1.

All of the production and consumption decisions are taken by the authorities(1 Point)

In a communist system of economy

All of the above

In a capitalistic market economy

In a free market economic system

2.

Food is a normal good because(1 Point)

its demand decreases with increase in income

does not change with change in income

Its demand increases with increase in income

its demand increases with decrease in income

3.

Question(1 Point)

Option 2

Option 1

4.

Binding price ceilings(1 Point)

Keep the market equilibrium unchanged

All of the above

Shift the market equilibrium downward affecting market price and creates shortage

Shift the market equilibrium upward affecting market price

5.

When free entry is one of the attributes of a market structure, economic profits in the long run(1 Point)

Depend on whether or not firms produce identical products

Are zero

Are equal to implicit cost

Are greater than implicit cost

6.

The marginal revenue of the last KFC chicken burger produced is Rs 100 and its marginal cost is Rs 80. In order to increase profits, KFC should(1 Point)

Increase output

Offer a different variety of burgers

Don't change output

Decrease output

7.

Price and total revenue(1 Point)

Demand of a commodity is unitary elastic

Demand of a commodity is elastic

None of the above

Demand of a commodity is inelastic

8.

Value of resources owned and used by the firm itself is called(1 Point)

Fixed cost

Explicit cost

Economic cost

Implicit cost

9.

producer surplus can be identified in a graph as an area(1 Point)

above supply curve and below price line

below demand curve

below demand curve and above price line

below supply curve

10.

Technical relationship between inputs and output is(1 Point)

Supply function

Cost function

Demand function

Production function

11.

Two goods that are perfect complements will have indifference curves that are(1 Point)

upward sloping

right angles

straight lines

intersecting

12.

Demand for labor is called as(1 Point)

Impulsive demand

Option b and c both

Direct Demand

Derived demand

13.

Substitute can be identified if price elasticity of demand of two related goods is(1 Point)

Less than zero

greater than 1

Greater than zero

Less than 1

14.

Related goods are comprised of(1 Point)

normal and luxury goods

inferior and normal goods

All of the above

complements and substitutes

15.

A competitive, profit-maximizing firm hires workers until(1 Point)

Unemployment rates are zero

The value of the marginal product equals the wage

Marginal revenue equals zero

Marginal product equals zero

16.

Monopolistically competitive firms operate at(1 Point)

Excess Capacity

a and b both

no profit no loss

Efficient Scale

17.

When a demand curve is getting steeper and steeper then(1 Point)

Price elasticity of demand is moving from elastic to inelastic

None of the above

Price elasticity of demand is moving from inelastic to elastic.

Price elasticity of demand touches unitary elastic value

18.

The marginal product of Labor is defined as the increase in(1 Point)

output per additional unit of input

revenue per additional unit of input

Output per additional unit of revenue

revenue per additional unit of output

19.

If the price of airline tickets rises, what will happen to the demand curve for flight attendants?(1 Point)

It will shift to the left

It will shift to the right

There will be a movement along the curve

It will remain unchanged; price changes do not shift demand curves

20.

Monopolistically competitive firms operate at(1 Point)

Efficient scale, so that additional production would raise average total cost

Excess capacity, so that additional production would raise average total cost

Excess capacity, so that additional production would lower average total cost

Efficient scale, so that additional production would lower average total cost

21.

In a perfectly competitive market structure, crude oil is being used to produce fiberglass boats. An increase in the price of oil would shift(1 Point)

both the marginal cost curves of individual firms and the market supply curve to the left

the marginal cost curves of individual firms left and the market supply curve to the right

both the marginal cost curves of individual firms and the market supply curve to the right

the marginal cost curves of individual firms right and the market supply curve to the left

22.

Which of the following is inconsistent with price discrimination?(1 Point)

price per unit increases with the quantity a person purchases

colleges and universities provide financial aid to needy students

movie tickets are priced lower for children than adults

charging customers willing to clip coupons a lower price

23.

A schedule or curve that shows various combinations of goods x and y, a consumer can purchase given his income and prices of both goods is called(1 Point)

Iso profit curve

Budget line

Indifference curve

Iso quant

24.

When free entry is one of the attributes of a market structure, economic profits in the long run(1 Point)

Are equal to implicit cost

Are zero

Depend on whether or not firms produce identical products

Are greater than implicit cost

25.

Marginal product will be positive and diminishing if the production function slopes(1 Point)

upward and become steeper as more workers are hired

Downward and become s steeper as more workers are hired

upward and becomes flatter as more workers are hired

Downward and become s flatter as more workers are hired

please solve these mcqs