convex to origin
c. downward sloping
d. none of these
Question 3
Complete
Flag question
Question text
As a monopolist increases the quantity of output produced, what happens to price (P) and
marginal revenue (MR)?
Select one:
b. both P and MR remain constant
Question 4
Complete
Flag question
Question text

Select one:
a. Faced with increasing enrollment, a private college builds a new School of Business
building.
b. Toyota builds an automobile plant in Kentucky.
c. Because of staggering losses, three insurance companies exit the industry.
d. People's Bank hires two new tellers to meet increased demand for customer services.
Question 5
Complete
Flag question
Question text

Select one:
a. during which all resources are fixed
b. less than one year
c. during which at least one resource is fixed
d. during which all resources are variable
Question 6
Complete
Flag question
Question text
Select one:
c. a leftward movement along the demand curve
Question 7
Complete
Flag question
Question text
Because market price remains constant as a perfectly competitive firm expands output, each firm
faces
Select one:
a. a horizontal demand curve
b. constant returns to scale
d. constant costs
Question 8
Complete
Flag question
Question text

Select one:
a. includes both explicit and implicit cost
c. includes explicit cost only
d. includes implicit cost only
Question 9
Complete
Flag question
Question text
If variable cost rises from $60 to $100 as output increases from 15 to 20 units, the marginal cost
of the twentieth unit
Select one:
a. is $5
b. is $40
c. is $8
d. is $100
Question 10
Complete
Flag question
Question text

Select one:
a. unit elastic
b. inelastic
d. elastic
Question 11
Complete
Flag question
Question text
Economics is best defined as the study of how

Select one:
a. to eliminate the problem of scarce resources
b. to make money
d. the government should deal with unemployment and inflation
Question 12
Complete
Flag question
Question text
If a firm is a natural monopoly, its

Select one:
a. long-run average cost increases over the full range of market demand
b. long-run average cost declines and marginal cost rises over the full range of market
demand
c. fixed cost declines over the full range of market demand
d. long-run average cost declines over the full range of market demand
Question 13
Complete
Flag question
Question text

Select one:
a. airline revenue will increase if supply increases
b. a large change in price will cause a small shift in the demand curve
d. airline revenue will increase if supply decreases
Question 14
Complete
Flag question
Question text

Select one:
a. unit elastic
b. elastic
d. inelastic
Question 15
Complete
Flag question
Question text
Michigan has an abundant supply of fresh water. However, an economist would consider it a
scarce resource because
Select one:
c. pollution will eventually destroy all life in the Great Lakes
Question 16
Complete
Flag question
Question text
Explicit costs are

Select one:
a. exactly the same as implicit costs
b. the only cost considered in opportunity cost
c. actual monetary payments for resources purchased
d. not part of opportunity cost
Question 17
Complete
Flag question
Question text
Select one:
a. airlines
d. insurance
Question 18
Complete
Flag question
Question text
Which of the following is true in the short run at the output level where average total cost is at its
minimum?
Select one:
a. Average total cost equals average fixed cost.
c. Marginal cost equals average total cost.
d. Average variable cost equals fixed cost.
Question 19
Complete
Flag question
Question text
The demand curve facing a perfectly competitive firm is

Select one:
a. unit elastic
b. perfectly elastic
c. perfectly inelastic
Question 20
Complete
Flag question
Question text
Which of the following is most likely to be a fixed resource for Paul's Country Fresh Pies, Inc.?
Select one:
a. baker
b. flour
c. ovens
d. berries
Question 21
Complete
Flag question
Question text

Select one:
b. lies above its average revenue curve
c. is the same as its marginal revenue curve
Question 22
Complete
Flag question
Question text
Which of the following are implicit costs for a typical firm?

Select one:
a. insurance costs
c. opportunity costs of capital owned and used by the firm
d. cost of labor hired by the firm
Question 23
Complete
Flag question
Question text

Select one:
a. A new economics professor is hired on campus.
d. Glow Electric disassembles one of its nuclear power plants.
Question 24
Complete
Flag question
Question text
Suppose there are only two goods, apples and oranges. What happens if the price of each good
increases by 15 percent?
Select one:
b. The consumer will substitute apples for oranges
c. There is no substitution effect because relative prices have remained constant.
Question 25
Complete
Flag question
Question text
The effect of a decrease in the price of personal computers, other things constant, is likely to be
best represented by which of the following?
Select one:
c. a rightward shift of the demand curve
Question 26
Complete
Flag question
Question text

Select one:
a. BMW automobiles
b. insulin
c. Pepsi Cola
d. Hotdogs
Question 27
Complete
Flag question
Question text
Select one:
a. It is usually equal to the income effect.
b. It assumes that the consumer substitutes more expensive goods for cheaper ones when
income increases.
c. It affects the consumer's ability, rather than willingness, to purchase a good.
d. It is caused by a change in relative prices.
Question 28
Complete
Flag question
Question text

Select one:
a. long run supply curves are downward sloping
b. the production possibilities curve is bowed out
c. monopolies have a guaranteed profit margin
d. short-run MC and AVC curves are U-shaped
Question 29
Complete
Flag question
Question text
Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned $30,000 per
year, to open up a store selling spot remover to Dalmatians. He invested $10,000 in the store,
which had been in savings earning 5 percent interest. This year's revenues in the new business
were $50,000, and explicit costs were $10,000. Calculate Ernie's accounting profit
Select one:
a. 10000
b. 20000
c. 40000
d. 50000
Question 30
Complete
Flag question
Question text

Select one:
a. sunk costs
b. explicit costs
c. fixed costs
d. implicit costs

State Finished
Grade 12.00 out of 15.00 (80%)
Question 1
Complete
Select one:
a. a decrease in government purchases
b. the RBI decreasing the bank rate
c. an increase in reserve requirements
d. a tax cut 
Question 2
Complete
Fiscal policy
Select one:
a. uses the Union government's powers over the money supply and interest rates to a ect employment, the price level, and GDP
b. can a ect employment and the level of GDP, but not the price level
c. uses the Union government's powers of spending and taxation to a ect employment, the price level, and GDP
d. can a ect employment and prices, but not the level of GDP
Question 3
Complete

Select one:
a. It includes transfer payments.
b. It includes only nal goods and services.
c. It re ects production in a particular year.
d. Intermediate goods and services are excluded to prevent double counting.
Question 4
Complete
Select one:
Question 5
Complete

Select one:
a. store of wealth
b. medium of exchange
c. standard of value
d. interest-bearing asset
Question 6
Complete
Select one:
a. that bucket of Kentucky Fried Chicken you bought this Year
b. the used car Tracey sold to Justin
Question 7
Complete

Select one:
b. is developed in secret by the Government
c. applies to some industries but not others
Question 8
Complete
Select one:
a. In ation is more damaging if it is unanticipated.
b. Accurate anticipation of in ation is possible for everyone who is well informed about economic events.
d. If people accurately anticipate in ation, their actions will prevent it.
Question 9
Complete

Select one:
Question 10
Complete
Select one:
a. motorcycles
b. rewood
c. detergents
d. computer chips
Question 11
Complete

true?
Select one:
a. investment will decrease
c. consumption spending will decrease
d. consumption spending will increase
Question 12
Complete
Select one:
Question 13
Complete

Select one:
b. increasing aggregate demand and greater unemployment
d. decreasing aggregate demand and lower unemployment
Question 14
Complete
Select one:
c. it would decrease by the amount of the price increase
Question 15
Complete

A cartel is
Select one:
b. usually legal in India
c. a group of monopolistically competitive rms which charge the same price
d. a group of oligopolistic rms that engage in formal collusion
Question 16
Complete
Select one:
a. rms must be small in size and selling di erentiated goods
b. goods must be di erentiated and few sellers
c. goods can be either undi erentiated or di erentiated and there are few rms large in size
Question 17
Complete

Select one:
a. uncertainty about changes in relative prices causes a decrease in economic e ciency
b. all money prices rise at the same rate, causing relative prices to increase
c. economic e ciency increases because decision makers pay closer attention to changes in money prices
d. all relative prices increase at the same rate, leaving money prices constant
Question 18
Complete
wage to:
Select one:
a. Increase by 6%
b. Increase by 4%
c. Decrease by 10%
d. Increase by 2%
Question 19
Complete

Select one:
c. only homogeneous products are produced
d. only di erentiated products are produced
Question 20
Complete
Select one:
d. is una ected
Question 21
Complete

Select one:
Question 22
Complete
Select one:
b. their products are highly di erentiated
c. all rms produce identical products
d. there are barriers to entry
Question 23
Complete

Select one:
b. intermediate goods are not part of investment spending
c. the value of the intermediate goods is already included in the value of the nal goods
Question 24
Complete
Select one:
Question 25
Complete

Select one:
a. 50
b. 75 percent
c. 25 percent
d. 400
Question 26
Complete
Select one:
b. the price level falls
d. nominal GDP rises
Question 27
Complete

Select one:
a. Laurie pays $15 for a haircut.
c. Sandy, who is on welfare, receives $100 in food stamps.
d. Joe pays a plumber $100 to x a broken pipe.
Question 28
Complete
Select one:
a. -4
b. 5
c. 3
d. 4
Question 29
Complete

Select one:
a. Money supply decreases, the interest rate decreases, and the aggregate demand falls
b. Money supply increases, the interest rate increases, and the aggregate demand increases
c. Money supply increases, investment increases, aggregate demand increases
Question 30
Complete
Select one:
a. time
c. the forgone utility
 

Started on Friday, 8 January 2021, 1:41 PM
State Finished
Completed on Friday, 8 January 2021, 2:08 PM
Grade 11.00 out of 15.00 (73%)
Question 1
Complete
Flag question
Question text
Suppose that storage costs increase, so that firms decide to hold less output in inventory, other
things constant. Which of the following is true?
Select one:
c. investment will increase
Question 2
Complete
Flag question
Question text
A cartel's profit-maximizing price is

Select one:
a. determined by using the cost-plus pricing model
b. on the demand curve at the quantity where combined marginal cost equals marginal
revenue
c. on the demand curve where it intersects its marginal cost curve
Question 3
Complete
Flag question
Question text
An oligopoly is characterized by
Select one:
a. few firms, which have control over market price
b. a large number of firms and no barriers to entry
c. a single firm and no barriers to entry
d. many firms and some barriers to entry
Question 4
Complete
Flag question
Question text
Monopolistically competitive firms ignore the effect of their decisions upon other firms in the
industry because
Select one:
a. there are few sellers in the market
b. there is only one seller in the market
c. each firm is large relative to the market
d. each firm is small relative to the market
Question 5
Complete
Flag question
Question text
If the MPC equals 0.75 and Government expenditure increases by $100, real GDP demanded
will increase by
Select one:
a. 50
b. 400
c. 25 percent
d. 75 percent
Question 6
Complete
Flag question
Question text

Select one:
b. the marginal revenue curve lies below the demand curve
c. the marginal revenue curve lies above the demand curve
d. marginal revenue is equal to average revenue
Question 7
Complete
Flag question
Question text
If future price changes were perfectly anticipated by both borrowers and lenders, what would
happen to the real interest rate in the future if the price level changed?
Select one:
a. it would decrease by the amount of the price increase
c. it would decrease
d. it would increase
Question 8
Complete
Flag question
Question text
Select one:
Question 9
Complete
Flag question
Question text
Which of the following would lead to the most inflation?

Select one:
a. Both aggregate demand and aggregate supply decrease.
b. Aggregate demand increases and aggregate supply decreases.
c. Aggregate demand increases and aggregate supply increases.
d. Both aggregate demand and aggregate supply increase.
Question 10
Complete
Flag question
Question text
If toy stores overestimate the demand for a toy in 2004 and, as a result, have an unexpectedly
large number of them on hand at the end of the year, the value of the increased inventory of those
toys will be counted as
Select one:
Question 11
Complete
Flag question
Question text
In periods of high inflation,

Select one:
b. the purchasing power of money is decreasing
c. nobody wants to work and earn income
d. the purchasing power of money is increasing
Question 12
Complete
Flag question
Question text

Select one:
a. changes GDP in an unpredictable manner
b. increases GDP less than an equal increase in government purchases
d. increases GDP as much as an equal decrease in government purchases
Question 13
Complete
Flag question
Question text

Select one:
b. both aggregate supply and aggregate demand to smooth out business fluctuations
c. aggregate supply to smooth out business fluctuations
d. aggregate demand to smooth out business fluctuations
Question 14
Complete
Flag question
Question text
Select one:
c. is unaffected
d. shifts to the left
Question 15
Complete
Flag question
Question text
Which of the following would directly reduce GDP?

Select one:
a. An unscrupulous disposal company dumps barrels of toxic waste near a suburban water
supply.
b. The Resident Welfare Association of Primus Estates decides to lay-off local guards at the
local swimming pool.
c. The switch from home-cooked meals to restaurant meals lowers the nutritional value of
the average diet.
d. Pollution of international waters increases.
Question 16
Complete
Flag question
Question text
In which market structure(s) might firms produce an undifferentiated product?

Select one:
b. monopoly only
c. perfect competition only
Question 17
Complete
Flag question
Question text

Select one:
a. interest-bearing asset
b. standard of value
c. medium of exchange
d. store of wealth
Question 18
Complete
Flag question
Question text
In an oligopoly, the demand curve facing an individual firm depends upon

Select one:
a. the shape of the firm's average total cost curve
b. the behavior of competing firms
c. the firm's supply curve
d. the shape of the firm's marginal cost curve
Question 19
Complete
Flag question
Question text
Monopolistic competition is different from perfect competition because monopolistic

competitors produce
Select one:
a. a homogeneous product
c. differentiated products
d. unique products
Question 20
Complete
Flag question
Question text
Demand-pull inflation is associated with

Select one:
a. decreasing aggregate demand and greater unemployment
b. increasing aggregate demand and lower unemployment
c. decreasing aggregate demand and lower unemployment
Question 21
Complete
Flag question
Question text

Select one:
b. any good bought by a household, rather than a firm
c. sunglasses worn on a summer vacation in Florida
d. legal services hired by a public accounting firm
Question 22
Complete
Flag question
Question text
Fiscal policy
Select one:
a. can affect employment and the level of GDP, but not the price level
b. uses the Union government's powers over the money supply and interest rates to affect
employment, the price level, and GDP
c. can affect employment and prices, but not the level of GDP
d. uses the Union government's powers of spending and taxation to affect employment, the
price level, and GDP
Question 23
Complete
Flag question
Question text
A cartel is
Select one:
a. an agreement among rival firms to set prices independently
b. a group of monopolistically competitive firms which charge the same price
d. a group of oligopolistic firms that engage in formal collusion
Question 24
Complete
Flag question
Question text
Gross Domestic Product includes final goods and services, but not intermediate goods because
Select one:
a. intermediate goods are not part of investment spending
b. intermediate goods are only produced by government
c. the value of the intermediate goods is already included as inventory investment
d. the value of the intermediate goods is already included in the value of the final goods
Question 25
Complete
Flag question
Question text
During periods when the inflation rate fluctuates widely,

Select one:
b. uncertainty about changes in relative prices causes a decrease in economic efficiency
d. economic efficiency increases because decision makers pay closer attention to changes in
money prices
Question 26
Complete
Flag question
Question text

Select one:
a. Jim purchases a new automobile.
b. Laurie pays $15 for a haircut.
d. Joe pays a plumber $100 to fix a broken pipe.
Question 27
Complete
Flag question
Question text

Select one:
a. the interest rate falls
b. the interest rate rises
c. nominal GDP rises
Question 28
Complete
Flag question
Question text

Select one:
b. one hundred shares of IBM stock that Tony Hanks bought this Year
c. George Garcia's purchase of a fishing rod and reel at a garage sale
d. that bucket of Kentucky Fried Chicken you bought this Year
Question 29
Complete
Flag question
Question text

Select one:
a. They equal the level of net taxes in equilibrium.
b. They are autonomous.
c. They vary directly with the level of income.
d. They vary directly with the interest rate.
Question 30
Complete
Flag question
Question text

Select one:
a. firewood
b. motorcycles
c. computer chips
d. detergents
Finish review
Started on Saturday, 28 November 2020, 9:10 PM

State Finished
Completed on Saturday, 28 November 2020, 9:39 PM
Grade 14.50 out of 15.00 (97%)
Question 1
Complete
Select one:
b. a leftward shift of the demand curve
c. a rightward shift of the demand curve

d. a downward movement on the demand curve
Question 2
Complete
Select one:
a. The consumer will substitute apples for oranges
b. The consumer will substitute oranges for apples.
d. Demand for both goods increases.
Question 3
Complete 
Select one:
a. Average total cost equals average xed cost.
b. Average variable cost equals xed cost.

c. Marginal cost equals average total cost.
d. Marginal cost equals average variable cost.
Question 4
Complete
Select one:
a. maximize normal pro t
c. maximize economic pro t
d. maximize accounting pro t
Question 5
Complete 
Select one:
b. downward sloping

c. none of these
Question 6
Complete
Select one:
a. that rm will increase its revenues
b. that rm will lose revenues because other rms will not follow
c. others will follow
d. all consumers will be adversely a ected
Question 7
Complete 
Select one:
b. It a ects the consumer's ability, rather than willingness, to purchase a good.

c. It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
d. It is usually equal to the income e ect.
Question 8
Complete
Select one:
a. average output per worker
b. change in revenue from using one more unit of labor
c. change in output from using one more unit of labor
d. cost of one worker
Question 9
Complete 
Select one:
a. is $40
b. is $8

c. is $100
d. is $5
Question 10
Complete
Select one:
a. an increase in the price of a complementary good
b. an increase in the price of a substitute good
c. a decrease in income
Question 11
Complete 
Select one:
a. output
b. market share

c. information
d. price
Question 12
Complete
Select one:
a. insurance costs
b. cost of labor hired by the rm
d. electricity costs
Question 13
Complete 
Select one:
a. average xed cost rises
b. marginal cost rises

c. average total cost must rise
d. average variable cost is constant
Question 14
Complete
Select one:
a. The time period is relatively short
b. There are few substitutes
c. The time period is relatively long
d. The good is considered a necessity
Question 15
Complete
Select one:
a. 10000
b. 40000
c. 50000
d. 20000
Question 16
Complete
Select one:
a. pro t, rent, interest, and wages
b. interest, pro t, wages, and rent
c. rent, wages, interest, and pro t
d. interest, wages, pro t, and rent
Question 17
Complete 
Select one:

d. long-run average cost declines and marginal cost rises over the full range of market demand
Question 18
Complete
Select one:
a. unit elastic
c. inelastic
d. elastic
Question 19
Complete 
Select one:

d. pollution will eventually destroy all life in the Great Lakes
Question 20
Complete
Select one:
Question 21
Complete 
Economics is best de ned as the study of how
Select one:
b. the government should deal with unemployment and in ation

c. to make money
d. Individuals decide to use scarce resources in an attempt to satisfy their unlimited wants
Question 22
Complete
Explicit costs are
Select one:
a. actual monetary payments for resources purchased
b. not part of opportunity cost
c. the only cost considered in opportunity cost
d. exactly the same as implicit costs
Question 23
Complete 
Select one:
a. positive and decreasing

c. negative and increasing
Question 24
Complete
Select one:
a. steep
b. highly inelastic
c. horizontal
d. upward sloping
Question 25
Complete 
Select one:
a. the increase in output that occurs when an additional unit of a resource is added, holding all other resources constant
b. the increase in output that occurs when all resources are increased by the same proportion

c. the increase in revenue that occurs when an additional unit of a resource is added
d. the amount of additional resources needed to increase output by one unit when all resources are increased by the same amount
Question 26
Complete
Select one:
a. elastic
b. unit elastic
d. inelastic
Question 27
Complete 
Select one:
a. P decreases, but MR is constant
b. both P and MR remain constant

c. both P and MR decrease, but MR falls faster than P
Question 28
Complete
Select one:
a. restaurant meals
b. airline travel
c. used clothings
d. soft drinks
Question 29
Complete 
Select one:
a. homogeneous product
b. control over key patents

c. economies of scale
d. control of an essential resource
Question 30
Complete
Select one:
a. People's Bank hires two new tellers to meet increased demand for customer services.
c. Toyota builds an automobile plant in Kentucky.
d. Faced with increasing enrollment, a private college builds a new School of Business building.
  
Started on Friday, 27 November 2020, 2:37 PM
State Finished
Completed on Friday, 27 November 2020, 3:19 PM
Grade 12.50 out of 15.00 (83%)
Question 1
Complete
Flag question
Question text
Marginal product is defined as
Select one:
a. the amount of additional resources needed to increase output by one unit when all resources are increased by the
same amount
c. the increase in output that occurs when an additional unit of a resource is added, holding all other resources
constant
d. the increase in revenue that occurs when an additional unit of a resource is added
Question 2
Complete
Flag question
Question text
Select one:
b. It affects the consumer's ability, rather than willingness, to purchase a good.
c. It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
d. It is usually equal to the income effect.
Question 3
Complete
Flag question
Question text
Economic profit is defined as
Select one:
a. total revenue minus implicit costs
c. total revenue plus implicit costs
d. total revenue plus explicit costs
Question 4
Complete
Flag question
Question text
Select one:
a. a decrease in the price of the good
c. an increase in the price of a substitute good
d. a decrease in income
Question 5
Complete
Flag question
Question text
Select one:
c. is equal to the market price of the resource
d. includes implicit cost only
Question 6
Complete
Flag question
Question text
If a firm is a natural monopoly, its
Select one:
a. long-run average cost declines over the full range of market demand
b. fixed cost declines over the full range of market demand
c. long-run average cost increases over the full range of market demand
d. long-run average cost declines and marginal cost rises over the full range of market demand
Question 7
Complete
Flag question
Question text
Suppose there are only two goods, apples and oranges. What happens if the price of each good increases by 15
percent?
Select one:
a. The consumer will substitute apples for oranges
c. There is no substitution effect because relative prices have remained constant.
Question 8
Complete
Flag question
Question text
Select one:
a. fixed costs
b. implicit costs
c. explicit costs
d. sunk costs
Question 9
Complete
Flag question
Question text
Select one:
a. is a resource
c. is physical and tangible
d. is desirable
Question 10
Complete
Flag question
Question text
Select one:
b. average output per worker
c. cost of one worker
Question 11
Complete
Flag question
Question text
Select one:
a. interest, wages, profit, and rent
b. interest, profit, wages, and rent
c. rent, wages, interest, and profit
d. profit, rent, interest, and wages
Question 12
Complete
Flag question
Question text
Select one:
a. restaurant meals
b. soft drinks
c. used clothings
d. airline travel
Question 13
Complete
Flag question
Question text
The effect of a decrease in the price of personal computers, other things constant, is likely to be best represented by
which of the following?
Select one:
d. a downward movement on the demand curve
Question 14
Complete
Flag question
Question text
Select one:
a. the larger the quantity demanded of that good
b. the smaller the demand for that good
c. the larger the demand for that good
d. the smaller the quantity demanded of that good
Question 15
Complete
Flag question
Question text
Explicit costs are
Select one:
a. exactly the same as implicit costs
b. the only cost considered in opportunity cost
c. actual monetary payments for resources purchased
d. not part of opportunity cost
Question 16
Complete
Flag question
Question text
Select one:
b. airline revenue will increase if supply increases
Question 17
Complete
Flag question
Question text
The income effect of an increase in the price of backpacks (a normal good) is a(n)
Select one:
a. increase in the demand for backpacks
b. decrease in the demand for backpacks
c. increase in the quantity demanded of backpacks
d. decrease in the quantity demanded for backpacks
Question 18
Complete
Flag question
Question text
Select one:
a. upward sloping
b. horizontal
c. highly inelastic
d. steep
Question 19
Complete
Flag question
Question text
Select one:
a. Average variable cost equals fixed cost.
c. Average total cost equals average fixed cost.
d. Marginal cost equals average total cost.
Question 20
Complete
Flag question
Question text
Perfectly competitive firms respond to changing market conditions by varying their
Select one:
a. price
b. market share
c. output
d. information
Question 21
Complete
Flag question
Question text
Select one:
c. is the same as the perfect competitor's demand curve
d. lies above its average revenue curve
Question 22
Complete
Flag question
Question text
Economists assume that firms seek to
Select one:
a. maximize economic profit
c. maximize accounting profit
d. maximize normal profit
Question 23
Complete
Flag question
Question text
Select one:
a. inelastic
b. unit elastic
d. elastic
Question 24
Complete
Flag question
Question text
Scarcity
Select one:
a. exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants
b. applies when a resource is not freely available
c. All of the above are true
d. means that each society and each individual must make choices
Question 25
Complete
Flag question
Question text
The demand curve facing a perfectly competitive firm is
Select one:
a. perfectly elastic
b. unit elastic
Question 26
Complete
Flag question
Question text
Select one:
a. Microsoft cuts back its hiring of new graduates.
c. Glow Electric disassembles one of its nuclear power plants.
Question 27
Complete
Flag question
Question text
Select one:
a. elastic
b. inelastic
d. unit elastic
Question 28
Complete
Flag question
Question text
Select one:
Question 29
Complete
Flag question
Question text
In perfect competition, if one firm raises its price,
Select one:
b. that firm will increase its revenues
c. all consumers will be adversely affected
d. that firm will lose revenues because other firms will not follow
Question 30
Complete
Flag question
Question text
Because market price remains constant as a perfectly competitive firm expands output, each firm faces
Select one:
a. a downward sloping curve
c. constant returns to scale
d. constant costs
Started on Wednesday, 25 November 2020, 7:31 AM

State Finished
Completed on Wednesday, 25 November 2020, 7:57 AM
Grade 14.00 out of 15.00 (93%)
Question 1
Complete
Select one:
a. Faced with increasing enrollment, a private college builds a new School of Business building.
b. Toyota builds an automobile plant in Kentucky.
d. Because of staggering losses, three insurance companies exit the industry.
Question 2
Complete
Select one:
a. insulin
b. Hotdogs
c. Pepsi Cola
d. BMW automobiles
Question 3
Complete
Select one: 
b. maximize economic pro t
c. maximize accounting pro t
d. maximize total revenue
Question 4
Complete
Select one:
b. perfectly inelastic
c. unit elastic
Question 5
Complete
Select one: 
c. airline revenue will increase if supply increases
Question 6
Complete
Select one:
a. average variable cost is constant
b. average xed cost rises
c. marginal cost rises
d. average total cost must rise
Question 7
Complete
Select one: 
a. The consumer will substitute oranges for apples.
b. There is no substitution e ect because relative prices have remained constant.
Question 8
Complete
Select one:
a. soft drinks
b. airline travel
c. restaurant meals
d. used clothings
Question 9
Complete
Select one: 
a. a decrease in income
c. an increase in the price of a substitute good
Question 10
Complete
Select one:
a. the amount of additional resources needed to increase output by one unit when all resources are increased by the same amount
b. the increase in output that occurs when an additional unit of a resource is added, holding all other resources constant
c. the increase in output that occurs when all resources are increased by the same proportion
Question 11
Complete
Select one: 
a. negative and increasing
b. negative and decreasing
d. positive and increasing
Question 12
Complete
Select one:
a. long-run average cost declines and marginal cost rises over the full range of market demand
Question 13
Complete
Select one: 
a. cost of labor hired by the rm
d. insurance costs
Question 14
Complete
Select one:
Question 15
Complete
Select one: 
a. horizontal
b. steep
c. highly inelastic
d. upward sloping
Question 16
Complete
Select one:
a. economies of scale
b. homogeneous product
c. control of an essential resource
d. control over key patents
Question 17
Complete
Select one: 
a. downward sloping
b. downward sloping and concave to origin
c. none of these
Question 18
Complete
Select one:
a. short-run MC and AVC curves are U-shaped
b. monopolies have a guaranteed pro t margin
c. long run supply curves are downward sloping
Question 19
Complete
Economics is best de ned as the study of how
Select one: 
b. to make money
d. the government should deal with unemployment and in ation
Question 20
Complete
The income e ect of an increase in the price of backpacks (a normal good) is a(n)
Select one:
a. decrease in the demand for backpacks
b. increase in the quantity demanded of backpacks
c. decrease in the quantity demanded for backpacks
d. increase in the demand for backpacks
Question 21
Complete
Select one: 
b. Microsoft cuts back its hiring of new graduates.
c. General Motors increases its orders for steel.
Question 22
Complete
Select one:
a. are the primary focus of economics
c. are government decisions only
Question 23
Complete
Economic pro t is de ned as
Select one: 
a. total revenue plus explicit costs
c. total revenue minus implicit costs
d. total revenue plus implicit costs
Question 24
Complete
Select one:
a. The time period is relatively long
b. There are few substitutes
c. The good is considered a necessity
d. The time period is relatively short
Question 25
Complete
Select one: 
a. price
b. market share
c. output
d. information
Question 26
Complete
Select one:
b. P is constant, but MR decreases
d. both P and MR remain constant
Question 27
Complete
Select one: 
a. It a ects the consumer's ability, rather than willingness, to purchase a good.
b. It is caused by a change in relative prices.
c. It is usually equal to the income e ect.
d. It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
Question 28
Complete
Select one:
a. unit elastic
b. inelastic
d. elastic
Question 29
Complete
Select one: 
a. is equal to the market price of the resource
d. includes explicit cost only
Question 30
Complete
Select one:
a. constant costs
b. a downward sloping curve
c. a horizontal demand curve
 
Started on Friday, 27 November 2020, 4:58 PM

State Finished
Completed on Friday, 27 November 2020, 5:25 PM
Grade 15.00 out of 15.00 (100%)
Question 1
Complete
Select one:
a. General Motors increases its orders for steel.
b. A new economics professor is hired on campus.

c. Glow Electric disassembles one of its nuclear power plants.
d. Microsoft cuts back its hiring of new graduates.
Question 2
Complete
Select one:
a. opportunity costs of capital owned and used by the rm
b. cost of labor hired by the rm
c. electricity costs
d. insurance costs
Question 3

Complete
Select one:
a. is the same as its marginal revenue curve
b. lies above its average revenue curve
c. is the same as its average revenue curve
Question 4
Complete
Select one:
b. airline revenue will increase if supply increases
d. a small change in price will cause a large shift in the demand curve
Question 5

Complete
Select one:
a. how the human race di ers from other species
b. how individuals and nations deal with the problem of scarcity
c. role that money plays in the economy
d. how individuals amass personal fortunes in the stock market
Question 6
Complete
Select one:
a. Average total cost equals average xed cost.
c. Average variable cost equals xed cost.
Question 7

Complete
Select one:
a. upward sloping
b. horizontal
c. highly inelastic
d. steep
Question 8
Complete
Select one:
a. market share
b. information
c. output
d. price
Question 9

Complete
If a rm raises the price of its product, its total revenue will
Select one:
a. increase only if demand is price elastic
b. always increase
c. increase only if demand is price inelastic
d. remain constant, regardless of price elasticity of demand
Question 10
Complete
Select one:
a. There is no substitution e ect because relative prices have remained constant.
Question 11

Complete
Select one:
b. long-run average cost declines and marginal cost rises over the full range of market demand
c. xed cost declines over the full range of market demand
d. long-run average cost declines over the full range of market demand
Question 12
Complete
Select one:
a. BMW automobiles
b. insulin
c. Pepsi Cola
d. Hotdogs
Question 13

Complete
Select one:
a. There are few substitutes
b. The time period is relatively long
c. The good is considered a necessity
d. The time period is relatively short
Question 14
Complete
Select one:
Question 15

Complete
Select one:
a. interest, wages, pro t, and rent
b. rent, wages, interest, and pro t
c. interest, pro t, wages, and rent
d. pro t, rent, interest, and wages
Question 16
Complete
Select one:
a. the increase in revenue that occurs when an additional unit of a resource is added
c. the amount of additional resources needed to increase output by one unit when all resources are increased by the same amount
d. the increase in output that occurs when an additional unit of a resource is added, holding all other resources constant
Question 17

Complete
Select one:
b. average output per worker
c. cost of one worker
Question 18
Complete
Select one:
a. is $40
b. is $5
c. is $8
d. is $100
Question 19

Complete
Select one:
b. the slope is constant, but the price elasticity varies
d. total revenues are constant
Question 20
Complete
Scarcity
Select one:
a. All of the above are true
b. exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants
c. means that each society and each individual must make choices
d. applies when a resource is not freely available
Question 21

Complete
Select one:
a. 40000
b. 20000
c. 10000
d. 50000
Question 22
Complete
Select one:
Question 23

Complete
Select one:
a. are the primary focus of economics
c. are government decisions only
Question 24
Complete
Select one:
a. the natural, unskilled abilities of people
c. human creations used in the production process
Question 25

Complete
Select one:
a. short-run MC and AVC curves are U-shaped
b. long run supply curves are downward sloping
c. monopolies have a guaranteed pro t margin
Question 26
Complete
Select one:
a. insurance
d. airlines
Question 27

Complete
Select one:
b. unit elastic
c. inelastic
d. elastic
Question 28
Complete
Select one:
b. a decrease in income
c. a decrease in the price of the good
d. an increase in the price of a complementary good
Question 29

Complete
Select one:
a. a horizontal demand curve
b. constant costs
Question 30
Complete
Select one:
b. identical to the industry demand curve
d. unit elastic

 
Assignment - 1: Attempt review https://slm.imtcdl.ac.in/moodle/mod/quiz/review.php?attempt=8289&cm...
1 of 9 11/29/2020, 10:56 AM
2 of 9 11/29/2020, 10:56 AM
3 of 9 11/29/2020, 10:56 AM
4 of 9 11/29/2020, 10:56 AM
5 of 9 11/29/2020, 10:56 AM
6 of 9 11/29/2020, 10:56 AM
7 of 9 11/29/2020, 10:56 AM
8 of 9 11/29/2020, 10:56 AM
9 of 9 11/29/2020, 10:56 AM
Started on Sunday, 29 November 2020, 11:39 AM

State Finished
Grade 14.00 out of 15.00 (93%)
Question 1
Complete
Select one:
a. Average variable cost equals fixed cost.
c. Average total cost equals average fixed cost.
Question 2
Complete
Select one:
a. monopolies have a guaranteed profit margin
c. long run supply curves are downward sloping
Question 3
Complete
Select one:
Question 4
Complete
If a firm raises the price of its product, its total revenue will
Select one:
a. increase only if demand is price elastic
b. remain constant, regardless of price elasticity of demand
c. always increase
d. increase only if demand is price inelastic
Question 5
Complete
Economists assume that firms seek to
Select one:
a. maximize total revenue
b. maximize accounting profit
c. maximize economic profit
d. maximize normal profit
Question 6
Complete
Which of the following statements about the substitution effect of a price change is true?
Select one:
a. It affects the consumer's ability, rather than willingness, to purchase a good.
b. It assumes that the consumer substitutes more expensive goods for cheaper ones when income increases.
c. It is caused by a change in relative prices.
d. It is usually equal to the income effect.
Question 7
Complete
The demand curve facing a perfectly competitive firm is
Select one:
b. perfectly inelastic
c. identical to the industry demand curve
d. unit elastic
Question 8
Complete
Select one:
a. sunk costs
b. explicit costs
c. implicit costs
d. fixed costs
Question 9
Complete
Select one:
c. There is no substitution effect because relative prices have remained constant.
d. The consumer will substitute apples for oranges
Question 10
Complete
Select one:
a. during which all resources are variable
b. less than one year
c. during which at least one resource is fixed
d. during which all resources are fixed
Question 11
Complete
Select one:
b. water is limited relative to people's unlimited wants
d. water is necessary for humans' physical survival
Question 12
Complete
Select one:
a. the larger the demand for that good
b. the smaller the quantity demanded of that good
c. the smaller the demand for that good
d. the larger the quantity demanded of that good
Question 13
Complete
Select one:
a. includes implicit cost only
c. is equal to the market price of the resource
Question 14
Complete
Select one:
a. total revenues are constant
b. the slope is constant, but the price elasticity varies
c. both the slope and price elasticity are constant
d. the price elasticity is constant, but the slope varies
Question 15
Complete
Select one:
a. unit elastic
c. inelastic
d. elastic
Question 16
Complete
Economic profit is defined as
Select one:
b. total revenue plus explicit costs
c. total revenue minus implicit and explicit costs
d. total revenue plus implicit costs
Question 17
Complete
In perfect competition, if one firm raises its price,
Select one:
b. all consumers will be adversely affected
c. that firm will increase its revenues
d. that firm will lose revenues because other firms will not follow
Question 18
Complete
Select one:
a. inelastic
b. unit elastic
c. elastic
Question 19
Complete
Select one:
c. is the same as the perfect competitor's demand curve
d. lies above its average revenue curve
Question 20
Complete
Scarcity
Select one:
a. means that each society and each individual must make choices
b. applies when a resource is not freely available
c. exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants
d. All of the above are true
Question 21
Complete
Economics is best defined as the study of how
Select one:
a. to make money
b. Individuals decide to use scarce resources in an attempt to satisfy their unlimited wants
c. to eliminate the problem of scarce resources
d. the government should deal with unemployment and inflation
Question 22
Complete
Select one:
a. interest, wages, profit, and rent
b. profit, rent, interest, and wages
c. rent, wages, interest, and profit
d. interest, profit, wages, and rent
Question 23
Complete
Select one:
a. is $100
b. is $8
c. is $5
d. is $40
Question 24
Complete
Select one:
Question 25
Complete
Select one:
a. horizontal
b. steep
c. highly inelastic
d. upward sloping
Question 26
Complete
Suppose Ernie gives up his job as financial advisor for P.E.T.S., at which he earned $30,000 per year, to open up a store selling spot
remover to Dalmatians. He invested $10,000 in the store, which had been in savings earning 5 percent interest. This year's revenues in the
new business were $50,000, and explicit costs were $10,000. Calculate Ernie's accounting profit
Select one:
a. 50000
b. 10000
c. 40000
d. 20000
Question 27
Complete
Perfectly competitive firms respond to changing market conditions by varying their
Select one:
a. price
b. information
c. output
d. market share
Question 28
Complete
Select one:
Question 29
Complete
Select one:
a. none of these
b. downward sloping and concave to origin
c. downward sloping
Question 30
Complete
Select one:
a. is desirable
c. is a resource
d. is physical and tangible
Started on Wednesday, 25 November 2020, 1:57 PM
State Finished
Completed on Wednesday, 25 November 2020, 2:46 PM
Grade 13.00 out of 15.00 (87%)
Question 1
Complete
Mark 0.00 out Select one:

of 0.50
a. automobile manufacturing
c. insurance
d. airlines
Question 2 Scarcity

Complete
of 0.50
a. exists because people have wants that are unlimited relative to the availability of resources to satisfy those wants
b. All of the above are true
c. means that each society and each individual must make choices
d. applies when a resource is not freely available
Question 3 Which of the following is most likely to be a xed resource for Paul's Country Fresh Pies, Inc.?
Complete
of 0.50
a. our
b. ovens

c. baker
d. berries
Question 4 The law of demand says that the lower the price of a good, other things constant,
Complete
of 0.50
a. the smaller the demand for that good
b. the larger the demand for that good
c. the larger the quantity demanded of that good
d. the smaller the quantity demanded of that good
Question 5 Choices made by economic decision makers

Complete
of 0.50
a. occur infrequently
b. are the primary focus of economics
c. do not involve ordinary citizens 
d. are government decisions only
Question 6 Which of the following will cause the demand curve for a normal good to shift to the right?
Complete
of 0.50
b. a decrease in the price of the good
c. an increase in the price of a complementary good
d. a decrease in income

Question 7 Suppose there are only two goods, apples and oranges. What happens if the price of each good increases by 15 percent?
Complete
of 0.50
d. The consumer will substitute apples for oranges
Question 8 The demand curve facing a perfectly competitive rm is

Complete
of 0.50
b. unit elastic
c. perfectly inelastic 
Question 9 The demand curve facing a single-price monopolist

Complete
of 0.50
a. is the same as its marginal revenue curve
b. is the same as the perfect competitor's demand curve
d. is the same as its average revenue curve

Question 10 Which of the following is a long-run adjustment?
Complete
of 0.50
a. A new economics professor is hired on campus.
b. Glow Electric disassembles one of its nuclear power plants.
c. General Motors increases its orders for steel.
d. Microsoft cuts back its hiring of new graduates.
Question 11 The e ect of a decrease in the price of personal computers, other things constant, is likely to be best represented by which of
Complete the following?
Mark 0.50 out
of 0.50 Select one:
b. a downward movement on the demand curve
c. an upward movement on the demand curve

Question 12 Which of the following is a short-run adjustment?

Complete
of 0.50
a. Faced with increasing enrollment, a private college builds a new School of Business building.
d. Toyota builds an automobile plant in Kentucky.

Question 13 Which of the following statements is true? If the marginal product of labor diminishes,
Complete
of 0.50
a. marginal cost rises
b. average xed cost rises
c. average variable cost is constant
d. average total cost must rise
Question 14 Suppose Ernie gives up his job as nancial advisor for P.E.T.S., at which he earned $30,000 per year, to open up a store selling
Complete spot remover to Dalmatians. He invested $10,000 in the store, which had been in savings earning 5 percent interest. This year's
Mark 0.50 out revenues in the new business were $50,000, and explicit costs were $10,000. Calculate Ernie's accounting pro t
of 0.50
Select one:
a. 50000
b. 40000 
c. 10000
d. 20000
Question 15 Economic pro t is de ned as

Complete
of 0.50
b. total revenue plus explicit costs
c. total revenue plus implicit costs
d. total revenue minus implicit and explicit costs

Question 16 Which of the following is not a barrier to entry which leads to monopoly power.
Complete
of 0.50
a. economies of scale
b. control of an essential resource
c. control over key patents
d. homogeneous product
Question 17 If variable cost rises from $60 to $100 as output increases from 15 to 20 units, the marginal cost of the twentieth unit
Complete
of 0.50
a. is $5
b. is $8
c. is $40 
d. is $100
Question 18 The income e ect of an increase in the price of backpacks (a normal good) is a(n)
Complete
of 0.50
b. increase in the demand for backpacks
c. decrease in the quantity demanded for backpacks
d. decrease in the demand for backpacks

Question 19 Economics is best de ned as the study of how
Complete
of 0.50
a. Individuals decide to use scarce resources in an attempt to satisfy their unlimited wants
c. the government should deal with unemployment and in ation
d. to make money
Question 20 At the point where diminishing marginal returns set in, the slope of the total product curve is
Complete
of 0.50
c. positive and increasing 
d. positive and decreasing
Question 21 Along a linear demand curve, total revenue is maximized when demand is
Complete
of 0.50
a. elastic
c. unit elastic
d. inelastic

Question 22 Economists assume that rms seek to
Complete
of 0.50
c. maximize accounting pro t
d. maximize economic pro t
Question 23 The opportunity cost of a resource

Complete
of 0.50
b. includes implicit cost only
c. includes both explicit and implicit cost 
Question 24 Which of the following is true in the short run at the output level where average total cost is at its minimum?
Complete
of 0.50
a. Average variable cost equals xed cost.
b. Average total cost equals average xed cost.
c. Marginal cost equals average variable cost.
d. Marginal cost equals average total cost.

Question 25 In economics, capital is de ned as
Complete
of 0.50
a. human creations used in the production process
c. the natural, unskilled abilities of people
Question 26 Michigan has an abundant supply of fresh water. However, an economist would consider it a scarce resource because
Complete
of 0.50
c. water is limited relative to people's unlimited wants 
Question 27 If a 5% increase in price leads to an 8% decrease in quantity demanded, demand is

Complete
of 0.50
a. unit elastic
b. inelastic
c. elastic

Question 28 If a rm raises the price of its product, its total revenue will
Complete
of 0.50
b. increase only if demand is price elastic
c. remain constant, regardless of price elasticity of demand
d. always increase
Question 29 Marginal product is de ned as

Complete
of 0.50
a. the increase in output that occurs when an additional unit of a resource is added, holding all other resources constant
c. the amount of additional resources needed to increase output by one unit when all resources are increased by the same
amount

Question 30 The respective payments for the resources of natural resources, labor, capital, and entrepreneurial ability are
Complete
of 0.50
a. interest, pro t, wages, and rent
b. rent, wages, interest, and pro t
c. pro t, rent, interest, and wages
d. interest, wages, pro t, and rent

PREVIOUS ACTIVITY NEXT ACTIVITY
 PoE Session 1 Assignment - 2 


12/12/2020 A ignmen - 2: A emp e ie
S a ed Saturda , 12 December 2020, 9:58 PM

S a e Finished
C e ed Saturda , 12 December 2020, 10:35 PM
Ti e a e 37 mins 4 secs
G ade 14.50 out of 15.00 (97%)
Q e ion 1
Complete
Fiscal polic focuses on manipulating
Select one:
a. aggregate demand to smooth out business uctuations
b. both aggregate suppl and aggregate demand to smooth out business uctuations
c. aggregate suppl to smooth out business uctuations
d. aggregate demand to stimulate the econom and aggregate suppl to contract it
h p :// lm.im cdl.ac.in/moodle/mod/q i / e ie .php?a emp =9839&cmid=325 1/19

Q e ion 2
Complete
n both monopolistic competition and non-price-discriminating monopol ,
Select one:
a. the marginal revenue curve lies above the demand curve
d. the marginal revenue curve lies above the average revenue curve
Q e ion 3
Complete
f MPC is 0.8, the simple tax multiplier is:
Select one:
a. 3
b. -4
c. 5
d. 4

Q e ion 4
Complete
f the MPC equals 0.75 and Government expenditure increases b $100, real GDP demanded will increase b
Select one:
a. 50
b. 25 percent
c. 400
d. 75 percent
Q e ion 5
Complete
Select one:
a. unique products
c. di erentiated products
d. a homogeneous product

Q e ion 6
Complete
f a monopolisticall competitive rm can earn a pro t, it will adjust production until
Select one:
a. MR = MC
b. MR = ATC
c. MR > AVC
d. MC > MR
Q e ion 7
Complete
Select one:
a. the value of the intermediate goods is alread included as inventor investment
b. the value of the intermediate goods is alread included in the value of the nal goods
d. intermediate goods are onl produced b government

Q e ion 8
Complete
f future price changes were perfectl anticipated b both borrowers and lenders, what would happen to the real interest rate in the future if
Select one:
b. it would decrease b the amount of the price increase

Q e ion 9
Complete
Which of the following would cause a downward movement along the mone demand curve?
Select one:
Q e ion 10
Complete
Select one:
a. f people accuratel anticipate in ation, their actions will prevent it.
b. n ation is more damaging if it is unanticipated.
c. n ation promotes social harmon b uniting people against the government.
d. Accurate anticipation of in ation is possible for ever one who is well informed about economic events.

Q e ion 11
Complete
n an oligopol , the demand curve facing an individual rm depends upon
Select one:
b. the rm's suppl curve
c. the behavior of competing rms
Q e ion 12
Complete
f the in ation rate is higher than expected, which of the following groups in societ would be most likel to gain?
Select one:
a. persons holding large amounts of mone
b. persons on xed incomes
c. borrowers
d. lenders

Q e ion 13
Complete
Select one:
a. Joe pa s a plumber $100 to x a broken pipe.
c. Laurie pa s $15 for a haircut.
d. Sand , who is on welfare, receives $100 in food stamps.
Q e ion 14
Complete
Monopolisticall competitive rms ignore the e ect of their decisions upon other rms in the industr because
Select one:
a. each rm is large relative to the market
c. there is onl one seller in the market

Q e ion 15
Complete
n periods of high in ation,
Select one:
a. low nominal interest rates are likel to result
b. the purchasing power of mone is increasing
c. the purchasing power of mone is decreasing
d. nobod wants to work and earn income

Q e ion 16
Complete
Suppose that storage costs increase, so that rms decide to hold less output in inventor , other things constant. Which of the following is
true?
Select one:
d. investment will increase

Q e ion 17
Complete
A cartel is
Select one:
a. an agreement among rival rms to set prices independentl
b. a group of monopolisticall competitive rms which charge the same price
c. a group of oligopolistic rms that engage in formal collusion
d. usuall legal in ndia
Q e ion 18
Complete
Which of the following, other things constant, will shift the mone demand curve to the left?
Select one:

Q e ion 19
Complete
Discretionar scal polic is polic that
Select one:
c. is an intentional change in taxation or government spending
d. is developed in secret b the Government
Q e ion 20
Complete
n ation is
Select one:
a. a continuing rise in ever one's standard of living
b. a rise in the real prices of all goods and services
c. a general and continuous rise in the mone prices of goods and services
d. a reduction in ever one's standard of living

Q e ion 21
Complete
f the econom experiences a contractionar gap and the RB bu s government securities in the open-market, then:
Select one:
a. Mone suppl increases, the interest rate increases, and the aggregate demand increases
b. Mone suppl decreases, the investment decreases, and the aggregate demand increases
c. Mone suppl decreases, the interest rate decreases, and the aggregate demand falls
d. Mone suppl increases, investment increases, aggregate demand increases
Q e ion 22
Complete
Which of the following is most likel produced in a monopolisticall competitive market?
Select one:
a. detergents
b. computer chips
c. motorc cles
d. rewood

Q e ion 23
Complete
Select one:
a. an good bought b a household, rather than a rm
c. legal services hired b a public accounting rm
d. pi as bought at a restaurant

Q e ion 24
Complete
f to stores overestimate the demand for a to in 2004 and, as a result, have an unexpectedl large number of them on hand at the end of
the ear, the value of the increased inventor of those to s will be counted as
Select one:
a. consumption in 2004

Q e ion 25
Complete
t is harder to explain the behavior of rms in oligopol than in other market structures because in oligopol
Select one:
a. the rms act independentl of each other
c. onl di erentiated products are produced
d. onl homogeneous products are produced
Q e ion 26
Complete
Which of the following would directl reduce GDP?
Select one:
a. The Resident Welfare Association of Primus Estates decides to la -o local guards at the local swimming pool.
b. An unscrupulous disposal compan dumps barrels of toxic waste near a suburban water suppl .
c. Pollution of international waters increases.
d. The switch from home-cooked meals to restaurant meals lowers the nutritional value of the average diet.

Q e ion 27
Complete
n which market structure(s) might rms produce an undi erentiated product?
Select one:
a. perfect competition and homogenous oligopol
b. perfect competition onl
c. monopol onl
d. monopolistic competition onl
Q e ion 28
Complete
Select one:
a. Aggregate demand increases and aggregate suppl decreases.
b. Both aggregate demand and aggregate suppl increase.
c. Both aggregate demand and aggregate suppl decrease.
d. Aggregate demand increases and aggregate suppl increases.

Q e ion 29
Complete
Fiscal polic
Select one:
a. can a ect emplo ment and prices, but not the level of GDP
b. uses the Union government's powers over the mone suppl and interest rates to a ect emplo ment, the price level, and GDP
c. can a ect emplo ment and the level of GDP, but not the price level
d. uses the Union government's powers of spending and taxation to a ect emplo ment, the price level, and GDP
Q e ion 30
Complete
Select one:
a. ntermediate goods and services are excluded to prevent double counting.
b. t re ects production in a particular ear.
c. t includes transfer pa ments.
d. t includes onl nal goods and services.


S a ed Saturda , 12 December 2020, 10:55 PM

S a e Finished
C m le ed Saturda , 12 December 2020, 11:13 PM
Time ake 18 mins 14 secs
G ade 15.00 out of 15.00 (100%)
Q e ion 1
Complete
Oligopolists are more sensitive to the pricing and output policies of their rivals hen
Select one:
a. there is freedom of entr and e it
c. there are barriers to entr
d. their products are highl di erentiated

Q e ion 2
Complete
The opportunit cost of holding mone increases hen
Select one:
Q e ion 3
Complete
Which of the follo ing ould cause a do n ard movement along the mone demand curve?
Select one:

Q e ion 4
Complete
f a monopolisticall competitive rm can earn a pro t, it ill adjust production until
Select one:
a. MR > AVC
b. MR = ATC
c. MC > MR
d. MR = MC
Q e ion 5
Complete
A rm could di erentiate its product b all of the follo ing means e cept one. Which is the e ception?
Select one:
a. making the product available at a number of di erent locations
b. using packaging or advertising to create a special subjective image of the product in the consumer's mind
c. increasing the number of services that accompan the product
d. emphasi ing that the product provides the same bene ts to consumers as the others on the market, even hen it is reall ph sicall
di erent

Q e ion 6
Complete
f MPC is 0.8, the simple ta multiplier is:
Select one:
a. 5
b. 4
c. -4
d. 3
Q e ion 7
Complete
n hich market structure(s) might rms produce an undi erentiated product?
Select one:
a. monopolistic competition onl
b. perfect competition onl
c. perfect competition and homogenous oligopol
d. monopol onl

Q e ion 8
Complete
Discretionar scal polic is polic that
Select one:
a. is an intentional change in ta ation or government spending
b. applies to some states but not others
c. is developed in secret b the Government
d. applies to some industries but not others
Q e ion 9
Complete
Which of the follo ing, other things constant, ill shift the mone demand curve to the left?
Select one:

Q e ion 10
Complete
Which of the follo ing is most likel produced in a monopolisticall competitive market?
Select one:
a. detergents
b. computer chips
c. re ood
d. motorc cles
Q e ion 11
Complete
A decrease in autonomous net ta es
Select one:
a. increases GDP less than an equal increase in government purchases

Q e ion 12
Complete
Which of the follo ing ould lead to the most in ation?
Select one:
a. Both aggregate demand and aggregate suppl decrease.
b. Aggregate demand increases and aggregate suppl increases.
c. Aggregate demand increases and aggregate suppl decreases.
d. Both aggregate demand and aggregate suppl increase.
Q e ion 13
Complete
Select one:
a. value added to the econom b intermediate goods and services minus original cost
b. market value of all goods and services produced b resources located in a countr
c. total output of all goods and services produced b resources located in a countr
d. market value of all nal goods and services produced b resources located in a countr .

Q e ion 14
Complete
Fiscal polic focuses on manipulating
Select one:
a. aggregate demand to stimulate the econom and aggregate suppl to contract it
b. both aggregate suppl and aggregate demand to smooth out business uctuations
c. aggregate suppl to smooth out business uctuations
d. aggregate demand to smooth out business uctuations
Q e ion 15
Complete
A change in autonomous net ta es a ects the equilibrium quantit of GDP demanded
Select one:
a. in the same a as a change in autonomous planned investment
b. in the same a as a change in autonomous net e ports
c. in the same a as a change in autonomous government purchases
d. onl indirectl , b rst changing the level of disposable income

Q e ion 16
Complete
What is the opportunit cost of holding mone rather than some other nancial asset?
Select one:
a. the forgone interest income
b. the forgone utilit
c. time
Q e ion 17
Complete
Suppose that storage costs increase, so that rms decide to hold less output in inventor , other things constant. Which of the follo ing is
true?
Select one:
a. consumption spending ill decrease
b. investment ill increase
c. consumption spending ill increase
d. investment ill decrease

Q e ion 18
Complete
Which monetar polic ould be appropriate to close a contractionar gap?
Select one:
a. a ta cut
b. a decrease in government purchases
c. the RB decreasing the bank rate
d. an increase in reserve requirements
Q e ion 19
Complete
Suppose in ation is e pected to be 4% ne t ear, and our emplo er agrees to a 6% increase in our nominal age. You e pect our real
age to:
Select one:
a. ncrease b 2%
b. ncrease b 4%
c. ncrease b 6%
d. Decrease b 10%

Q e ion 20
Complete
A movement up ard and to the left along the mone demand curve is caused b
Select one:
Q e ion 21
Complete
During periods hen the in ation rate uctuates idel ,
Select one:
a. all relative prices increase at the same rate, leaving mone prices constant
b. uncertaint about changes in relative prices causes a decrease in economic e cienc
c. all mone prices rise at the same rate, causing relative prices to increase
d. economic e cienc increases because decision makers pa closer attention to changes in mone prices

Q e ion 22
Complete
Fiscal polic
Select one:
a. uses the Union government's po ers of spending and ta ation to a ect emplo ment, the price level, and GDP
b. can a ect emplo ment and prices, but not the level of GDP
c. can a ect emplo ment and the level of GDP, but not the price level
d. uses the Union government's po ers over the mone suppl and interest rates to a ect emplo ment, the price level, and GDP
Q e ion 23
Complete
n both monopolistic competition and non-price-discriminating monopol ,
Select one:
c. the marginal revenue curve lies belo the demand curve

Q e ion 24
Complete
Which of the follo ing is the best e ample of an intermediate good or service?
Select one:
a. sunglasses orn on a summer vacation in Florida
b. pi as bought at a restaurant
c. legal services hired b a public accounting rm
d. an good bought b a household, rather than a rm
Q e ion 25
Complete
f the MPC equals 0.75 and Government e penditure increases b $100, real GDP demanded ill increase b
Select one:
a. 50
b. 75 percent
c. 400
d. 25 percent

Q e ion 26
Complete
A cartel's pro t-ma imi ing price is
Select one:
a. on the demand curve at the quantit here combined marginal cost equals marginal revenue
b. on the demand curve here it intersects its marginal cost curve
c. determined b using the cost-plus pricing model
Q e ion 27
Complete
A cartel is
Select one:
a. an agreement among rival rms to set prices independentl
c. usuall legal in ndia
d. a group of monopolisticall competitive rms hich charge the same price

Q e ion 28
Complete
n periods of high in ation,
Select one:
a. lo nominal interest rates are likel to result
b. nobod ants to ork and earn income
c. the purchasing po er of mone is increasing
d. the purchasing po er of mone is decreasing
Q e ion 29
Complete
f to stores overestimate the demand for a to in 2004 and, as a result, have an une pectedl large number of them on hand at the end of
the ear, the value of the increased inventor of those to s ill be counted as
Select one:

Q e ion 30
Complete
Which of the follo ing ould be included in this ear's GDP?
Select one:
a. the used car Trace sold to Justin
b. that bucket of Kentuck Fried Chicken ou bought this Year
d. one hundred shares of BM stock that Ton Hanks bought this Year


State Finished
Grade 12.00 out of 15.00 (80%)
Question 1
Complete
Select one:
a. a decrease in government purchases
b. the RBI decreasing the bank rate
c. an increase in reserve requirements
d. a tax cut 
Question 2
Complete
Fiscal policy
Select one:
a. uses the Union government's powers over the money supply and interest rates to a ect employment, the price level, and GDP
b. can a ect employment and the level of GDP, but not the price level
c. uses the Union government's powers of spending and taxation to a ect employment, the price level, and GDP
d. can a ect employment and prices, but not the level of GDP
Question 3
Complete

Select one:
a. It includes transfer payments.
b. It includes only nal goods and services.
c. It re ects production in a particular year.
d. Intermediate goods and services are excluded to prevent double counting.
Question 4
Complete
Select one:
Question 5
Complete

Select one:
a. store of wealth
b. medium of exchange
c. standard of value
d. interest-bearing asset
Question 6
Complete
Select one:
a. that bucket of Kentucky Fried Chicken you bought this Year
b. the used car Tracey sold to Justin
Question 7
Complete

Select one:
b. is developed in secret by the Government
c. applies to some industries but not others
Question 8
Complete
Select one:
a. In ation is more damaging if it is unanticipated.
b. Accurate anticipation of in ation is possible for everyone who is well informed about economic events.
d. If people accurately anticipate in ation, their actions will prevent it.
Question 9
Complete

Select one:
Question 10
Complete
Select one:
a. motorcycles
b. rewood
c. detergents
d. computer chips
Question 11
Complete

true?
Select one:
a. investment will decrease
c. consumption spending will decrease
Question 12
Complete
Select one:
Question 13
Complete

Select one:
b. increasing aggregate demand and greater unemployment
d. decreasing aggregate demand and lower unemployment
Question 14
Complete
Select one:
c. it would decrease by the amount of the price increase
Question 15
Complete

A cartel is
Select one:
b. usually legal in India
c. a group of monopolistically competitive rms which charge the same price
d. a group of oligopolistic rms that engage in formal collusion
Question 16
Complete
Select one:
a. rms must be small in size and selling di erentiated goods
b. goods must be di erentiated and few sellers
c. goods can be either undi erentiated or di erentiated and there are few rms large in size
Question 17
Complete

Select one:
a. uncertainty about changes in relative prices causes a decrease in economic e ciency
b. all money prices rise at the same rate, causing relative prices to increase
c. economic e ciency increases because decision makers pay closer attention to changes in money prices
d. all relative prices increase at the same rate, leaving money prices constant
Question 18
Complete
wage to:
Select one:
a. Increase by 6%
b. Increase by 4%
c. Decrease by 10%
d. Increase by 2%
Question 19
Complete

Select one:
c. only homogeneous products are produced
d. only di erentiated products are produced
Question 20
Complete
Select one:
d. is una ected
Question 21
Complete

Select one:
Question 22
Complete
Select one:
b. their products are highly di erentiated
c. all rms produce identical products
d. there are barriers to entry
Question 23
Complete

Select one:
b. intermediate goods are not part of investment spending
c. the value of the intermediate goods is already included in the value of the nal goods
Question 24
Complete
Select one:
Question 25
Complete

Select one:
a. 50
b. 75 percent
c. 25 percent
d. 400
Question 26
Complete
Select one:
b. the price level falls
d. nominal GDP rises
Question 27
Complete

Select one:
a. Laurie pays $15 for a haircut.
d. Joe pays a plumber $100 to x a broken pipe.
Question 28
Complete
Select one:
a. -4
b. 5
c. 3
d. 4
Question 29
Complete

Select one:
a. Money supply decreases, the interest rate decreases, and the aggregate demand falls
b. Money supply increases, the interest rate increases, and the aggregate demand increases
c. Money supply increases, investment increases, aggregate demand increases
Question 30
Complete
Select one:
a. time
c. the forgone utility
 


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CASE STUDY ANSWERS :

1) LOSSES TO BOTH THE FIRMS

85. for a monopolist, marginal revenue is – less than price

86. Macroeconomics deals with: economic aggregates.

98. If variable cost at each output level doubles - MC remains unchanged

100. Anticipated inflation - causes fewer problems than unanticipated inflation

Which of the following market situations explains marginal

physical places, such as supermarkets, department stores, shopping malls etc.

Both option 1 and option 2

only product market and not to resource market

Both statement A and statement B are true.

Both statement A and statement B are false

Statement A is true but statement B is false.

Statement A is false but statement B is true.

a decrease in population growth

foreign investment from abroad

policies to encourage international trade

All the options are correct.

percentage change in variable input due to percentage change in output.

percentage change in output due to percentage change in variable input.

percentage change in output due to percentage change in price.

rising upward to right

concave from below

convex from below

Movement to a higher demand curve.

Movement to a lower demand curve

sometimes true sometimes false

the points where marginal product of capital is zero

the points where marginal product of capital is one.

the points where marginal product of labour is zero

the points where marginal product of labour is one

elasticity of production is greater than one.

elasticity of production is less than one but greater than zero.

elasticity of production is greater than one but less than infinity.

elasticity of production is less than zero.

Statement A is not correct but statement B is correct.

competitive markets, but not monopoly markets

monopoly markets, but not competitive markets

competitive and monopoly markets

neither competitive nor monopoly markets

money and financial markets.

Rs. 1,350 billion.

Rs. 600 billion.

Rs. 6,000 billion.

The equilibrium position of a firm in the long period

The equilibrium position of a firm under imperfect competition

The equilibrium position of a firm under perfect competition

The former is always stabilizing, while the latter is never stabilizing

Only (a) is right.

Both (a) and (b) are right.

Both (b) and (c) are right.

All of these are right

Only statement A is true.

Only statement B is true

Both statement A and statement B are true

Both statement A and statement B are false

Both (a) and (b)

None of these but change in consumption expenditure

total utility curve

Statement A is not correct but statement B is correct.

Input output isoquant

Smooth convex isoquant

the consumer will increase his consumption of both X and Y.