Question 30 The equilibrium price and quantity of good X are $10 and 100 respectively. Government reduced the price of X to $8. As a result, quantity demanded increased to 150 but quantity supplied went down to 80. So, the market outcome is

Question 30 options:

surplus of 50

shortage of 50

shortage of 1600

shortage of 560

Question 31

Minimum wage is

positive concept

normative concept

market concept

equilibrium concept

Question 32 Production function is

	a technological relationship between inputs and output
	expressed as a dependent-independent relationship between output and one or more inputs
	may be a short run or a long run concept
	all of the above

Question 33 (5 points)

Assume the following production function: Q = f(L,K), where, Q= output, L = units of labor, K = units of capital. Now assume the producer found the following result in the short run

MPL > MPK

In order to maximize profit,the produce should

continue production with the same quantity of labor and capital

should substitute labor for capital until MPL = MPK

should substitute capital for labor until MPL = MPK

should continue production until MPK > MPL

Question 34

In which of the four output markets P = MC?

perfect competition

monopolistic competition

oligopoly

monoply

Question 35

In a perfectly competitive market, pure profit does not exist in the long run because of the assumption of

large number of buyers and sellers

homogeneous product

single price

free entry and exit of firms

Question 36

In which of the four markets, the producer may charge demand price?

perfect competition

monopolistic competition

oligopoly

monopoly

Question 37

Which economic condition must be satisfied for price discrimination to be possible?

Segmenting the market

no resale of the product

different elasticity of demand of the product

all of the above

Question 38

In an oligopoly market, price is not determined at the point of

MR =MC because

oligopolies are big business and they have significant market power

oligopolies usually collude explicitly to fix price

there is no unique MR curve

all of the above

Question 45

Compared to a competitive firm, a monopolist

produces less

charges higher price

may not follow MR = MC rule in setting price

all of the above