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: