McqMate
| 1. |
When individuals income falls (everything remain the same) his demand for a normal good |
| A. | rises |
| B. | falls |
| C. | remains the same |
| D. | negative |
| Answer» B. falls | |
| 2. |
Cardinal utility analysis to consumer equilibrium was developed by |
| A. | marshall |
| B. | hicks and allen |
| C. | geremy bentham |
| D. | gossen |
| Answer» A. marshall | |
| 3. |
MC at any level of output is given by |
| A. | slope of tc curve |
| B. | slope of tvc curve |
| C. | slope of either tc or tvc |
| D. | slope of tfc |
| Answer» C. slope of either tc or tvc | |
| 4. |
If a firm’s average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which one among the following is the marginal cost of producing the 7th unit |
| A. | 46 |
| B. | 2 |
| C. | 36 |
| D. | 42 |
| Answer» A. 46 | |
| 5. |
The cost that cannot be recovered once spent |
| A. | accounting cost |
| B. | fixed cost |
| C. | implicit cost |
| D. | sunk cost |
| Answer» B. fixed cost | |
| 6. |
The saucer-type of modern Short run Average Variable Cost (SAVC) represents |
| A. | excess capacity |
| B. | managerial costs |
| C. | load factors |
| D. | reserve capacity |
| Answer» B. managerial costs | |
| 7. |
The Long run Average Cost curve (LAC) in modern cost theory is roughly |
| A. | u shaped |
| B. | saucer shaped |
| C. | l shaped |
| D. | rectangular hyperbola |
| Answer» D. rectangular hyperbola | |
| 8. |
Under increasing returns to scale, which of the following is the nature of the long run average cost curve? |
| A. | downward sloping |
| B. | upward rising |
| C. | parallel to output axis |
| D. | identical to short run average cost curve |
| Answer» D. identical to short run average cost curve | |
| 9. |
Which of the following has a U shape? |
| A. | average fixed cost curve |
| B. | total cost curve |
| C. | average variable cost curve |
| D. | total variable cost curve |
| Answer» C. average variable cost curve | |
| 10. |
AFC curve will always be |
| A. | rectangular hyperbola |
| B. | u shaped |
| C. | horizontal |
| D. | downward sloping |
| Answer» D. downward sloping | |
| 11. |
Implicit cost of a factor of production is determined by its |
| A. | sunk cost |
| B. | variable cost |
| C. | fixed cost |
| D. | opportunity cost |
| Answer» A. sunk cost | |
| 12. |
Economic cost include both |
| A. | explicit cost and implicit cost |
| B. | fixed cost and variable cost |
| C. | explicit cost and prime cost |
| D. | money cost and sunk cost |
| Answer» A. explicit cost and implicit cost | |
| 13. |
The U shape of MC curve reflects |
| A. | economies of scale |
| B. | law of increasing returns |
| C. | reserve capacity |
| D. | law of variable proportion |
| Answer» D. law of variable proportion | |
| 14. |
Envelope curve is |
| A. | long run marginal cost curve |
| B. | long run average cost curve |
| C. | total cost curve |
| D. | none of the above |
| Answer» D. none of the above | |
| 15. |
In long run, which factor of production is fixed? |
| A. | labour |
| B. | capital |
| C. | building |
| D. | none of the above |
| Answer» B. capital | |
| 16. |
The U shape of the average total cost curve reflects |
| A. | ldmu |
| B. | the law of variable proportions |
| C. | consumer’s surplus |
| D. | reserve capacity |
| Answer» A. ldmu | |
| 17. |
The total fixed cost is a |
| A. | horizontal straight line |
| B. | vertical |
| C. | hyperbola |
| D. | u shaped |
| Answer» A. horizontal straight line | |
| 18. |
When AC minimum in short run |
| A. | ac < mc |
| B. | ac > mc |
| C. | ac = mc |
| D. | any of above is possible |
| Answer» B. ac > mc | |
| 19. |
The shape of TVC and TC are |
| A. | rectangular hyperbola |
| B. | inverse ‘s’ shape |
| C. | horizontal straight line |
| D. | l shaped |
| Answer» A. rectangular hyperbola | |
| 20. |
The cost expressed not in terms of money but in terms of efforts of workers undergone for making the commodity |
| A. | opportunity cost |
| B. | real cost |
| C. | sacrifice cost |
| D. | implicit cost |
| Answer» C. sacrifice cost | |
| 21. |
The MC curve cuts the AC curve at |
| A. | the maximum point |
| B. | the initial point |
| C. | the minimum point |
| D. | any point |
| Answer» B. the initial point | |
| 22. |
The minimum point of ATC is at.............. position of the minimum point of AVC |
| A. | right |
| B. | left |
| C. | same |
| D. | all of above can be |
| Answer» B. left | |
| 23. |
If the long run cost curve shifts down wards it is an indication of |
| A. | technological progress |
| B. | lower factor prices |
| C. | both of these |
| D. | reserve capacity |
| Answer» C. both of these | |
| 24. |
The U shape of the LAC reflects |
| A. | law of variable proportions |
| B. | laws of returns to scale |
| C. | reserve capacity |
| D. | none of these |
| Answer» A. law of variable proportions | |
| 25. |
A production possibility curve is concave to the point of origin because of |
| A. | increasing marginal rate of transformation (mrt) |
| B. | increasing marginal opportunity cost (moc) |
| C. | both of the above |
| D. | decreasing marginal rate of transformation |
| Answer» C. both of the above | |
| 26. |
The deductive method is also called |
| A. | abstract |
| B. | analytical |
| C. | priori method |
| D. | all the above |
| Answer» D. all the above | |
| 27. |
An Essay on the Nature and Significance of Economic Science was written by |
| A. | adamsmith |
| B. | alfred marshall |
| C. | lord robbins |
| D. | samuelson |
| Answer» C. lord robbins | |
| 28. |
Other things being equal a decrease in demand can be caused by |
| A. | a fall in price of the commodity |
| B. | a fall in income of the consumer |
| C. | a rise in price of the substitute |
| D. | none of these |
| Answer» B. a fall in income of the consumer | |
| 29. |
When price of a product falls, more of it is purchased because of |
| A. | the substitution effect |
| B. | the income effect |
| C. | neither substitution effect nor income effect |
| D. | both the substitution and income effects |
| Answer» D. both the substitution and income effects | |
| 30. |
“Utility or satisfaction is a subjective concept; therefore it could only be ranked”. The statement supports |
| A. | cardinal utility theorist |
| B. | ordinal utility theorist |
| C. | behavioral theorist of the firm |
| D. | none of the above |
| Answer» B. ordinal utility theorist | |
| 31. |
The basic doctrine of consumers surplus is based on |
| A. | indifference curve analysis |
| B. | revealed preference theory |
| C. | law of substitution |
| D. | law of diminishing marginal utility |
| Answer» D. law of diminishing marginal utility | |
| 32. |
According to Marshall, The law of diminishing marginal utility |
| A. | applies on money in the manner in which it applies on commodity |
| B. | do not applies on money except bank money |
| C. | does not applies on bank money but applies on cash |
| D. | applies on all commodities except money |
| Answer» D. applies on all commodities except money | |
| 33. |
Indifference curve is always |
| A. | concave to the origin |
| B. | convex to the oringin |
| C. | l shaped |
| D. | a straight line |
| Answer» B. convex to the oringin | |
| 34. |
Engel curve for giffen good is |
| A. | positively sloped |
| B. | negatively sloped |
| C. | horizontal straight line |
| D. | vertical straight line |
| Answer» B. negatively sloped | |
| 35. |
Price effect is |
| A. | income effect – substitution effect |
| B. | substitution effect – income effect |
| C. | income effect + substitution effect |
| D. | income effect + substitution effect- negative effects |
| Answer» C. income effect + substitution effect | |
| 36. |
For a giffen good, when price falls |
| A. | demand increases at a faster rate |
| B. | demand decreases |
| C. | demand remains constant |
| D. | demand curve has a negative slope |
| Answer» B. demand decreases | |
| 37. |
Inferior goods are the goods with |
| A. | falling income effect |
| B. | rising income effect |
| C. | negative income effect |
| D. | positive marshallian effects |
| Answer» C. negative income effect | |
| 38. |
Which of the following is called gossans first law |
| A. | law of substitution |
| B. | law of equi marginal utility |
| C. | law of diminishing marginal utility |
| D. | none of the above |
| Answer» C. law of diminishing marginal utility | |
| 39. |
When individuals income falls (everything remain the same) his demand for an inferior good |
| A. | rises |
| B. | falls |
| C. | remains the same |
| D. | we cannot say without additional information |
| Answer» A. rises | |
| 40. |
According to Marshall consumer surplusis: |
| A. | total utility – marginal utility |
| B. | total utility + marginal utility |
| C. | total utility derived – price |
| D. | price – marginal utility |
| Answer» C. total utility derived – price | |
| 41. |
If both the products X & Y are normal goods |
| A. | slopes down towards right |
| B. | slopes up towards right |
| C. | slopes up towards left |
| D. | slopes down towards left |
| Answer» B. slopes up towards right | |
| 42. |
Which of the following statement is TRUE with regard to total utility |
| A. | total utility is the utility derived from last unit |
| B. | total utility increases at a diminishing range |
| C. | as consumption increases total utility goes on diminishing |
| D. | at saturation point total utility is negative |
| Answer» B. total utility increases at a diminishing range | |
| 43. |
If negative income effect is less than positive substitution effect : the product will be |
| A. | a normal good |
| B. | an inferior good |
| C. | a giffen good |
| D. | a complementary good |
| Answer» B. an inferior good | |
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