Thursday, July 2, 2009

ECO401- Economics (Session - 2) page 2

Kindly do make vuhelps your default page and keep viewing it to get up to date information about current fresh exams. Also follow the blog. Send your papers to make them here uptodate at vuhelps@gmail.com or feel free to call at 03455242488
Question No: 11 ( Marks: 1 ) - Please choose one
Diminishing marginal returns implies:

► Decreasing marginal costs.
► Increasing marginal costs.
► Decreasing average variable costs.
► Decreasing average fixed costs.

Question No: 12 ( Marks: 1 ) - Please choose one
A graph showing all the combinations of capital and labour available for a given total cost is the:
► Budget constraint.
► Expenditure set.
► Isoquant.
► Isocost.

Question No: 13 ( Marks: 1 ) - Please choose one
When an isocost line is just tangent to an isoquant, we know that:
► Output is being produced at minimum cost.
► Output is not being produced at minimum cost.
► The two products are being produced at the medium input cost to the firm.
► The two products are being produced at the highest input cost to the firm.

Question No: 14 ( Marks: 1 ) - Please choose one
In order for a taxicab to be operated in New York City, it must have a medallion on its hood. Medallions are expensive but can be resold and are therefore an example of:
► A fixed cost.
► A variable cost.
► An implicit cost.
► An opportunity cost.

Question No: 15 ( Marks: 1 ) - Please choose one
The good produced by a monopoly:

► Has perfect substitutes.
► Has no substitutes at all.
► Has no close substitutes.
► Can be easily duplicated.

Question No: 16 ( Marks: 1 ) - Please choose one
Welfare economics is the branch of economics which deals with:

► Positive issues.
► Normative issues.
► Micro issues.
► Macro issues.

Question No: 17 ( Marks: 1 ) - Please choose one
The oligopoly model which predicts that oligopoly prices will tend to be very rigid is the:

► Cournot model.
► Cobweb model.
► Dominant firm model.
► Kinked demand model.

Question No: 18 ( Marks: 1 ) - Please choose one
The kinked demand curve model is based on which of the following assumptions?
► Each firm considers its rival's output to be fixed.
► Each firm considers its rival's price to be fixed.
► Each firm believes rivals will match all price changes.
► None of the given options.

Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following is NOT conducive to the successful operation of a cartel?

► Market demand for the good is relatively inelastic.
► The cartel supplies all of the world's output of the good.
► Cartel members have substantial cost advantages over non-member producers.
► The supply of non-cartel members is very price elastic.

Question No: 20 ( Marks: 1 ) - Please choose one
Cartels are:
► Organizations of independent firms, producing similar products, that work together to raise prices and restrict output.
► Organizations of interdependent firms, producing similar products, that work together to raise prices and restrict output.
► Organizations of independent firms, producing different products, that work together to raise prices and restrict output.
► Considered as part of monopolistic competition.

Question No: 21 ( Marks: 1 ) - Please choose one
The marginal revenue product is:

► Upward sloping due to the law of demand.
► Upward sloping due to the law of marginal utility.
► Downward sloping due to the law of diminishing returns.
► Downward sloping due to the law of supply.

Question No: 22 ( Marks: 1 ) - Please choose one
A reason why some economists basically ignore the short run is because they believe that the economy:

► Has self-correcting mechanisms.
► Can only be graphed with a horizontal curve.
► Never needs correction.
► None of the given options.

Question No: 23 ( Marks: 1 ) - Please choose one
The long run aggregate supply curve will shift to the right if:

► The price level increases.
► Factors of production (such as labor and capital) increase.
► Expenditures (such as consumption and net exports) increase.
► The prices of inputs used to produce goods and services (such as wages and the price of oil) decrease.

Question No: 24 ( Marks: 1 ) - Please choose one
A primary implication of Keynesian economics is:

► The best government is the least government.
► Flexible wages and prices ensure full employment.
► Monetary policy is far superior to fiscal policy.
► Business-cycle instability is best corrected through government policies.

Question No: 25 ( Marks: 1 ) - Please choose one
The economic analysis most closely related to Say's Law is:

► Short-run aggregate market.
► Production possibilities.
► Imperfect competition.
► Circular flow.

Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is NOT a reason of downward slope of aggregate demand curve?


► The exchange-rate effect.
► The wealth effect.
► The classical dichotomy / monetary neutrality effects.
► The interest-rate effect.

Question No: 27 ( Marks: 1 ) - Please choose one
The upward-sloping aggregate supply curve indicates that:

► As firms increase their level of output, the cost of producing an extra unit increases.
► An increase in aggregate demand causes little, if any increase in real output the economy is operating in the long run.
► Any increase in aggregate demand causes the output of producers to fall because the general price level rises.
► None of the given options.

Regards Vuhelps

No comments:

Advertisement