QUESTION-1:

1.If the demand for agricultural products is inelastic:

a.as the prices decrease, the revenues earned by producers increase;

b.as the prices decrease, the revenues earned by producers decrease;

c.rising prices do not lead to differentiation in producers' incomes;

d.percentage decrease in prices is lower than the percentage increase in demand

2.In indifference curve analysis, the consumer will be in equilibrium when-

a.A given budget line must be tangent to an indifference curve

b.The indifference curve must be convex to the origin at the point of tangency

c.Both a & b

d.None of the above.

3.Production function provides measurements of-

a.The marginal productivity of the factors of production;

b.The marginal rate of substitution and the elasticity of substitution;

c.The return to scale;

d.All of the above.

4.In Cobb- Douglas production function, the sum of its exponents measures-

a.Returns to Scale;

b.Factors intensity;

c.Marginal productivity of factors;

d.Elasticity of substitution

5.Calculate the Average Variable Cost (AVC), for a level of production Q = 20, knowing that the total cost function is: TC = 200 + 3Q + 2Q²

a.1060

b.53

c.43

d.100

6.A Firm's Average Total Cost is $80, its Fixed Cost is $1000 and its output level is 100 units then Average Variable Cost will be;

a.$ 40

b.$ 50

c.$ 60

d.$ 70

7.One difference between perfect competition and monopolistic competition is that:

a.Monopolistic competition has barriers to entry, perfect competition has none.

b.There are a smaller number of firms in perfectly competitive industries.

c.In perfect competition, the products are slightly differentiated between firms.

d.Firms in monopolistic competition have some degree of market power.

8.Under kinked demand theory the prices of oligopolists are predicted to be rather rigid or 'sticky'.

a.Trueb. False