ECO401 GRAND QUIZ SOLVED 100% VERIFIED BY ADMIN (MID TERM SYLLABUS)
Q1: Whenever we have to give up higher and higher units of one good in order to produce each additional unit of other good, this principle shows:
A) The increasong opportunity cost (page7) (100% Sure)
B) The decreasong opportunity cost
C) The constant opportunity cost
D) All of the given options
Q2: The supply side of product market includes which of the following?
A) Consumption expenditures
B) Investment expenditures
C) Government purchases
D) Production of the business sector (page 12) (100% Sure)
Q3: Marginal rate of substitution is equal to:
A) The slope of indifference curve
B) The marginal rate of technical substitution
C) Input price ratio
D) Output price ratio (Page 46) (100% Sure)
Q4: Suppose that 24 units of output are produced by using 6 units of labor. Which of the following True in this syntax:
A) The marginal product of labor is 4. (Confirm) (100% Sure)
B) The total product of labor is 1/4.
C) The average product of labor is 4.
D) None of the given options.
Q5: Ali is running a surgical business and provides sugical tools to the local hospitals. For his company Ali falls in the category of __.
A) Labor
B) Money
C) Capital
D) Enterpreneurship (page3) (100% Sure)
Q6: The optimal point of consumption is that point where consumer surplus becomes:
A) Zero (page43) (100% Sure)
B) Maximum
C) Minimum
D) Positive
Q7: The percentage change in quantity demanded of a given good, with respect to the perecntage change in the price of "another" good is called:
A) Price of elasticity of demand
B) Income of elasticity of demand
C) Cross price of elasticity of demand (page29) (100% Sure)
D) Supply price elasticity
Q8: Suppose the demand curve of a commodity shifts downward and its supply curve is not changed. The equilibrium price of this good will:
A) Increase (Page 16)(100% Sure)
B) Decrease
C) Not change
D) All of the given options
Q9: It is expected that the sign of cross price elasticity of demand between two complementary goods would be:
A) Positive (page 37) (100% Sure)
B) Negative
C) Zero
D) Ambigious
Q10: When producers are unable to meet market demand for the product, this result as:
A) Surplus of goods
B) Market failure
C) Monopoly
D) Shortage of goods (page12) (100% Sure)
Q11: If inputs used in the production of wheat are increased gy 30% and wheat production by 20%, then there must be:
A) Increasing returns to factor
B) Constant returns to scale
C) Increasing returns to scale
D) Decreasing returns to scale (Page 58)(100% Sure)
Q12: Suppose Ali increases his consumption of oranges when his income rises. Thsi implies that for Ali, oranges are:
A) Normal good
B) Giffen good
C) Inferior good
D) Normal and Giffen good (page 12) (100% Sure)
Q13: Giffen goods are the sub category of:
A) Normal goods
B) Inferior goods (page 12) (100% Sure)
C) Luxury goods
D) Expensive goods
Q14: A normative economic statement is a statement
A) of fact
B) Used to test economic theory
A) What should be done to solve economic problems (page3) (100% Sure)
B) Of what will occur if certain assumptions are true
Q15: If the cross price elasticity of demand between two products is +3.5, then:
A) One of the products is expensive and one is relatively inexpensive.
B) One product is a normal good and the other is an inferior good.
A) The two products are complements.
B) The two product are substitures. (page37) (100% Sure)
Q16: When the price elasticity of demand for a good is greater than 1. We say that the demand is:
A) Elastic (Page 32) (100% Sure)
B) Inelastic
C) Unit elastic
D) Perfectly inelastic
Q17: A rational person does not act unless:
A) The action is ethical (confirm) (100% Sure)
B) Marginal costs of an action exceed marginal benefits
C) Marginal benefits of an action exceed marginal costs
D) The action makes money for the person
Q18: The demand for apples is expressed as Qd = 80-P
The supply of apples is expressed as Qs=3P
Refer to the above scenario, the equilibrium price of apple is:
A) Rs. 10
B) Rs. 15
C) Rs. 20 (Page 16) (100% Sure)
D) Rs. 25
Q19: Diminishing marginal returns implies:
A) Decreasing marginal costs
B) Increasing marginal costs (Page 56)(100% Sure)
C) Decreasing average variable costs
D) Decreasing average fixed costs
Q20: If demand for automobiles increases and the supply curve do not shift then result will be:
A) No change in price and quantity of automobiles.
B) Higher price and lower quantity of automobiles.
C) Higher price and more quantity of automobiles. (Page 18)(100% Sure)
D) Higher price and no change in quantity of automobiles.
Q21: When the price of one good change, the purchasing power of consumer changes i.e. the budget line shifts lead to;
A) No Effect
B) Price Effect
C) Substitution Effect
D) Income Effect (page 13) (100% Sure)
Q22: The law of diminishing marginal utility refers to the:
A) Units of good.
B) Idea that total utility is negative.
C) Decrease in total satisfaction as more units of a good are consumed.
D) Fall in additional satisfaction created by consumption of more and more units of good. (page42) (100% Sure)
Q23: If there is an increase in price of oil form Rs.100/liter to Rs.110/liter, the change in the quantity demanded of oil can be shown by:
A) Shifting the demand curve leftward
B) Shifting the demand curve rightward (page14) (100% Sure)
C) Moving down along the same demand curve
D) Moving up along the same demand curve
Q24: If the government imposes per unit tax on a good produced by a firm, then the equilibrium price of this good will:
A) Increase (Page 20) (100% Sure)
B) Decrease
C) Remain Unchanged
D) All of the given options
Q25: Suppose the income elasticity of demand for cars is equal to 2.5. Then given value shows that demand for cars is:
A) Unit elastic
B) Income inelastic
C) Income elastic (Page 36) (100% Sure)
D) Infinite elastic
Q26: The demand curve for eggs is downward-sloping. Suddenly the price of eggs increases from Rs. 80/- per dozen to Rs. 100/- per dozen. This will cause:
A) The demand curve for eggs to shift leftward
B) Quantity demanded of eggs decreases.
C) The demanded curve for eggs to shift rightward (Page 14) (100% Sure)
D) Quantity demanded of eggs increases.
Q27: Suppose the government sets minimum prices of crops to support farmers. This is an example of:
A) Prince ceiling
B) Price floor (Page 19)(100% Sure)
C) Free market equilibrium
D) Shortages
Q28: Inferior goods are those goods whose quantity demanded goes down as:
A) Consumer income remains constant
B) Consumer income increases (Page 12) (100% Sure)
C) Consumer income decreases
D) Price of goods increases
Q29: The productoin possibility frontier (PPF) shows all combinations of goods that:
A) Society most desires
B) Lie outside the curve
C) Reflect full production
D) An economy can produce with all available resources within the given time period. (Page 7) (100% Sure)
Q30: Setting up of credit information bureaus by banks is an example of:
A) Internal economies of scale
B) Internal diseconomies of scale
C) external economies of scale (Page 58) (100% Sure)
D) Returns to factor
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