1. When individuals income falls (everything remain the same) his demand for a normal
good
Correct : B. falls
2. Cardinal utility analysis to consumer equilibrium was developed by
Correct : A. marshall
3. MC at any level of output is given by
Correct : 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
Correct : A. 46
5. The cost that cannot be recovered once spent
Correct : B. fixed cost
6. The saucer-type of modern Short run Average Variable Cost (SAVC) represents
Correct : B. managerial costs
7. The Long run Average Cost curve (LAC) in modern cost theory is roughly
Correct : D. rectangular hyperbola
8. Under increasing returns to scale, which of the following is the nature of the long run
average cost curve?
Correct : D. identical to short run average cost curve
9. Which of the following has a U shape?
Correct : C. average variable cost curve
10. AFC curve will always be
Correct : D. downward sloping
11. Implicit cost of a factor of production is determined by its
Correct : A. sunk cost
12. Economic cost include both
Correct : A. explicit cost and implicit cost
13. The U shape of MC curve reflects
Correct : D. law of variable proportion
14. Envelope curve is
Correct : D. none of the above
15. In long run, which factor of production is fixed?
Correct : B. capital
16. The U shape of the average total cost curve reflects
Correct : A. ldmu
17. The total fixed cost is a
Correct : A. horizontal straight line
18. When AC minimum in short run
Correct : B. ac > mc
19. The shape of TVC and TC are
Correct : A. rectangular hyperbola
20. The cost expressed not in terms of money but in terms of efforts of workers undergone
for making the commodity
Correct : C. sacrifice cost
21. The MC curve cuts the AC curve at
Correct : B. the initial point
22. The minimum point of ATC is at.............. position of the minimum point of AVC
Correct : B. left
23. If the long run cost curve shifts down wards it is an indication of
Correct : C. both of these
24. The U shape of the LAC reflects
Correct : A. law of variable proportions
25. A production possibility curve is concave to the point of origin because of
Correct : C. both of the above
26. The deductive method is also called
Correct : D. all the above
27. An Essay on the Nature and Significance of Economic Science was written by
Correct : C. lord robbins
28. Other things being equal a decrease in demand can be caused by
Correct : B. a fall in income of the consumer
29. When price of a product falls, more of it is purchased because of
Correct : D. both the substitution and income effects
30. “Utility or satisfaction is a subjective concept; therefore it could only be ranked”.
The statement supports
Correct : B. ordinal utility theorist
31. The basic doctrine of consumers surplus is based on
Correct : D. law of diminishing marginal utility
32. According to Marshall, The law of diminishing marginal utility
Correct : D. applies on all commodities except money
33. Indifference curve is always
Correct : B. convex to the oringin
34. Engel curve for giffen good is
Correct : B. negatively sloped
35. Price effect is
Correct : C. income effect + substitution effect
36. For a giffen good, when price falls
Correct : B. demand decreases
37. Inferior goods are the goods with
Correct : C. negative income effect
38. Which of the following is called gossans first law
Correct : C. law of diminishing marginal utility
39. When individuals income falls (everything remain the same) his demand for an
inferior good
Correct : A. rises
40. According to Marshall consumer surplusis:
Correct : C. total utility derived – price
41. If both the products X & Y are normal goods
Correct : B. slopes up towards right
42. Which of the following statement is TRUE with regard to total utility
Correct : B. total utility increases at a diminishing range
43. If negative income effect is less than positive substitution effect : the product will be