Quiznetik

Principles of Micro Economics | Set 2

1. Measurable utility is the postulate of:

Correct : A. Neo-Classical school

2. Which of the following is Gossen’s first law:

Correct : A. Law of Diminishing Marginal Utility

3. In the case of a free good, the consumer will be in equilibrium when:

Correct : B. MU = 0

4. Change in demand due to a change in the price of related good :

Correct : A. Cross demand

5. The Price and quantity relationship for an inferior good is:

Correct : B. Inverse

6. In the case of normal goods, the quantity demanded varies inversely with:

Correct : A. Price of good

7. Which of the following is a cardinalist approach to demand analysis:

Correct : A. Marshallian utility analysis

8. The convexity of an indifference curve shows:

Correct : A. Diminishing MRS

9. A movement from one point to another along an indifference curve makes the satisfaction:

Correct : C. Unaltered

10. In the case of an indifference curve

Correct : B. dU/dX = dU/dY

11. An Indifference Curve to the right of another represents combinations which are:

Correct : B. Preferable

12. As moving from left to right through an indifference curve, the MRS of X for Y

Correct : C. Decreases

13. The slope of an indifference curve represents:

Correct : C. MRSx,y

14. In the case of perfect complementaries, the MRS between goods is:

Correct : A. Zero

15. In a combination of X and Y, if price of Y alone changes, the X intercept will :

Correct : C. Not be changed

16. At the point of tangency of an indifference curve with a budget line:

Correct : A. MRSxy =Px/Py

17. Commodities bought in larger quantities when income rises are called:

Correct : A. Normal goods

18. Change in demand due to change in relative price alone is called:

Correct : B. Substitution effect

19. Substitution Effect is:

Correct : A. Always negative

20. If income effect works in the same direction to that of substitution effect, the good is a:

Correct : A. Normal good

21. If income effect works in the direction opposite to that of substitution effect, the good is not:

Correct : C. Normal good

22. Introspection is not the basis of :

Correct : C. Revealed Preference Hypothesis

23. The ordering of combinations on an indifference curve is:

Correct : A. Weak

24. Strong ordering is a distinguishing feature of the theory given by:

Correct : C. Samuelson

25. Father of Economics:

Correct : C. Adam Smith

26. The Wealth of Nations is the work of:

Correct : C. Adam Smith

27. Indifference Approach is related with:

Correct : B. J.R. Hicks

28. Which one of the following is an example of close substitute:

Correct : A. Tea and Coffee

29. The addition to the total revenue by the sale of an additional unit is:

Correct : D. Marginal revenue

30. Which cost is to be incurred by a firm even if output is zero:

Correct : B. Fixed cost

31. The marginal utility theory is contributed by:

Correct : A. Marshall

32. The factor earning of entrepreneur is:

Correct : D. Profit

33. The Scarcity definition of Economics is the contribution of:

Correct : C. Lionel Robbins

34. Average Revenue is equal to:

Correct : A. Price

35. Total Revenue is the maximum when Marginal Revenue is ----------

Correct : D. Zero

36. Market economy is also known as:

Correct : B. Capitalist economy

37. For complementary goods, the cross elasticity of demand:

Correct : B. Negative

38. Relation between price of a commodity and demand for another commodity is measured by:

Correct : C. Cross elasticity

39. The demand curve for Giffen’s goods:

Correct : D. Positive slope

40. When Q = f (P), the elasticity coefficient is measured by:

Correct : C. ΔQ/ΔP * P/Q

41. Income elasticity of demand for inferior goods is:

Correct : A. Negative

42. In the case of luxury goods, the income elasticity of demand will be:

Correct : C. More than unity

43. Income elasticity is positive, but less than unity in the case of:

Correct : A. Necessity

44. The change in demand is due to the change in :

Correct : B. Own price

45. Supply curve represents -------- relationship between quantity and price

Correct : A. Direct

46. A market:

Correct : B. Does not necessarily refers to a meeting place between buyer and sellers

47. The market equilibrium for a commodity is determined by:

Correct : C. Balancing of the forces of demand and supply

48. A fall in the price of the commodity holding everything else constant results in:

Correct : C. Increase in quantity demanded

49. When the price of the substitute commodity of X falls, the demand for X:

Correct : B. Falls

50. If the income elasticity of demand is greater than one, then the commodity is:

Correct : A. Necessity

51. If a positively sloped linear supply curve crosses the quantity axis, the elasticity of supply is:

Correct : A. Inelastic

52. The horizontal supply curve parallel to quantity axis represents:

Correct : C. Perfectly elastic supply

53. A fall in income of the consumer, other things being equal, causes:

Correct : A. Increase in demand

54. Which of the following causes an increase in supply:

Correct : D. All of the above

55. Cross elasticity of demand in the case of substitutes:

Correct : C. Positive

56. A movement down the given demand curve shows:

Correct : C. Extension in demand

57. Which of the following results in an increase in an increase in demand:

Correct : D. None of the above

58. Change in quantity supplied of a product can result from:

Correct : A. Changes in own price

59. An increase in supply means:

Correct : D. Rightward shift in supply curve

60. At prices above the equilibrium price:

Correct : A. Quantity supplied exceeds quantity demanded

61. An increase in market supply, demand remaining the same causes:

Correct : C. Decrease in equilibrium price and increase in equilibrium quantity

62. An increase in market demand, supply remaining the same results in:

Correct : D. Both equilibrium price and quantity rises

63. A fall in the market demand, supply remaining the same results in:

Correct : D. Both equilibrium price and quantity falls

64. Which one of the following elasticities takes the average of prices and quantities:

Correct : B. Arc elasticity of demand

65. When demand curve is rectangular hyperbola, the value of price elasticity of demand will be:

Correct : B. One