Answer the following mcqs

1)If demand is price inelastic, then:

a.Buyers do not respond much to a change in price

b.Buyers respond substantially to a change in price, but the response is very slow

c.Buyers do not respond much to advertising, fads or general changes in tastes

d.The demand curve is very flat

2)Which of the following is NOT a benefit of trade?

a.Consumers enjoy increased variety of goods

b.Trade reduces countries' comparative advantage

c.Producers sell to a larger market and may achieve lower costs through economies of scale

d.Competition from abroad may reduce market power of some firms, which would increase total welfare

3)Where does the price of a trade lie:

a.Between opportunity costs in each country

b.Between the prices in each country

c.Between cost and revenue in each country

d.There is no relationship

4)Which of the following is a loss making competitive firm?

a.TC - P x Q

b.P x Q - LRATC

c.(ATC - P) x Q

d.(P - ATC) x Q

5)What is the point of profit maximization?

a.P = MR

b.P MR

c.P = MC

d.MR = MC

6)Which of the following is NOT a characteristics of monopolistic competition?

a.Many sellers

b.Flat demand curve

c.Product differentiation

d.Free entry and exit

7)Select the definition of a regressive tax system

a.high-income taxpayers pay a smaller fraction of their income than low-income taxpayers

b.taxpayers pay the same fraction of income, regardless of income

c.high-income taxpayers pay a larger fraction of their income than low-income taxpayers

d.no-income taxpayers pay no proportion of their income