ECO401 GRAND QUIZ SOLVED MID TERM FILE 2|| 100% VERIFIED|| VURANK

ECO401 GRAND QUIZ SOLVED 100% VERIFIED BY ADMIN (MID TERM SYLLABUS)

Q1: If a firm's long-run average cost of production decreases as a result of increase in production, then the firm is experiencing.

A) Economies of scale (page58) (100% Sure)

B) Diseconomies of scale

C) Diminishing returns to scale

D) Diminishing returns to factors

Q2: Suppose a firm produces 500 units of output by employing 30 units of labour and 35 units of capital. If MPPL and MPPK are 20 and 10 respectively, then MRTS is:

A) 2 (MRTS = ^MPPL⁄ _MPPK = ²⁰⁄ ₁₀ = 2) (100% Sure)

B) 4

C) 6

D) 8

Q3: The demand for oranges is expressed as Qd = 100-P
The supply of oranges is expressed as Qs=4P
Refer to the above scenario, if the equilibrium price of oranges is Rs.20, the equilibrium quantity of ranges is:

A) 55

B) 60

C) 80 (page16)(100% Sure)

D) 100

Q4: Benefit of satisfaction derived from the consumption of goods and services is called:

A) Utility (page42)(100% Sure)

B) Desite

C) Wish

D) Craving

Q5: Which of the following types of elasticity is calculated as the percentage change in quantity demanded due to percentage change in price?

A) Price elasticity of demand (page28)(100% Sure)

B) Income elasticity of demand

C) Cross price elasticity of demand

D) Price elasiticity of supply

Q6: If the quantity of all inputs are increased by 30% and output expands by 25%, then the firm is experiencing:

A) Constant returns to scale

B) Increasing returns to scale (page58) (100% Sure)

C) Decreasing returns to scale

D) None of the above

Q7: In case of increasing returns to scale isoquants.

A) Are equally spaced

B) Become further and further apart from each other

C) Becomes closer and closer to each other (page60)(100% Sure)

D) Undergo no change

Q8: The indifference curve as a straight line indicates that the two goods are perfect,

A) Compliments

B) Substitutes (page46) (100% Sure)

C) Luxuries

D) Food

Q9: The substitution effect of a price rise is always:

A) Undefined

B) Positive

C) Zero

D) Negative (page49) (100% Sure)

Q10: Diminishing marginal implies:

A) Decreasing marginal costs

B) increasing marginal costs (page99)(100% Sure)

C) Decreasing average variable costs

D) Decreasing average fixed costs

Q11: The increment to total costs of producing an additional unit of some goods or service is known as:

A) Marginal revenue

B) Marginal cost (page7) (100% Sure)

C) Average revenue

D) Average cost

Q12: Advertising by a rival industry is and example of:

A) internal economies of scale

B) internal dieconomies of scale

C) external economies of scale (page58) (100% Sure)

D) Returns to factor

Q13: The concave shape of the production possibility frontier for two goods X and Y illustrates:

A) Increasing opportunity costs for both goods (page8) (100% Sure)

B) Increasing opportunity costs for goods X but not for good Y

C) Increasing opportunity costs for goods Y but not for good X

D) Constant opportunity costs for both goods

Q14: The percentage change in quantity demanded given a percentage change in consumers's income is known as:

A) Price elasticity of demand

B) Income elasticity of demand (page29) (100% Sure)

C) Supply price elasticity

D) Cross price elasticity

Q15: A line which charts out all the different points on which the consumers is indifferent with respect to the utility he derives, is called:

A) Budget line

B) Indifference curve (page46) (100% Sure)

C) Supply curve

D) Demand curve

Q16: Subcategory of Inferior goods is:

A) Giffen Goods (page12) (100% Sure)

B) Normal goods

C) Luxury goods

D) Expensive goods

Q17: Which one of the following economic system is prevailing in Pakistan?

A) Dictatorship

B) Commad economy

C) Capitalist economy

D) Mixed economy (page4) (100% Sure)

Q18: If sugar and tea are considered to be perfect complements, then a decrease in price of sugar will lead to:

A) Decrease in quantity demanded of sugar

B) Decrease in quantity demanded of tea

C) Increase in quantity demanded of tea (CONFIRM) (100% Sure)

D) Increase in quantity supplied of tea

Q19: As more and more labour is used, diminishing returns to labour set in, thus MPPL will:

A) Rise

B) Fall (page59) (100% Sure)

C) Remain constant

D) None of the above

Q20: Engel curve shows the positive relationship between quantity demanded of normal good and:

A) Price

B) Supply

C) Income (page48) (100% Sure)

D) Money supply

Q21: Difference between the amount of money a consumer is wiling to pay for a good and the actual price at which he/she puchases that good is known as:

A) Consumer surplus (page43) (100% Sure)

B) Opportunity cost

C) Total utility

D) Marginal utility

Q22: When railways authority raises its fares, it may experience an increase in total revenue. This suggest that demand is:

A) Perfectly price elastic

B) Price inelastic (

C) Price elastic page28) (100% Sure)

D) Unit price elastic

Q23: A farmer has produced 500 tones wheat on 1 acre land by employing 10 workers. This average phisically product in the case would be:

A) 5

B) 10

C) 50 (page57) (100% Sure)

D) 500

Q24: The law of diminishing marginal utility indicates that marginal utlity curve is:

A) Vertical

B) U shaped

C) Upward sloping

D) Downward sloping (page42) (100% Sure)

Q25: Which of the following is price taker firm?

A) Monopoly

B) Monopolistic competition

C) Perfect competition (page65) (100% Sure)

D) All of the given options

Q26: The science which studies human behavior as a relationship between ends and scarce which have alternative uses. " It is the definition of":

A) Economics (page3) (100% Sure)

B) Physics

C) Chemistry

D) Sociology

Q27: The more inelastic the demand, the more of the tax's burden will fall on:

A) Consumers (page38) (100% Sure)

B) Producers

C) Government

D) Middle man

Q28: A line which charts out all the different combinations of two goods which a consumer can purchase, is called:

A) Budget line

B) Indifference Curve (page46) (100% Sure)

C) Supply Curve

D) Demand Curve

Q29: Marginal rate of technical substitution is the slope of:

A) Isocost curve

B) Isoquant curve

A) Budget line

B) Indifference curve (page46) (100% Sure)

Q30: When market demand for the product is less than market supply of product, this results as:

A) Surplus of goods (page12) (100% Sure)

B) Shortage of goods

C) Market failure

D) All of the given option