Quiznetik

Mathematical Economics | Set 2

1. ______ function expresses the relationship between price of the good and quantity of the good demanded.

Correct : C. Demand

2. ______ function expresses the relationship between price of the good and quantity of the good supplied.

Correct : A. Supply

3. Function which map the relation between the physical measure of money and the perceived value of money is _____

Correct : D. Utility

4. _______ function was designed by J M Keynes to show the relationship between real disposable income and consumer spending.

Correct : A. Consumption

5. Given the consumption function C = a + bY, where ‘a’, the intercept, represents_____

Correct : B. autonomous consumption

6. Given the consumption function C = a + bY, the slope ‘b’ represents:

Correct : C. MPC

7. For equilibrium market, the condition is____

Correct : C. demand = supply

8. Given TR = 10x, TC = 5x+2, profit function is :

Correct : A. 5x – 2

9. Demand function for a commodity is D = 44 – 7P and supply function S = 2P –10, then the equilibrium price is:

Correct : B. 6

10. If u = xn is total utility, the functions of marginal utility u will be:

Correct : B. nxn-1

11. When the total revenue functions is R = 100−X2, the marginal revenue is :

Correct : C. −2X

12. The cost per output is given by C = 2x + 27. Then the marginal cost when x = 5 is:

Correct : D. 47

13. When elasticity of demand is 2, the demand will be:

Correct : C. Relatively elastic

14. The Price elasticity of demand for a product is 1.5 and its MR = 8, find its price:

Correct : B. 24

15. The elasticity of demand for the demand curve of a firm under perfect competition is

Correct : D. α

16. Given a total utility function, Marginal utility is obtained by finding ______

Correct : A. First derivative

17. Mathematically ____ is the first derivative of the consumption function.

Correct : B. MPC

18. ____ indicates what proportion of the increased income will be saved.

Correct : A. MPS

19. _____ measures the change in TP due to a one unit change in the quantity of labour used:

Correct : D. MPPL

20. ____ refers to the change in total cost (TC) due to the production of an additional unit of output.

Correct : B. MC

21. 𝑀𝑃𝐿 𝑀𝑃𝐾 = ____

Correct : C. MRTSLK

22. The slope of ___curve will be positive if and only if the marginal cost curve lies above the AC curve.

Correct : A. AC

23. At a price of Rs11.00, quantity demanded is 90; and at a price of Rs.9.00, quantity demanded is 110. The price elasticity of demand is:

Correct : D. -1.22

24. For complementary goods the cross elasticity of demand will be ______

Correct : A. negative

25. Necessities have _____ elasticity of demand of between 0 and +1.

Correct : C. income

26. If your income doubles and the prices of the goods you buy double, then your demand for these goods will likely ________

Correct : B. not change

27. Football socks are found to have a cross-elasticity of demand of −2 with respect to product Y. Which of the following products is most likely to be product Y:

Correct : D. Football boots

28. The process of finding relative maximum or minimum of a function is known as :

Correct : A. optimization

29. A ____ is a point at which a function is at a relative maximum or minimum:

Correct : B. relative extremum

30. The value of Lagrange multiplier λ gives the approximate change in the objective function caused by a small change in the:

Correct : A. constant of the constraint

31. The first derivative measures the rate of change or ____ of a function:

Correct : C. slope

32. For a cost function TC = 3Q2 + 7Q +12, MC is :

Correct : B. 6Q + 7

33. MR is :

Correct : D. the first order derivative of TR

34. In optimisation, with the first order derivative equal to ___ and the second order derivative ___ the function is at a maximum.

Correct : B. 0, < 0

35. When we optimise a function, with the first order derivative equal to ___ and the second order derivative ___ the function is at a relative minimum.

Correct : C. 0, > 0

36. In Cobb Douglas Production of functions, the elasticity of Substitutions is :

Correct : B. equal to one

37. Feasible solution of LPP is:

Correct : B. Values of decision variables satisfy the objective functions

38. In linear programming, the dual of maximization is equal to:

Correct : A. minimization

39. Linear Programming deals with:

Correct : D. All the above

40. A production function is said to be _____, if, when each input factor is multiplied by a positive real constant k, the constant can be completely factored out:

Correct : A. homogenou

41. ____ functions are a special class of homogeneous function in which the marginal rate of Technicalsubstitution is constant along the function.

Correct : B. Homothetic

42. In linear programming, the number of technical constraints will be ___the number of the factors of production:

Correct : D. the same as

43. In linear programming, _____are expressed as inequalities, rather than equalities.

Correct : A. the technical constraints

44. In linear programming, _____ expresses the necessity that the levels of production of the commodity cannot be negative, that is, it should be either positive or zero.

Correct : C. non negativity constrains

45. In input-output analysis, ___ represents in monetary terms or quantitative terms all the transactions of the economic system.

Correct : A. the transaction matrix

46. In input-output analysis,____ shows the number of units of any industry’s output needed to produce one unit of another industry’s output.

Correct : B. The technical coefficients

47. In input-output analysis,____ is obtained by dividing the input of the desired sector by the total output of the same sector.

Correct : B. a technology coefficient

48. In input-output analysis,when the technical coefficients are put in the form of a matrix, we get the______

Correct : D. the

49. In input-output analysis,if the exogenous sectors of the open input output model is absorbed in to the system as just another sector _____

Correct : C. Leontief closed model

50. In an input-output matrix, the element ____shows the input industry II takes from industry I.

Correct : A. a12

51. In an input-output matrix, the principal diagonal of this matrix represents the amount of input each industry takes from ___output.

Correct : D. its own output

52. P = a – bQ is the demand cure of a monopolist. Which of the following statements is true?

Correct : B. The rate of decline of MR is twice the rate of decline of AR

53. The best or optimum level of output for a perfectly competitive firm is given by the point:

Correct : D. MR = MC and MC is rising

54. In a monopoly, marginal revenue is:

Correct : B. less than AR

55. In monopoly, when the demand curve is elastic, MR is:

Correct : C. positive

56. In monopoly, if p = Rs. 10 at the point on the demand curve where η = 0.5, MR is:

Correct : D. −10

57. If the demand curve for a monopolist is P = 100 -20Q, then the marginal revenue of that firm is given by the equation:

Correct : D. MR = 100 − 40Q

58. If the demand facing a monopolist is P = 100 − 10Q and marginal cost is constant at 20, then the profit maximizing price and quantity for this monopolist are:

Correct : A. P = 60 and Q = 4

59. A profit-maximizing monopoly firm with a demand curve P = 50 − Q is a perfect pricediscriminator. If it has marginal costs of Rs. 10/unit and fixed costs of Rs. 30, it will produce _____ units of output and will make______ profit.

Correct : B. 40; Rs. 770

60. A price discriminating Monopolist is considered more efficient than a single prices monopolist because:

Correct : C. a price discriminating Monopolist produces a higher level of output

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

Correct : D. Firms in monopolistic competition have some degree of market power

62. A perfectly competitive firm should reduce output or shut down in the short run if market price is equal to marginal cost and price is:

Correct : D. less than average variable cost

63. The market demand curve for a perfectly competitive industry is QD = 12 - 2P. The market supply curve is QS = 3 + P. The market will be in equilibrium if:

Correct : B. P = 3 and Q = 6

64. In the short run, a monopolist will shut down if it is producing a level of output where marginal revenue is equal to short-run marginal cost and price is:

Correct : A. less than average variable cost