Microeconomics REVENUE: 1) Choose the correct alternative for the following questions:

(i) The total revenue from the sale of 5units of a good is `100. Marginal revenue from the 6th unit is `8. At what price are 6 units sold? (a) `28 per unit (b) `20 per unit (c) `18 per unit (d) `12 per unit

(ii) AR curve is downward sloping: (a) when price initially rises at an increasing rate, then at a diminishing rate. (b) when price remains same at all levels of output. (c) in case of perfect competition. (d) when higher units of output can be sold only by reducing the price.

(iii) If a firm's total revenue curve is an upward sloping straight line which passes through the origin, then: (a) Price > Marginal Revenue (c) Price < Marginal Revenue (b) Price = Marginal Revenue (d) None of these

2) _______________is the addition to total revenue generated from the sale of an additional unit of output.

3) The total revenue of a firm increased by `5,400, when sales increased from 35 units to 50 units. Calculate marginal revenue of the firm.

4) Discuss the relationship between AR and MR when: (a) A firm is able to sell higher units of output only when price is lowered. (b) A firm is able to sell all units of output at the same price.

5) What will be the effect of the following changes in TR on MR? (a) TR increases at a decreasing rate (b) TR increases at a constant Rate

7) State true or false giving reasons: (a) When MR is zero, AR reaches a maximum. (b) Both AR and MR can be zero or negative at a non-zero output level. (c) TR falls when MR falls. 1