ECO401- Economics 9th july page 1

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Question No: 1 ( Marks: 1 ) - Please choose one
Aslam decides to stay at home and study for his exam rather than going out with his friends to a movie. His dilemma is an example of:


► The economic perspective.
► Marginal analysis.
► Allocative efficiency.
► Opportunity cost.

Question No: 2 ( Marks: 1 ) - Please choose one
A good for which income and quantity demanded are inversely related is known as:

► Inferior good.
► Complementary good.
► Normal good.
► None of the given options.

Question No: 3 ( Marks: 1 ) - Please choose one
An increase in supply is shown by:
► Shifting the supply curve to the left.
► Shifting the supply curve to the right.
► Upward movement along the supply curve.
► Downward movement along the supply curve.

Question No: 4 ( Marks: 1 ) - Please choose one
Price floor results in:
► All of the given options.
► Excess supply.
► Equilibrium.
► Excess demand.

Question No: 5 ( Marks: 1 ) - Please choose one
The price elasticity of demand measures the responsiveness of quantity demanded to:


► Quantity demanded.
► Quantity supplied.
► Price.
► Output.

Question No: 6 ( Marks: 1 ) - Please choose one
Assume that the total utilities for the fifth and sixth units of a good consumed are 83 and 97, respectively. The marginal utility for the sixth unit is:

► -14.
► 14.
► 83.
► 97.

Question No: 7 ( Marks: 1 ) - Please choose one
Indifference curves that are convex to the origin reflect:

► An increasing marginal rate of substitution.
► A decreasing marginal rate of substitution.
► A constant marginal rate of substitution.
► A marginal rate of substitution that first decreases, then increases.

Question No: 8 ( Marks: 1 ) - Please choose one
To find the profit maximizing level of output, a firm finds the output level where:
► Price equals marginal cost.
► Marginal revenue and average total cost.
► Price equals marginal revenue.
► None of the given options.

Question No: 9 ( Marks: 1 ) - Please choose one
As compared to existing firms, a new firm entering in monopolist market has:
► High costs.
► Low costs.
► Equal costs.
► None of the given options.

Question No: 10 ( Marks: 1 ) - Please choose one
A firm is charging a different price for each unit purchased by a consumer. This is called:
► First-degree price discrimination.
► Second-degree price discrimination.
► Third-degree price discrimination.
► None of the given options.

Question No: 11 ( Marks: 1 ) - Please choose one
McDonald's restaurant located near the high school offered a Tuesday special for high school students. If high school students showed their student ID cards, they would be given 50 cents off any special meal. This practice is an example of:

► Collusion.
► Price discrimination.
► Two-part tariff.
► Bundling.

Question No: 12 ( Marks: 1 ) - Please choose one
The price elasticity of demand for any good must be less than or equal to zero unless:

► The good is a necessity.
► The good is a luxury.
► The good is a Giffen good.
► None of the given options.

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