ECO401 GRAND QUIZ SOLVED 100% VERIFIED BY ADMIN (MID TERM SYLLABUS)
Q1: In the presence of diminshing marginal rate of technical substitution between labor and capital, output can be kept unchanged only if:
A) Equal successive sacrifices of capital go hand in hand with ever smaller increase of labor.
B) Equal successive sacrifices of capital go hand in hand with ever smaller sacrifices of labor.
C) Equal successive increase in labor go hand in hand with ever smaller increases in capital.
D) Equal successive increase in labor go hand in hand with ever smaller sacrifices of capital. (page60) (100% Sure)
Q2: Suppose a firm is producing output by using two inputs labour and capital paying wages to labout and rest to capital. If prices of both inputs decrease then:
A) The iso-cost line shirfts outward (page69) (100% Sure)
B) The iso-cost line shifts inward
C) No change in iso-cost line
D) None of the above
Q3: Sugar can be produces from sugar beets. If the price of sugar beets falls, then:
A) The demand curve for sugar would shift right
B) The demand curve for sugar would shift left
C) The supply curve for sugar would shift right (page16) (100% Sure)
D) The supply curve for sugar would shift left
Q4: Which of the following is the slope of budget line:
A) -Px/Py (page 45) (100% Sure)
B) Px/Py
C) Px+Py
D) -Py/Px
Q5: Anam is spending all of her income on buying medicines and clothes. Which of the following factors will shift the budget line inward:
A) An increase in Anam's income
B) A decrease in Anam's income (page47) (100% Sure)
C) A decrease in price of medicines
D) A decrease in price of clothes
Q6: Resources have alternative uses in economics because:
A) Resources are abundant
B) Resources are unlimited
C) Resources are scarce (page1) (100% Sure)
D) Resources are renewal
Q7: Which of the following true about total cost curve:
A) it relatives output with total cost
B) it is usually upward sloping
C) it gets steeper as ouput rises
D) All the given options are true (page62) (100% Sure)
Q8: The law supply states that the quantity supplied will go up if:
A) Price goes down
B) Incomes goes up
C) Income goes down
D) Prices goes up (page13) (100% Sure)
Q9: Which of the following branch of economics that not only describes how interest rate affects infation but it also provides guidance that what policy should be followed?
A) Positive economics
B) Nomative economics (page1) (100% Sure)
C) Micro economics
D) Macro economics
Q10: If a 4% rise in consumer's incomes causes an 8% rise in products demand, the income elasticiy of demand of product will be:
A) 0.5
B) 1.5
C) 2 (page26) (100% Sure)
D) 2.5
Q11:Product markets exchange:
A) Consumers goods puchased by the household sector.
B) Capital investment goods purchased by the business sector.
C) Goods puchased by government and foreign sectors.
D) All of the given options. (page10) (100% Sure)
Q12: which of the following indicates optimal consumption point for the consumer:
A) Px/Py = ∆Y/∆X = MUx/MUy. (page46)(100% Sure)
B) Px/Py = ∆X/∆Y = MUx/MUy.
C) Py/Px = ∆Y/∆X = MUx/MUy.
D) Px/Py = zero = MUx/MUy.
Q13: Suppose total revenue of firm remains unchanged due to increase in the price of a good. This shows that demand of this good is:
A) Price elastic
B) Price inelastic
C) perfectly Price inelastic
D) Unit Price elastic (page32) (100% Sure)
Q14: If a decrease in price increases total revenue:
A) Demand is elastic (page30) (100% Sure)
B) Demand is inelastic
C) Supply is elastic
D) Supply is inelastic
Q15: A firm owned by a large number of changing shareholders is a:
A) Sole proprietorship
B) Partnership
C) Limited company (page53) (100% Sure)
D) None of the above
Q16: The demand for books is expressed as Qd = 100-P
The supply of books is expressed as Qs=5P
Refer to the above scenario, the equilibrium price of book is:
A) Rs. 15
B) Rs. 20 (page15) (100% Sure)
C) Rs. 23
D) Rs. 25
Q17: What would cause the supply curve of sugarcane to shift to the right:
A) An increase in the prices of inputs
B) A decrease in the number of sugarcane growers
C) An increase in wages paid to agricultural workers.
D) Technological improvement which lowers the costs of production. (page16) (100% Sure)
Q18: Consumers can make optimal choices by using which of the following analysis?
A) Cost and benefit analysis (page4) (100% Sure)
B) Cost and profitability analysis
C) Cost and feasibility analysis
D) Cost and coherent analysis
Q19: Which of the following is true for constant returns to scale?
A) 1% increase in the amount of all the factors employed causes 2% increase in output
B) 1% increase in the amount of all the factors employed causes 1% increase in output (page56) (100% Sure)
C) 1% increase in the amount of all the factors employed causes 0.5% increase in output
D) 1% increase in the amount of all the factors employed causes 5% increase in output
Q20: If there is a reduction in price of resources used for production of commodity, then supply curve of that commodity will:
A) Shift rightward (page12) (100% Sure)
B) Shift leftward
C) Remain same
D) Remain undetermined
Q21:Ali is running a surgical business and provides surgical tools to the local hospitals. For his company, surgical tools fall in the category of ___.
A) Labor
B) Money
C) Capital (page1) (100% Sure)
D) Enterpreneurship
Q22: The quantity of a good that sellers wish to sell at each conceivable price is called:
A) Supply (page13) (100% Sure)
B) Demand
C) Shortage
D) Surplus
Q23: Production possibility frontier analysis assumes that resources:
A) Are increased in production
B) Are saved for emergency used
C) Are used to produce thousands of goods
D) Are used in a technically efficient way (page5) (100% Sure)
Q24: Price floor results in:
A) Equilibrium
B) Excess demand
C) Excess Supply
D) All of the given options
(page17) (100% Sure)
Q25: Which of the following moves the economy from equilibrium to a state of shortages?
A) Price floor
B) Price ceiling
C) Per unit tax imposed by the government (page16) (100% Sure)
D) Subsidy given by the government
Q26: The supply side of product market includes which of the following?
A) Consumption expenditures
B) Investment excpenditures
C) Government purchases
D) Production of business sector (page10) (100% Sure)
Q27: The cost which already has been incured and cannot be recovered to any significant degree is known as:
A) Sunk cost (page59) (100% Sure)
B) Variable cost
C) Total cost
D) Fixed cost
Q28: Suppose firm A is producing 100 units of toys by emoploying 5 units of capital and 10 units of labour. Let's suppose units of capital and labour are increased by 50 percent. the increasing returns to scale will imply that
A) The production of toys increases 50 percent
B) The production of toys increases by less than 50 percent
C) The production of toys decreases by more than 50 percent.
D) The production of toys increases by more than 50 percent. (Confirm) (100% Sure)
Q29: If demand of a good increases and its supply curve is unchanged, then the equilibrium price of this good will:
A) Decrease
B) Increase (page18) (100% Sure)
C) Not change
D) All of the given options
Q30: ____ is the rate at which a firm can substitute capital for labor and hold output constant.
A) Diminishing marginal returns
B) Marginal rate of substitutions
C) Marginal rate of productions
D) Marginal rate of technical substitutions (page58) (100% Sure)
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