Q1 .

The respective payments for the resources of natural resources, labor, capital and
entrepreneurial ability are:

Select one:

a) Interest, Wages, Profit And Rent

b) Interest, Profit, Wages And Rent
c) Profit, Rent, Interest And Wages
d) Rent, Wages, Interest And Profit

Q2. The law of demand is illustrated by a demand curve that is

Select one:

a) None of these
b) Downward Sloping And Concave To Origin
c) Downward Sloping to the Right
d) Downward Sloping And Convex to Origin

Q3. If we say that demand has increased, we mean that there has been

Select one:

a) A rightward Movement along the demand curve

b) A leftward movement along the Demand curve
c) A Rightward shift of the demand curve
d) A leftward shift of the Demand curve

Q4. Which of the following are implicit costs for a typical firm?

Select one:

a) Opportunity Costs of Capital owned and used by the firm

b) Cost of Labor hired by the firm
c) Insurance costs
d) Electricity costs

Q5. Marginal Product is defined as

Select one:

a) The increase in Output that occurs when all resources are increased by the same proportion
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 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

Q6. 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 oranges for apples

b) There is no substitution effect because relative prices have remained constant
 c) Demand for both good increases
d) The consumer will substitute apples for oranges

Q7. Which of the following is most likely to be an inferior good?

Select one:

a) Soft drinks
b) Restaurant Meals
c) Used Clothings
d) Airline Travel

Q8. Which of the following statements is true? If the marginal product of labor diminishes.

Select one:

a) Marginal cost rises

b) Average fixed cost rises
c) Average total cost must rise
d) Average variable cost is constant

Q9. Suppose Sushil gives up his job as financial advisor for P.E.T.S., where he earned Rs 30,000 per
year, to open up a store to sell sports goods to cricket teams. He invested Rs 10,000 in the store,
which was in savings account and earning 5 percent interest. This year’s revenues in the new
business were Rs 50,000 and explicit cost were Rs 10,000. What is the opportunity cost incurred by
Sushil.

Select one:

a) Rs 35,000/Rs 30,500
b) Rs 30,000
c) Rs 50,000
d) Rs 10,000

Q10. In perfect competition, if one firm raises its price

Select one:

a) The firm will lose revenues because other firms will not follow
b) All consumers will be adversely affected
c) That firm will increase its revenues
d) Others will follow

Q11. If a firm ABX 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 Change in Price
c) Increases only if demand is price inelastic
d) Always increase

Q12. Unlike a “service”, a “good”

Select one:
 a) Uses resources to satisfy wants
b) Is physical and tangible
c) Is a resource
d) Is desirable

Q13. Cash payments for steel to be used in production of two wheelers would be an example of

Select one:

a) Fixed costs
b) Explicit Costs
c) Implicit Costs
d) Sunk Costs

Q14. Scarcity

Select one:

a) Applies when a resource is not freely available

b) Means that each society and each individual must make choices
c) Exists because people have wants that are unlimited relative to the availability of resources
to satisfy those wants
d) All of these are true

Q15. Demand of a good will elastic when

Select one:

a) There are few substitutes

b) The time period is relatively short
c) The good is considered a necessity
d) The time period is relatively long

Q16. Which of the following is most likely to be a fixed resource for Ramprasad’s country Fresh Pies,
Inc?

Select one:

a) Baker
b) Flour
c) Chocolate Powder
d) Ovens

Q17. The marginal product of labor is the

Select one:

a) Change in output from using one more unit of labor

b) Cost of an additional worker
c) Average output per worker
d) Change in revenue from using one more unit of labor

Q18. As a monopolist increase the quantity of output produced, what happens to price (P) and
marginal revenue (MR)?
Select one:

a) Both P and MR remain constant

b) P is constant, but MR decreases
c) P decreases but MR is constant
d) Both P and MR decreases, but MR falls faster than P

Q 19. 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 variable cost equals fixed cost

b) Average total cost equals average fixed cost
c) Marginal cost equals average variable cost
d) Marginal cost equals average total cost

Q20. 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) An upward movement on the demand curve

b) A leftward shift of the demand curve
c) A Rightward shift of the demand curve
d) A downward movement on the demand curve

Q21. Which of the following markets best approximates the perfectly competitive market structure?

Select one:

a) World Commodity Markets

b) Insurance
c) Airlines
d) Automobile Manufacturing

Q22. Along a linear demand curve, total revenue is maximized when demand is

Select one:

a) Inelastic
b) Perfectly elastic
c) Unit Elastic
d) Elastic

Q23. Because Market price remains constant as a perfectly competitive firm expands output, each
firm faces

Select one:

a) Constant costs
b) Downward sloping Curve
c) Horizontal Demand Curve
d) Constant Returns to Scale
Q24. Explicit costs are

Select one:

a) Actual Monetary Payments for resources purchased

b) Exactly the same as Implicit cost s
c) Not part of Opportunity cost
d) Only cost considered in opportunity cost

Q25. The law of demand says that the lower the price of a good, the other things constant,

Select one:

a) The larger the quantity demanded of that good

b) The smaller the quantity demanded of that good
c) The larger the demand for that good
d) The smaller the demand for that good

Q26. Which of the following is a long-run adjustment?

Select one:

a) Microsoft cuts back its hiring of new graduates

b) A new economics professor is hired on campus
c) Glow electric disassembles one of its nuclear power plants
d) General Motors increases its orders for steel

Q27. At the point diminishing marginal returns set in, the slope of the total product curve is

Select one:

a) Positive and decreasing

b) Negative and increasing
c) Positive and increasing
d) Negative and decreasing

Q28. If a 5% increase in price of cars leads to an 8% decrease in quantity demanded, the demand for
cars is

Select one:

a) Perfectly Elastic
b) Inelastic
c) Elastic
d) Unit Elastic

Q29. Economics is best defined as the study of how:

Select one:

a) The government should deal with unemployment and inflation

b) Individuals decide to use scarce resources in an attempt to satisfy their unlimited wants
c) To make money
d) To eliminate the problem of scarce resources

Q30. Which of the following statements about the substitution effect 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 is caused by a change in relative prices
c) It is usually equal to the income effect
d) It affects the consumer’s ability, rather than willingness, to purchase a good

Q31. Which of the following is most likely to be an inferior good?

Select one:
a) Airline Travel
b) Restaurant Meals
c) Soft Drinks
d) Used Clothings

Q32. The respective payments for the resources of natural resources, labor, capital, and
entrepreneurial ability are
Select one:
a. Rent, Wages, Interest, And Profit
b. Interest, Wages, Profit, And Rent
c. Profit, Rent, Interest, And Wages
d. Interest, Profit, Wages, And Rent

Q33. If a firm ABX raises the price of its product, its total revenue will
Select one:
a. Increase Only If Demand Is Price Inelastic
b. Increase Only If Demand Is Price Elastic
c. Always Increase
d. Remain Constant, Regardless Of Change In Price

Q34. Demand for a good will be elastic when

Select one:
a. The Time Period Is Relatively Short
b. The Good Is Considered A Necessity
c. The Time Period Is Relatively Long
d. There Are Few Substitutes

Q35. Which of the following statements about the substitution effect of a price change is true?
Select one:
a. It Is Usually Equal To The Income Effect.
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 Caused By A Change In Relative Prices.

Q36. Suppose Sushil gives up his job as financial advisor for P.E.T.S., where he earned Rs. 30,000 per
year, to open up a store to sell sports goodsto cricket teams. He invested Rs. 10,000 in the store,
which was in savings account and earning 5 percent interest. This year's revenues inthe new
business were Rs. 50,000, and explicit costs were Rs. 10,000. What is the opportunity cost incurred
by Sushil.
Select one:
a. Rs. 30,000
b. Rs 50,000
c. Rs. 35,000/Rs 30,500
d. Rs. 10,000

Q37. 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

Q38. 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

Q39. Which of the following is a long-run adjustment?

Select one:
a. Glow Electric Disassembles One Of Its Nuclear Power Plants.
b. Microsoft Cuts Back Its Hiring Of New Graduates.
c. General Motors Increases Its Orders For Steel.
d. A New Economics Professor Is Hired On Campus.

Q40. In perfect competition, if one firm raises its price,

Select one:
a. Others Will Follow
b. That Firm Will Lose Revenues Because Other Firms Will Not Follow
c. All Consumers Will Be Adversely Affected
d. That Firm Will Increase Its Revenues

Q41. If variable cost rises from Rs.60 to Rs.100 as output increases from 15 to 20 units, the marginal
cost of the twentieth unit
Select one:
a. Is Rs. 8
b. Is Rs. 40
c. Is Rs.100
d. Is Rs. 5

Q42. The law of demand says that the lower the price of a good, other things constant,
Select one:
a. The Smaller The Quantity Demanded Of That Good
b. The Larger The Quantity Demanded Of That Good
c. The Smaller The Demand For That Good
d. The Larger The Demand For That Good

Q43. 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.
b. Marginal Cost Equals Average Total Cost.
c. Marginal Cost Equals Average Variable Cost.
d. Average Variable Cost Equals Fixed Cost.
Q44. 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. An Increase In The Price Of A Complementary Good
d. A Decrease In The Price Of The Good

Q45. If we say that demand has increased, we mean that there has been
Select one:
a. A Leftward Shift Of The Demand Curve
b. A Rightward Shift Of The Demand Curve
c. A Leftward Movement Along The Demand Curve
d. A Rightward Movement Along The Demand Curve

Q46. Which of the following statements is true? If the marginal product of labor diminishes,
Select one:
a. Marginal Cost Rises
b. Average Total Cost Must Rise
c. Average Fixed Cost Rises
d. Average Variable Cost Is Constant

Q47. Unlike a "service," a "good"

Select one:
a. Uses Resources To Satisfy Wants
b. Is Physical And Tangible
c. Is A Resource
d. Is Desirable

Q48. For which of the following is demand most likely to be perfectly inelastic?
Select one:
a. Pepsi
b. Mobile Phones
c. Covid-19 Vaccine
d. Bmw Automobiles

Q49. The law of diminishing returns explains why

Select one:
a. Short-Run Mc And Avc Curves Are U-Shaped
b. The Production Possibilities Curve Is Bowed Out
c. Long Run Supply Curves Are Downward Sloping
d. Monopolies Have A Guaranteed Profit Margin

Q50. Benares city has abundant supply of water. However, an economist would consider it a scarce
resource because
Select one:
a. Water Is Limited Relative To People's Unlimited Wants
b. Water Pollution Will Eventually Make It Of No Use To The Human Life
c. Water Commands A Very High Price
d. Water Is Necessary For Humans' Physical Survival

Q51. Scarcity
Select one:
a. Applies When A Resource Is Not Freely Available
b. All Of These Are True
c. Exists Because People Have Wants That Are Unlimited Relative To The Availability Of Resources To
Satisfy Those Wants
d. Means That Each Society And Each Individual Must Make Choices

Q52. If the demand for airline tickets from New Delhi to Chennai city is price elastic
Select one:
a. The Airline Revenue Will Increase If Supply Decreases
b. The Airline Revenue Will Increase If Supply Increases
c. The Airline Revenue Will Remain Constant Whether Supply Increases Or Decreases
d. Any Of These Is Possible

Q53. Explicit costs are

Select one:
a. Only Cost Considered In Opportunity Cost
b. Exactly The Same As Implicit Costs
c. Actual Monetary Payments For Resources Purchased
d. Not Part Of Opportunity Cost

Q54. In economics, capital is defined as

Select one:
a. Human Creations Used In The Production Process
b. Natural Resources, Such As Water, Oil, And Iron Ore
c. Money And Other Financial Assets
d. The Natural, Unskilled Abilities Of People

Q55. Economics is best defined as the study of how

Select one:
a. To Eliminate The Problem Of Scarce Resources
b. The Government Should Deal With Unemployment And Inflation
c. Individuals Decide To Use Scarce Resources In An Attempt To Satisfy Their Unlimited Wants
d. To Make Money

Q56. The demand curve facing a perfectly competitive firm is

Select one:
a. Perfectly Inelastic
b. Identical To The Industry Demand Curve
c. Unit Elastic
d. Perfectly Elastic

Q57. The income effect 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

Q58. The opportunity cost of a resource

Select one:
a. Includes Explicit Cost Only
b. Includes Implicit Cost Only
c. Includes Both Explicit And Implicit Cost
d. Is Equal To The Market Price Of The Resource
Q59. If a 5% increase in price of cars leads to an 8% decrease in quantity demanded, the demand for
cars is
Select one:
a. Elastic
b. Inelastic
c. Perfectly Elastic
d. Unit Elastic

Q60. Economics is the study of

Select one:
a. How Individuals Amass Personal Fortunes In The Stock Market
b. How Individuals And Nations Deal With The Problem Of Scarcity
c. How The Human Race Differs From Other Species
d. Role That Money Plays In The Economy

Q61. The law of demand is illustrated by a demand curve that is

Select one:
a. Downward Sloping And Convex To Origin
b. Downward Sloping To The Right
c. Downward Sloping And Concave To Origin
d. None Of These

Q62. Cash payments for steel to be used in production of two wheelers would be an example of
Select one:
a. Sunk Costs
b. Explicit Costs
c. Implicit Costs
d. Fixed Costs

Q63. The law of diminishing returns explains why

Select one:
a. Monopolies Have A Guaranteed Profit Margin
b. The Production Possibilities Curve Is Bowed Out
c. Long Run Supply Curves Are Downward Sloping
d. Short-Run Mc And Avc Curves Are U-Shaped

Q64. Which of the following are implicit costs for a typical firm?
Select one:
a. Insurance Costs
b. Electricity Costs
c. Opportunity Costs Of Capital Owned And Used By The Firm
d. Cost Of Labor Hired By The Firm

Q65. For which of the following is demand most likely to be perfectly inelastic?
Select one:
a. Covid-19 Vaccine
b. Mobile Phones
c. Pepsi
d. Bmw Automobiles

Q66. Which of the following is most likely to be an inferior good?

Select one:
a. Soft Drinks
b. Airline Travel
c. Used Clothings
d. Restaurant Meals

Q67. The demand curve for a good that has many perfect substitutes in consumption is likely to be
Select one:
a. Highly Inelastic
b. Horizontal
c. Steep
d. Upward Sloping

Q68. In economics, capital is defined as

Select one:
a. The Natural, Unskilled Abilities Of People
b. Natural Resources, Such As Water, Oil, And Iron Ore
c. Money And Other Financial Assets
d. Human Creations Used In The Production Process

Q69. If a 5% increase in price of cars leads to an 8% decrease in quantity demanded, the demand for
cars is
Select one:
a. Perfectly Elastic
b. Unit Elastic
c. Elastic
d. Inelastic

Q70. One likely result of monopoly power is

Select one:
a. A Decline In Government Regulation
b. An Elimination Of Barriers To Industry Entry
c. A Wide Variety Of Substitute Products From Which Consumers Can Choose
d. A Higher Price Than Would Exist In A Competitive Industry

Q71. 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 Leftward Shift Of The Demand Curve
b. A Downward Movement On The Demand Curve
c. A Rightward Shift Of The Demand Curve
d. An Upward Movement On The Demand Curve

Q72. The income effect 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. Increase In The Demand For Backpacks
d. Decrease In The Quantity Demanded For Backpacks

Q73. Which of the following is most likely to be a fixed resource for Ramprasad's Country Fresh Pies,
Inc.?
Select one:
a. Ovens
b. Baker
c. Chocolate Powder
d. Flour

Q74. Scarcity
Select one:
a. All Of These Are True
b. Applies When A Resource Is Not Freely Available
c. Means That Each Society And Each Individual Must Make Choices
d. Exists Because People Have Wants That Are Unlimited Relative To The Availability Of Resources To
Satisfy Those Wants

Q75. The law of demand says that the lower the price of a good, other things constant,
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

Note: https://www.khanacademy.org/economics-finance-domain/ap-macroeconomics/basic-
economics-concepts-macro/demand/v/change-in-demand-versus-change-in-quantity-demanded-
microeconomics-khan-academy

Q76. 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 Both Explicit And Implicit Cost
d. Includes Implicit Cost Only

Q77. Because market price remains constant as a perfectly competitive firm expands output, each
firm faces
Select one:
a. A Horizontal Demand Curve
b. Constant Costs
c. A Downward Sloping Curve
d. Constant Returns To Scale

Q78. Demand for a good will be elastic when

Select one:
a. The Time Period Is Relatively Short
b. There Are Few Substitutes
c. The Good Is Considered A Necessity
d. The Time Period Is Relatively Long

Q79. The marginal product of labor is the

Select one:
a. Change In Revenue From Using One More Unit Of Labor
b. Change In Output From Using One More Unit Of Labor
c. Cost Of An Additional Worker
d. Average Output Per Worker
Q80. If variable cost rises from Rs.60 to Rs.100 as output increases from 15 to 20 units, the marginal
cost of the twentieth unit
Select one:
a. Is Rs. 8
b. Is Rs. 5
c. Is Rs.100
d. Is Rs. 40

Q81. 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. Patents And Copyrights
d. Economies Of Scale

Q82. Which of the following is a short-run adjustment?

Select one:
a. Because Of Staggering Losses, Three Insurance Companies Exit The Industry.
b. Faced With Increasing Enrollment, A Private College Builds A New School Of Business Building.
c. Tata Motors Builds An Automobile Assembly Plant In Pune.
d. People's Bank Hires Two New Tellers To Meet Increased Demand For Customer Services.

Q83. 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 Is Constant, Bu8t Mr Decreases
c. P Decreases, But Mr Is Constant
d. Both P And Mr Remain Constant

Q84. 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 Leftward Shift Of The Demand Curve
c. A Rightward Movement Along The Demand Curve
d. A Leftward Movement Along The Demand Curve

Q85. In perfect competition, if one firm raises its price,

Select one:
a. That Firm Will Increase Its Revenues
b. Others Will Follow
c. That Firm Will Lose Revenues Because Other Firms Will Not Follow
d. All Consumers Will Be Adversely Affected

Q86. Which of the following is a long-run adjustment?

Select one:
a. A New Economics Professor Is Hired On Campus.
b. General Motors Increases Its Orders For Steel.
c. Microsoft Cuts Back Its Hiring Of New Graduates.
d. Glow Electric Disassembles One Of Its Nuclear Power Plants.

Q87. Benares city has abundant supply of water. However, an economist would consider it a scarce
resource because
Select one:
a. Water Commands A Very High Price
b. Water Is Limited Relative To People's Unlimited Wants
c. Water Pollution Will Eventually Make It Of No Use To The Human Life
d. Water Is Necessary For Humans' Physical Survival

Q88. If a firm ABX raises the price of its product, its total revenue will
Select one:
a. Increase Only If Demand Is Price Inelastic
b. Always Increase
c. Remain Constant, Regardless Of Change In Price
d. Increase Only If Demand Is Price Elastic

Q89. Economics is the study of

Select one:
a. How Individuals Amass Personal Fortunes In The Stock Market
b. Role That Money Plays In The Economy
c. How The Human Race Differs From Other Species
d. How Individuals And Nations Deal With The Problem Of Scarcity

Q90. The long run is a period of time

Select one:
a. Less Than One Year
b. During Which All Resources Are Variable
c. During Which At Least One Resource Is Fixed
d. During Which All Resources Are Fixed

Q91. Which of the following will cause the demand curve for a normal good to shift to the right?
Select one:
a. A Decrease In The Price Of The Good
b. A Decrease In Income
c. An Increase In The Price Of A Substitute Good
d. An Increase In The Price Of A Complementary Good

Q92. The opportunity cost of a resource

Select one:
a. Is Equal To The Market Price Of The Resource
b. Includes Explicit Cost Only
c. Includes Both Explicit And Implicit Cost
d. Includes Implicit Cost Only

Q93. 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.

Q94. Which of the following is a long-run adjustment?

Select one:
a. Microsoft Cuts Back Its Hiring Of New Graduates.
b. Glow Electric Disassembles One Of Its Nuclear Power Plants.
c. A New Economics Professor Is Hired On Campus.
d. General Motors Increases Its Orders For Steel.
Q95. If a firm is a natural monopoly, its
Select one:
a. Total Fixed Cost Declines Over The Full Range Of Market Demand
b. Long-Run Average Cost Increases Over The Full Range Of Market Demand
c. Long-Run Average Cost Declines And Marginal Cost Rises Over The Full Range Of Market Demand
d. Long-Run Average Cost Declines Over The Full Range Of Market Demand

Q96. For which of the following is demand most likely to be perfectly inelastic?
Select one:
a. Mobile Phones
b. Bmw Automobiles
c. Covid-19 Vaccine
d. Pepsi

Q97. Along a linear demand curve, total revenue is maximized when demand is
Select one:
a. Elastic
b. Inelastic
c. Perfectly Elastic
d. Unit Elastic

Q98. In economics, capital is defined as

Select one:
a. Human Creations Used In The Production Process
b. Natural Resources, Such As Water, Oil, And Iron Ore
c. Money And Other Financial Assets
d. The Natural, Unskilled Abilities Of People

Q99. Which of the following are implicit costs for a typical firm?
Select one:
a. Opportunity Costs Of Capital Owned And Used By The Firm
b. Electricity Costs
c. Cost Of Labor Hired By The Firm
d. Insurance Costs

Q100. Cash payments for steel to be used in production of two wheelers would be an example of
Select one:
a. Explicit Costs
b. Sunk Costs
c. Implicit Costs
d. Fixed Costs

Q101. Along a linear demand curve,

Select one:
a. Both The Slope And Price Elasticity Are Constant
b. The Slope Is Constant, But The Price Elasticity Varies
c. Total Revenues Are Constant
d. The Price Elasticity Is Constant, But The Slope Varies

Q102. The income effect 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 Demand For Backpacks
c. Increase In The Demand For Backpacks
d. Decrease In The Quantity Demanded For Backpacks

Q103. Which of the following is not a barrier to entry which leads to monopoly power.
Select one:
a. Patents And Copyrights
b. Control Of An Essential Resource
c. Homogeneous Product
d. Economies Of Scale

Q104. Perfectly competitive firms respond to changing market conditions by varying their
Select one:
a. Output
b. Information
c. Price
d. Market Share

Q105. Which of the following markets best approximates the perfectly competitive market
structure?
Select one:
a. Airlines
b. World Commodity Markets
c. Automobile Manufacturing
d. Insurance

Q106. If the demand for airline tickets from New Delhi to Chennai city is price elastic
Select one:
a. The Airline Revenue Will Increase If Supply Decreases
b. Any Of These Is Possible
c. The Airline Revenue Will Increase If Supply Increases
d. The Airline Revenue Will Remain Constant Whether Supply Increases Or Decreases

Q107. Explicit costs are

Select one:
a. Exactly The Same As Implicit Costs
b. Only Cost Considered In Opportunity Cost
c. Actual Monetary Payments For Resources Purchased
d. Not Part Of Opportunity Cost

Q108. Scarcity
Select one:
a. Applies When A Resource Is Not Freely Available
b. Means That Each Society And Each Individual Must Make Choices
c. All Of These Are True
d. Exists Because People Have Wants That Are Unlimited Relative To The Availability Of Resources To
Satisfy Those Wants

Q109. If a 5% increase in price of cars leads to an 8% decrease in quantity demanded, the demand
for cars is
Select one:
a. Inelastic
b. Unit Elastic
c. Perfectly Elastic
d. Elastic
Q110. 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 Rightward Shift Of The Demand Curve
c. An Upward Movement On The Demand Curve
d. A Leftward Shift Of The Demand Curve

Q111. Marginal product is defined as

Select one:
a. The Increase In Revenue That Occurs When An Additional Unit Of A Resource Is Added
b. 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 Output That Occurs When All Resources Are Increased By The Same Proportion

Q112. In the short run, how will a profit-maximizing monopolist react if its marginal cost suddenly
increases? It will
Select one:
a. Restrict Output To Extract A Higher Price From Customers
b. Lower Price To Expand Revenue Possibilities
c. Maintain The Current Price If Profit Is Still Positive
d. Increase Plant Size To Lower Marginal Cost

Q113. 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.
b. Marginal Cost Equals Average Variable Cost.
c. Average Variable Cost Equals Fixed Cost.
d. Marginal Cost Equals Average Total Cost.

Q114. Benares city has abundant supply of water. However, an economist would consider it a scarce
resource because
Select one:
a. Water Pollution Will Eventually Make It Of No Use To The Human Life
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

Q115. At the point where diminishing marginal returns set in, the slope of the total product curve is
Select one:
a. Negative And Decreasing
b. Positive And Decreasing
c. Negative And Increasing
d. Positive And Increasing

Q116. Demand for a good will be elastic when

Select one:
a. The Good Is Considered A Necessity
b. The Time Period Is Relatively Short
c. There Are Few Substitutes
d. The Time Period Is Relatively Long

Q117. Economics is best defined as the study of how

Select one:
a. Individuals Decide To Use Scarce Resources In An Attempt To Satisfy Their Unlimited Wants
b. The Government Should Deal With Unemployment And Inflation
c. To Eliminate The Problem Of Scarce Resources
d. To Make Money

Q118. The law of demand says that the lower the price of a good, other things constant,
Select one:
a. The Smaller The Quantity Demanded Of That Good
b. The Smaller The Demand For That Good
c. The Larger The Quantity Demanded Of That Good
d. The Larger The Demand For That Good

Q119. If we say that demand has increased, we mean that there has been
Select one:
a. A Leftward Shift Of The Demand Curve
b. A Leftward Movement Along The Demand Curve
c. A Rightward Shift Of The Demand Curve
d. A Rightward Movement Along The Demand Curve

Q120. Choices made by economic decision makers

Select one:
a. Do Not Involve Ordinary Citizens
b. Are Government Decisions Only
c. Are The Primary Focus Of Economics
d. Occur Infrequently