# MPSET: Economics MCQs (Practice-Test 115 of 122)

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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

Which one of the following statements is NOT correct?

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

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

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

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

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

N/A

N/A

N/A

N/A

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

0.25

0.75

1.00

0.50

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

5

6

10

12

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

equal to the wage rate

equal to the average product of capitals

equal to its marginal product

greater than its marginal product

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

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

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

the marginal products of the inputs equal the respectivly factor prices

MRTS is constant but not necessarily equal to 1

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

maximum

2 minimum

constant

rising

Which of the above statements are correct?

1 and 4

2 and 4

1 and 3

2 and 3

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

marginal products of x1 and x2 are equal

MRTSx1 × 2/MRTS x2 × 1 = r1/r2

MPx1/MPx2 = r1/r2

MPx2/MPx1 = r1/r2

Consider the following groups of items:

Factory buildings

Plant and machinery

Stocks of raw materials

the wage bill

Which of these are known as work capital?

1 and 2

3 and 4

1, 2 and 3

2, 3 and 4

Which one of the following statements is correct?

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

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

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

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

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

MR = Mc

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

TR = TC

Which of the above statements are correct?

1 and 2

1 and 3

2 and 3

1, 2 and 3

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

average variable cost curve

marginal cost curve

marginal cost curve above average variable cost curve

average total cost curve

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

falling

rising

minimum

zero

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

perfect substitutes for each other

perfect complementary to each other

independent of each other

not predicable