Economics Homework Help

Assignment C

1. Econometrics is

a. A modern name for economicsb. A specialized branch of

economics which applies the tools of statistics to the economic problemsc. A branch of economics which combines macroeconomic principles with welfare economicsd. A branch of economics which combines microeconomic principles with international tradee. A specialized branch of economics which describes neo-classical microeconomics

2. Which of the following comes under the broad definition for factors of production?

a. Technologyb. Obsolete machineryc. Innovationsd. Capital

3. Which of the following statements is true?

a. When the supply increases, both the price and the quantity will increase.b. When the supply increases, the supply curve shifts towards the leftc. A shift in the supply curve towards the right results in a fall in the price

d. A decrease in the quantity supplied results in shifting of the supply curve towards the left.e. An increase in the quantity supplied leads to a fall in the price resulting in the shifting of the supply curve towards the left.

4. Which of the following statement(s) is/are false?

a. If the demand falls, the price will fall.b. As the price rises the quantity demanded will fall.c. If demand rises, the demand schedule shifts to the left.d. Both (a) and (b) above.

5. Which of the following statements is false?

a. An increase in tax will affect the customers more than the producers if the supply schedule is inelastic.b. An increase in tax will affect the customers more than the producers if the demand schedule is inelastic.c. An increase in tax will affect the customers less than the producers if the supply schedule is inelastic.d. An increase in tax will affect the customers less than the producers if the demand schedule is inelastic.e. Both (a) and (d) above.

6. Which of the following statements is true?

a. Elasticity of demand is constant throughout the demand curve.b. Elasticity of demand increases as one goes down the demand curve.c. Elasticity of demand decreases as one goes down the demand curve.d. The slope of the demand curve equals its elasticity.

7. For complementary goods, the cross elasticity of demand will be

a. Zero.b. Infinity.c. Positive, but less than infinity.d. Negative.

8. When the income elasticity of demand for a good is negative, the good is

a. Normal good.b. Luxury good.c. Inferior good.d. Giffen good.

9. If both income and substitution-effects are strong, this region of the demand curve must be

a. Relatively price elastic.b. Relatively price inelastic.c. Unit-elastic.d. Perfectly inelastic.

10. If a good has close substitutes,

a. Its demand curve will be relatively elastic.b. Its demand curve will be relatively inelastic.c. Its demand curve could be unit-elastic.d. Either (a) or (c).

11. The demand for most products varies directly with the change in consumer income. Such products are known as

a. Normal goods.b. Prestigious goods.c. Complementary goods.d. Inferior goods.

12. Which of the following statements is true with regard to price elasticity of demand?

a. Elasticity remains constant throughout the demand curve.b. Elasticity increases with increase in quantity demanded.c. Elasticity increases as the price decreases.d. Elasticity is equal to the slope of the demand curve.

13. Which of the following goods can be considered substitutes?

a. Pen and Paper.b. Car and Petrol.c. Bread and Butter.d. Tea and Coffee.

14. Which of the following statements concerning indifference curves is true?

a. An indifference curve is the locus of points describing proportional price levels of the two goods.b. Indifference curves pre-suppose the measurement of total utility and marginal utility.c. An indifference curve is the locus of points representing various combinations of two goods about which the consumer is indifferent.d. Indifference curve pre-suppose the validity of “the law of diminishing returns”

15. If a change in all inputs leads to a proportional change in the output, it is a case of

a. Increasing returns to scaleb. Constant returns to scalec. Diminishing returns to scaled. Variable returns to scale

16. Isoquants are

a. Equal cost linesb. Equal product linesc. Equal revenue linesd. Equal total utility lines

17. When average product is highest

a. Total product is maximumb. Marginal product is maximumc. Marginal product is zerod. Marginal product is negative

18. If marginal product is negative, it means that the

a. Total product is at maximumb. Average product is at maximumc. Average product is fallingd. Average product is negative

19. Which of the following curves is called envelope curve?

a. Long run total cost curveb. Long run average total cost curvec. Long run marginal cost curved. Long run average variable cost curve

20. Which of the following costs remain constant as the output increases?

a. Marginal costb. Average variable costc. Average fixed costd. None of the above

21. In perfect competition, a firm maximizing its profits will set its output at that level where

a. Average variable cost = priceb. Marginal cost = pricec. Total cost = priced. Average fixed cost = price

22. Which of the following curves resembles supply curve under perfect competition in the short run?

a. Average cost curve above breakeven pointb. Marginal cost curve above shut down pointc. Marginal utility curved. Average utility curve

23. Which of the following is not a feature of perfect competition?

a. Large number of seller and buyersb. No one is large enough to influence the market pricec. Homogeneous productsd. A horizontal demand curve

24. In the long run, a perfectly competitive firm earns only normal profits because of

a. Product homogeneityb. Large number of seller and buyer in the industry’c. Free entry and exit of industryd. Both (b) and (c) abovee.Both (b) and (c) above

25. The horizontal demand curve for a firm is one of the characteristic features of

a. Oligopolyb. Monopolyc. Duopolyd. Perfect competition

26. A perfectly competitive firm can increase its sales by

a. Reducing the priceb. Increasing the pricec. Increasing the productiond. Increasing the expenditure of advertisement

27. Which of the following is not a source of market imperfection?

a. Technologyb. Size of the firmc. Product differentiationd. Availability of resources

28. The maximum profit condition for a monopoly firm is

a. Total cost should be minimumb. Total revenue should be maximumc. Marginal revenue is equal to marginal costd. Quantity should be maximum

29. “Four-firm concentration” refers to

a. The number of firms in an industryb. The four largest firm in four different and important industries in an economyc. The number of industries in an economy which have only four firmsd. The percent of the total industry output that is accounted for by the largest four firms

30. Market inefficiencies can come from

a. Externalitiesb. Monopoliesc. Imperfect informationd. All of the above

31. A monopolist who faces a negatively sloped demand curve operates in the region where the elasticity of demand is

a. Less than 1b. Equal to 1c. Greater than 1d. between 0 and 1

32. In which of the following market structures the entry is least difficult?

a.monopolistic competitionb. oligopolyc. duopolyd. regulated monopoly

33. Which of the follow is false in a monopolistic competition?

a. Each firm could be market leader in its product segmentb. Identical productsc. Easy entry and exitd. Price of the competitor is the benchmark price

34. The term “differentiated product” denotes

a. Different products in similar packetsb. Different productsc. Same product used in different applicationsd. Different products used by a differentiated set of people

35. Which of the following is common feature in both a monopolistic competitive market and oligopoly market?

a. Product differentiationb. Interdependence among member firmsc. Kinked demand curved. Entries blocked

36. The term “collusion” refers to

a. A situation in which government sets prices with the market leader in oligopolyb. A situation in which government jointly sets prices with the small players in an industry in the larger interest of the societyc. A situation in which all firms in an industry decide the price and outputd. A situation in which two powerful groups in an industry hand with government to rule the industry

37. Which of the following does not likely to lead to the failure collusive oligopoly?

a. Secret price cuttingb. More number of firmsc. Undifferentiated productsd. Rapidly changing technology

38. Price leadership refers to

a. Pre-emptive pricing made possible by the learning curveb. A form of price collusionc. The maintains of a monopolistic priced. Cut throat competition

39. A cartel is

a. A group firms which get together and make joint price and output decisions to maximize joint profitsb. Form of tacit collusionc. Type of oligopoly in which curve is kinkedd. Duopoly

40. A zero-sum game is one in which

a. The gain of one player equals the loss of another playerb. The gain of one player will not equal the loss of another playerc. The maximin equals the minimaxd. The equilibrium and the dominant equilibrium are the same