Competitive Exams: Economics MCQs (Practice-Test 115 of 122)

  1. Which one of the following pairs is NOT correctly matched?

      • Revealed Preference theory
      • Samuelson
      • Indifference curve Analysis
      • Hicks
      • Cardinal Utility
      • Joan Robinson
      • Input-output Analysis
      • Leontief
  2. Which one of the following statements is NOT correct?

    1. Different points on an indifference curve stand for different combinations of two goods.

    2. different points on the consumption possibility line stand for a different combination of two goods.

    3. all points on an indifference curve stand for the same level of satisfaction.

    4. All points on the consumption possibility line stand for the same level of satisfaction.

  3. Given a consumers'utility function U = x1 × 2 and his budget constraint M = P1 × 1 + P2 × 2, at equilibrium, the demand function for x1 will be

    1. N/A

    2. N/A

    3. N/A

    4. N/A

  4. if the demand curve is a rectangular hyperbola, then numerical elasticity of demand is equal to

    1. 0.25

    2. 0.75

    3. 1.00

    4. 0.50

  5. Consider the following data: Price per kg (Rs.) = Demand for wheat (kg) 12 5 10? When the price of wheat is Rs. 10 per kg and the demand is unit-elastic, the demand for wheat in kg would be

    1. 5

    2. 6

    3. 10

    4. 12

  6. the elasticity of output with respect to labour is equal to one, when average product of labour is

    1. equal to the wage rate

    2. equal to the average product of capitals

    3. equal to its marginal product

    4. greater than its marginal product

  7. if product isoquants are drawn as straight lines, it implies that

    1. marginal rate of technical substitution (MRTS) is equal to MRTS equals the ratio of factor prices

    2. the marginal products of the inputs equal the respect factor prices.

    3. the marginal products of the inputs equal the respectivly factor prices

    4. MRTS is constant but not necessarily equal to 1

  8. consider the following statements: At the point of equality between average product and marginal product, average product is

    1. maximum

    2. 2 minimum

    3. constant

    4. rising

    Which of the above statements are correct?

    1. 1 and 4

    2. 2 and 4

    3. 1 and 3

    4. 2 and 3

  9. Given a production function with two input x1 and x2 and their prices r1 and r2, the optimal combination of inputs is one for which

    1. marginal products of x1 and x2 are equal

    2. MRTSx1 × 2/MRTS x2 × 1 = r1/r2

    3. MPx1/MPx2 = r1/r2

    4. MPx2/MPx1 = r1/r2

  10. Consider the following groups of items:

    1. Factory buildings

    2. Plant and machinery

    3. Stocks of raw materials

    4. the wage bill

    Which of these are known as work capital?

    1. 1 and 2

    2. 3 and 4

    3. 1, 2 and 3

    4. 2, 3 and 4

  11. Which one of the following statements is correct?

    1. an employer will continue to hire units of a variable factor until marginal revenue product (MRP) becomes equal to money wages

    2. an employer hires a variable factor input up to the point where diminishing returns begin to operate.

    3. An employer hires a variable factor input until its marginal revenue product (MRP) becomes aero.

    4. Variable factors are employed until their MRPs become equal to one another

  12. Consider the following statements: For a firm to be in equilibrium

    1. MR = Mc

    2. MC curve must cut MR cure from below at the point of equilibrium

    3. TR = TC

    Which of the above statements are correct?

    1. 1 and 2

    2. 1 and 3

    3. 2 and 3

    4. 1, 2 and 3

  13. the short-run supply curve of a firm under perfect competition is the same as

    1. average variable cost curve

    2. marginal cost curve

    3. marginal cost curve above average variable cost curve

    4. average total cost curve

  14. when marginal cost is less than average cost, average cost is

    1. falling

    2. rising

    3. minimum

    4. zero

  15. In the two-inputs case, if the product isoquants are l-shaped, the inputs are

    1. perfect substitutes for each other

    2. perfect complementary to each other

    3. independent of each other

    4. not predicable