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Eco
Demand curve faced by nuclear plant a monopoly shell be __ and for a wholesaler
If a firm must produce a significant share of market output before low average cost can be
achieved
Either monopolistic competition or oligopoly
If the demand for Swordfish is price elastic and the price of Swordfish increases then
A US company owns a fast food store in India. The value of Goods and services produced in
the store are included
Which of the following is unique to oligopoly among all the market structures
Mutual interdependence
Which Real world market most closely approximates perfect competition
Which one of the following will shift the money demand curve to the right, keeping other
things constant?
What is the effect of an expansionary monetary policy on the demand for investment curve?
Measuring the impact of production on air pollution, water pollution, soil depletion and the
loss of other natural resources
Demand Pull inflation is shown by an
The consumer still gets the newspaper at Re 1.50 with growing number of supplements,
better printing quality a lot of promotional rewards, gifts and better news coverage…
In the end the benefits from price war between TOI and HT were made by the
All of these
Oligopoly
Benefits for both the Times of India and Hindustan Times would have been higher if they
would have completed primarily on
The additional output obtained by adding another unit of labor to the production process is
called _____.
If there is a decrease in the supply of money, which one of the following is most likely to
happen?
Ans- horizontal sum of all the individual firms’ marginal cost curves
The distinction between discretionary fiscal policy and automatic stabilizers is that
Ans-Increase, decrease
In the short run, a monopolistic competitive firm will shut down when
Ans-Tom gets fired for being late so often after his alarm clock breaks, so he moves off to
the wilderness.
Suppose it costs Minnie’s Mini-Golf (a monopolist) not a penny more to let another person
on the course. If Minnie’s faces a linear (downward-sloping) market demand curve, it will
maximize profits by choosing the point on the demand curve where
The income effect of an increase in the price of potatoes (an inferior good) is a
For an equilibrium interest rate of 5%, an increase in the money supply other factors taken
constant will most likely
John spends exactly the same rupee amount on chocolates each week, regardless of their
price John’s demand curve for chocolates is
Ans-unit elastic
if the loss minimizing output for a perfectly competitive firm is zero then at all other output
levels
Ans-An installer of an automobile tyre punctures the cars tyres parked near his
neighbourhood
When break even point is 2000 units, selling price per unit Rs 14 and variable cost is rs. 8,
find out fixed cost
Ans- 12000
Which of the following could be true of perfect competition but not of monopoly?
If a firm is producing at an output where the total revenue curve crosses the total cost curve
Ans-price and quantity demand are inversely related to each other, other factors being
constant
Ans-economic aggregates
The demand for products from monopolistic competition is elastic due to:
If rice is a normal good, then the income effect of a price change means that
In the context of circular flow of income and expenditure which of the following statements
is not correct?
If the marginal propensity to Consume (MPC) 0.75, a decrease in net taxes of Rs. 100 billion
will increase he equilibrium level of real GDP
if the marginal propensity to save MPS is 0.2 and the government purchases decrease by
5000
ans-dcerease by 25000
Which of the following would not be included in GDP as a form of consumption spending?
All of the following are true of a perfectly competitive firm in long-run equilibrium except
one. Which is the exception
Ans- Marginal cost is minimized
-If the managers of a theater plan to raise ticket prices to increase ticket revenue then they
must believe that demand is
Ans- inelastic
Statement A firm in monopolistic competition are not producing at minimum average cost,
Economists classify all of the following as capital, except one. Which one is not capital?
Ans-not included in GDP because they do not represent payments for currently produced
goods or services.
Suppose sales of Maruti Brezza increases with an increase in the price of Hyundai Venue.
Which one of the following options best explain the situation?
if the inflation rate is 5 percent and you receive a wage increase of 5 percent.
Ans- your nominal income increases by 5 percent but your real Income is unchanged
If the cigarette sellers in the tobacco industry formed a cartel and decided to set price along
a straight line downward sloping demand curve, which point would they choose if they want
to gain the highest total revenue?
Ans- it intersects both the AVC and ATC at their minimum points
Ans-more elastic than a monopolist but less elastic than a perfect competitor
Which one of the following is most likely to be a fixed resource for the Speedy Word
Processing and Resume Company?
Ans- an oligopoly due to heavy Investment in plant and machinery and R&D.
staement 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
income.
slow-moving and non moving items of inventories, other than stock of finished goods and
merchandise, is described as
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
which one of the following commodities has the highest elasticity of demand
Ans-tea
Ans-oranges
Ans-the market value of all final goods and services produced during a year in india
regardless of who owns the resources
If a firm is experiencing diminishing marginal returns to labor which one of the following
must be true?
Ans-The positive effect of specialization in production is being offset by the negative effect
of crowding of inputs
The total revenue from selling trucks is equal to
Ans- nonexistent since no real goods and services have been produced
The reason economists assume that firms try to maximize economic profits
Ans-if over time firms that don’t earns profits would face difficulty in bearing the variable
If equilibrium real GDP demanded rises from $4 trillion to $6 trillion when government
purchases increase by $1 trilion, how large is the marginal propensity to consume
Ans-0.5
If the Indian economy is already producing at its potential, the spending multiplier in the
long-run
Ans-zero
The government imposed a price floor above the market price of the milk which would
increase consumers’ expenditure on milk
Ans-demand is inelastic
Inputs that can be increased or decreased in the short run are called
Ans-variable inputs
The ToysForU an Indian Toy Company can produce 500 water pistol for a total cost of Rs.1
of Rs.3,000, but it would have costs of Rs.200 even if it produced no water pistols. Which o
if the GDP price index is 150 and nominal GDP is Rs.9,000 billion, then real GDP is
Ans-6000 Billion
Which if the following is most likely to be a fixed resource for the Speedy Word Processing
& Resume Company?
Ans-Computer terminals
Ans- how people use limited resources to satisfy their unlimited wants
Accounting profit is
In the case of a normal good, an increase in consumers’ incomes would shift the
If the manager of a theater plan to raise ticket prices to increase the revenue then they must
believe that demand is
Ans-inelastic
The demand curve facing Imelda’s Shoe Boutique, a monopolistically competitive firm
On a graph of production costs, the vertical distance between the fixed cost curve and the
total cost curve at a specific quantity represents
diseconomies of scale
Which one of the following is most likely to be the price inelastic demand?
Ans-all of these
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
Ans-always false
A Monopolist
If Joe says that nothing comes close to a Pepsi, his demand for Pepsi is likely to be
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 is
Ans-more elastic
Which one of the following commodities has the lowest elasticity of demand?
Ans-salt
Ans-an increase in nominal money supply will cause a proportionate increase in the price
level
Ans-by decreasing the time spent on searching for information about goods and services
Given the availability of California oranges, demand for Florida oranges will
If the cross elasticity of demand between product X and product Y is negative then
Ans-X and Y are complementary goods
Which of the following is a feature that monopolistic competition and oligopoly have in
common?
For perfectly competitive firms, the relationship been the market price (P), average revenue
(AR), and Marginal revenue (MR) is-
Ans- P=AR=MR
Ans- decrease investment regardless of whether firms have to borrow money to make an
investment
Ans- Expansionary gap is the excess of actual GDP over potential GDP and government
adopts a contractionary fiscal policy to address the issue
Ans- many firms with some control over price and some product differentiation
If the IMT administration raises the tuition fees of our students in order to increase revenue,
it will
Which one of the following statement about price elasticity of demand is NOT true?
Ans-Higher the proportion of consumer’s budget spent on a good, the lower the value of
price elasticity
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
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
If the price of a haircut (a normal good) increases, other things constant, the
Two heavy equipment manufacturers might collude in an effort to do all of the following
except one. Which is the exception?
In the real world, quantity demand is not likely to be perfectly inelastic because
Ans-then supplier could charge any prices which the consumers will be unable to afford
Which of the following statement regarding the basic economic problem of scarcity correct?
Ans-The problems will exist as long as resources are available in limited amounts
A perfectly competitive firm that earns an economic profit in the short run choose the
output that
The marginal cost curve intersects the average total cost curve (ATC)
Ans-the value of output produced must equal the value of resource payments generated in
producing that output
A Family Travel Agency is a monopolistic competitor who offers services that are
differentiated from the services of other producers in the industry
Ans-price taker and hence cannot determine price but can determine the amount of..
Golden rule of profit maximization says that a profit maximizing firm produces
Ans-where marginal revenue equals marginal cost provided marginal cost cuts marginal
revenue from below
Ans-the impact of a shift in the aggregate demand curve will be less on real GDP
If Marginal Propensity to consume (MPC) is 0.8 and the government purchases increase by
Ans-the sale price of the wallpaper and carpet cost along with the installation fee for
The additional output obtained by adding another unit of labor to the production process is
Which one of the following statement about the market is not true?
Ans-spending and taxing policies used by the government to influence the economy
Which of the following is most likely to be a fixed resource for the City Slicker’s Dude
Ranch?
Concern for the welfare of others is consistent with the concept of self interest
Which of the following is most likely produced in a monopolistic competitive market
Detergents
Product differentiation