Eco401 Quiz

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Quiz Start Time: 10:33 PM

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Question # 1 of 15 ( Start time: 10:33:20PM )

Total Marks: 1

A market is said to be in equilibrium when:

Select correct option:

Supply equals Price.

There is downward pressure on price.

e equals the amount producers wish to sell at that pric

All buyers are able to find sellers willing to sell to them

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Total Marks: 1

In pure capitalism, freedom of enterprise means that:

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Consumers are free to buy goods and services that t

Resources are distributed freely to businesses that w

Government is free to direct the actions of businesse



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Total Marks: 1

Demand is elastic when the elasticity of demand is:


Greater than 0.

Greater than 1.

Less than 1.

Less than 0.



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You observe that the price of houses and the number of houses purchased both rise over thecourse of the year. You conclude that:


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The demand curve for houses must be upward-slopin

The supply of houses has increased.

Housing construction costs must be decreasing.



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The law of diminishing marginal utility indicates that the demand curve is:


Vertical.

U shaped.

Upward sloping.

Downward sloping.



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If the demand curve for a good is downward sloping, then the good:


Must be normal.

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Must be inferior.

Must be Giffen.

Can be normal or inferior.



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Total Marks: 1

We know that the demand for a product is elastic if:


When price rises, revenue rises.

When price rises, revenue falls.

When price rises, quantity demanded rises.

When price falls, quantity demanded rises.



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The extra value that consumers receive above what they pay for that good is called:


Producer surplus.

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Utility.

Marginal utility.

Consumer surplus.



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Total Marks: 1

Which of the following is TRUE about the production function?


It relates inputs with output.

It generates a curve that is upward sloping.

It shows diminishing marginal product of an input, sin

All of the given options are true.



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A schedule which shows the various amounts of a product consumers are willing and able topurchase at each price in a series of possible prices during a specified period of time is called:


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Demand Scedule.

Quantity supplied Scedule.

Quantity demanded Scedule.



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When an industry's raw material costs increase, other things remaining the same:


The supply curve shifts to the left.

The supply curve shifts to the right.

Output increases regardless of the market price and

Output decreases and the market price also decreas



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The opportunity cost of an action:


Will be the same for everyone.

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Is the value of the next best alternative.

Measures the undesirable aspects of that action.

Is the average amount of unhappiness experienced



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Suppose we find that the cross-price elasticity of demand for two products is a negative number.We know that:


The two goods are normal goods.

The two goods are inferior goods.

The two goods are substitutes.

The two goods are complements.



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The total utility curve for a risk neutral person will be:


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Straight line.

Convex.

Concave.

None of the given options.



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A person with a diminishing marginal utility of income:


Will be risk averse.

Will be risk neutral.

Will be risk loving.

Cannot decide without more information.




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Total Marks: 1

Average physical product is equal to:


TPPF

TPPF/QF

QF / TPPF

TPPF * QF




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If the equilibrium price of bread is Rs. 3 and the government imposes Rs. 2 price ceiling on theprice of bread then:


More bread will be produced to meet the increased d

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There will be a shortage of bread.

The demand for bread will decrease because supplier

A surplus of bread will emerge.




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Total Marks: 1

If the cost of computer components falls, then


The demand curve for computers shifts to the right.

The demand curve for computers shifts to the left.

The supply curve for computers shifts to the right.

The supply curve for computers shifts to the left.




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The price elasticity of supply shows us:


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How steep the supply curve is.

How fast supply responds to price.

How much supply shifts when income changes.

How much quantity supplied responds to price chang




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The extra value that consumers receive above what they pay for that good is called:


Producer surplus.

Utility.

Marginal utility.

Consumer surplus.


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Question # 6 of 15 ( Start time: 10:56:28PM ) Total Marks: 1

Consider two commodities X and Y. If the cross-elasticity of demand is positive, it means the goodsare:


Independent.

Complements.

Substitutes.

Inferior.




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Which of the following is true about the point on a nation's production-possibilities curve?


It shows an undesirable combination of goods and se

It shows the combinations of production that are una

It shows the level of production that will cause both

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It shows that resources are fully employed in produc




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The short run, as economists use the phrase, is characterised by:


All inputs being variable.

At least one fixed factor of production and firms neit

No variable inputs - that is, all of the factors of produ

A period where the law of diminishing returns does n




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Which of the following defines the opportunity cost?


It is measured only in rupees.

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It is the cost to society of producing the goods.

It is the difficulty associated with using one good in p

It is the cost of next best alternative forgone.




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The study of economics basically focuses on:


For whomresources are allocated to increase efficien

How society spends the income of individuals.

How scarce resources are allocated to fulfill society's

What scarce resources are used to produce goods a




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At any given point on an indifference curve, the the slope is equal to:


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Unity.

The marginal rate of substitution.

The consumers marginal utility.

None of the given options.




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Demand is said to be ---------------- when the elasticity of demand is less than 1.


Increasing

Decreasing

Elastic

Inelastic




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Total Marks: 1

We know that the demand for a good or service is inelastic if:


When price rises, quantity demanded rises.

When price rises, quantity demanded falls.

When price rises, total revenue rises.

When price rises, total revenue falls.




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Total Marks: 1

The shape of production possibilities curve is:


Concave.

Convex.

Linear.

Positive.


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Question # 15 of 15 ( Start time: 11:03:32PM ) Total Marks: 1

An individual with a constant marginal utility of income will be:


Risk averse.

Risk neutral.

Risk loving.

Insufficient information for a decision.






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