NTA (UGC)-NET: Economics MCQs (Practice_Test 10 of 122)

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1. A locus of constant utility is called the

1. expansion path

2. utility function

3. indifference curve

4. demand function

2. Match list with List II and select the correct answer

 List-I List-II Expansion DemandBonstraction in DemandIncrease in DemandDecrease in Demand Movement on the same demand curve from left to rightMovement on the same demand curve from right to leftShift in the demand curve to the rightShift in the demand curve to the left
• A
• B
• C
• D
• 1
• 2
• 3
• 4
• 1
• 2
• 4
• 3
• 3
• 4
• 1
• 2
• 3
• 4
• 2
• 1
3. Total product is exhausted when actors are paid according to their respective marginal products provided that the production function is homogeneous of degree (n), where

1. n = 1

2. n > 2

3. n <2

4. n = 1

4. A competitive farmer, with a given family farm and equipment and no alternative employment opportunities either for himself or for his family members, would use the family labour on his farm up to a level till the marginal physical productivity of labout reaches

1. maximum

2. zero

3. a level where it is equal to average productivity of labour

4. negative values

5. Consider the production function Y = ALβ Ka; a, β > 0 (Symbols have their usual meaning). Match List I with List II and select the correct answer:

 List-I List-II Output elasticity with respect to LDecreasing returns to scaleOutput elasticity with respect to KIncreasing returns to scale Equation is a + β >1Equation is aEquation is βEquation is a + β <1
• A
• B
• C
• D
• 2
• 3
• 1
• 4
• 2
• 3
• 4
• 1
• 3
• 4
• 1
• 2
• 3
• 4
• 2
• 1
6. Which one of the following characteristics the equilibrium point of a firm?

1. Tangency between the iso-quant and the iso-cost line

2. Equality between the MRTSLK and PL/PK

3. Equality between the MPK/and MPL/PL

4. All of the above

7. In the leadership model of duopoly, if one is a (quantity) leader and the other is a (quantity) follower equilibrium takes place

1. at any point on the reaction curve of the leader

2. at a point on the reaction curve of the follower

3. at the point of intersection of the two reaction curves

4. nowhere.

8. The break-even point for a perfectly competitive firm occurs at:

1. the minimum point of the AVC curve

2. the minimum point of the AC curve

3. the minimum point of the MC curve

4. the minimum point of the AFC curve

9. When labour supply curve bends backward

1. income becomes and inferior commodity

2. work becomes an inferior commodity

3. leisure becomes an inferior commodity

4. people become lazy at higher wage level

10. Liquidity preference refers to

1. the extent to which investors prefer to keep their assets in money

2. RBI's shareholdings in other financial institutions

3. community's preference for gold

4. community's effective demand for capital goods

11. Match List I with List II and select the correct answer:

 List-I List-II Time preferenceUnisurable further uncertaintyExploitation of factorsQuasi-rent RobinsionfisherMarshallKnight
• A
• B
• C
• D
• 2
• 4
• 3
• 1
• 2
• 4
• 1
• 3
• 1
• 2
• 3
• 4
• 1
• 2
• 4
• 3
12. In which one of the following conditions, price discrimination under monopoly would not be possible?

1. When consumers have certain preference and prejudices

2. When a monopolist faces a perfectly elastic demand curve for his product

3. when a monopolist can render the same service for different uses of the service

4. When consumers are separated by distance or tariffbarriers

13. Consider the following statement: Intersection of the I-S and L-M curves corresponds to

1. Equilibrium in the real sector.

2. equilibrium in the monetary sector.

3. Liquidity trap necessarily.

4. Walrasian general equilibrium.

14. Consider the following statements: ‘Market failure’ may arise as a result of

1. monopolistic competition.

2. perfect competition

3. economies of scale

Of the statements

1. 1 and 2 are correct

2. 2 and 3 are correct

3. 1 and 3 are correct

4. 1, 2 and 3 are correct

15. It is not necessarily works for a society if a large number of optimality conditions are violated than if only a few are violated. This consideration relates to

1. rational consumer

2. rational producer

3. the theory of second beat

4. Social good