F.Y B.COM
SEMESTER - 2
MID SEMESTER EXAMINATION
MICRO ECONOMICS
MCQS - 2017
(1) Consumption is a
(A) Wealth acquiring activity
(B) Wealth using activity
(C) Wealth saving activity
(D) B and C
(2) In which of the following conditions does the Law of Diminishing Marginal Utility work?
(A) When units are un-identical
(B) Time lag in consumption
(C) Taste and preference keep changing
(D) Continuous consumption
(3) A downward sloping MU curve demonstrates
(A) the principle of constant marginal utility
(B) the principle of equi-marginal utility
(C) dissatisfaction of the consumer
(D) decreasing intensity of desire for the product
(4) Cardinal Utility Approach to the consumer behaviour analysis has been developed by
(A) Adam Smith
(B) Alfred Marshall
(C) H.R. Hicks
(D) J.B. Say
(5) Which of the following is correct?
(A) If MU > 0, TU will increase
(B) If MU = 0, TU will be zoro
(C) If MU < 0, TU will increase
(D) If MU < 0, TU will negative
(6) Marginal utility of a commodity Decreases because _______
(A) Maximum satisfaction is reached
(B) Demand decreases
(C) Intensity of desire decreases
(D) Resources are limited
(7) Consumer's surplus is equal to
(A) Total utility - Total expenditure on the good
(B) Total utility × Total expenditure on the good
(C) Total utility + Total expenditure on the good
(D) Total utility / Total expenditure on the good
(8) Which one of the following is not a property of indifference curve?
(A) Indifference curves are downward sloping from right to left
(B) Indifference curves never intersect each othe
(C) Indifference curves are convex to the origin
(D) Higher the indifference curve higher the level satisfaction
(9) The Cardinal approach to utility assumes marginal utility of money to be
(A) Zero
(B) Constant
(C) Negative
(D) Increasing
(10) The slope of indifference curve indicates
(A) Price ration of two commodities
(B) Factor substitution
(C) MRS between the two commodities
(D) Level of Income
(11) Consumer surplus is the area:
(A) Below the demand curve but above the market price
(B) Above the demand curve
(C) Below the demand curve but below the market price
(D) Below the demand curve
(12) Which of these is an incorrect condition for Consumer's equilibrium under marginal utility analysis?
(A) MU > P
(B) MU = P
(C) MU = P = 0
(D)MUx/Px = MUy/Py = MUm
(13) The capacity of a consumer to buy goods can be expressed by the
(A) Price of the goods
(B) Budget line
(C) Indifference curve
(D) Income
(14) Identify the assumption which indicates that the consumer prefers the combination of goods that has more units of the two goods rather than less.
(A) Transitivity assumption
(B) Non - satiety assumption
(C) Consistency assumption
(D) Assumption of ordinal utility
(15) From the given table calculate surplus:
|
Unit |
Price - X |
MUx |
|
1 |
5 |
20 |
|
2 |
5 |
14 |
|
3 |
5 |
9 |
|
4 |
5 |
5 |
|
5 |
5 |
3 |
|
6 |
5 |
1 |
|
7 |
5 |
0 |
(A) 28
(B) 48
(C) 17
(D) 20
(16) Which are the reasons responsible for increasing returns to scale
(A) Underutilization of fixed factor
(B) Specialization and division of labour
(C) Indivisibility of factors
(D) All of the above
(17) When a firm moves from on point on aniso-quant to another, which of the following will not happen?
(A) A change in the ratio in which the inputs are combined.
(B) A change in the marginal products of the inputs.
(C) A change in the rate of technical substitution.
(D) A change in the level of output
(18) When the two inputs are perfect complements, the MRTS between two inputs will be
(A) One
(B) Zero
(C) Infinity
(D) Increasing
(19) Which of the following is not an assumption of the Law of variable proportions?
(A) State of technology remains constant
(B) Long run
(C) Some factor inputs are fixed
(D) Homogeneity of factor units
(20) _______ Is the locus of points of tangency between successive isoquants and isocost lines.
(A) Expansion path
(B) Price line
(C) Production indifference curve
(D) Both A and B
(21) Production function shows the relation between
(A) factor inputs and output
(B) production and price
(C) factor inputs and oost
(D) production and sales revenue
(22) Which of the following is correct in the case of law of variable proportions?
(A) All factors are variable
(B) All factors are used in fixed proportions
(C) All factors ro fixed
(D) At least one factor is fixed
(23) The slope of iso-cost line shows
(A) Funds available to the firm
(B) Ratio of the factor prices
(C) Equal quantity output
(D) Ratio of product prices
(24) Under the law of variable proportions, stage l is known as
(A) Stage of diminishing returns
(B) Stage of constant returns
(C) Stage of negative returns
(D) Stage of increasing returns
(25) MRTSLK is
the slope of
(A) Demand Curve
(B) Iso-Cost Line
(C) Indifference Curve
(D) Iso - quant
(26) Under Decreasing Returns to Scale, in order to double the level of output, the factor inputs would have to be
(A) Less than doubled
(B) doubled
(C) More than doubled
(D) Equal to target output
(27) Which of the folloying is/are Economies of Scale
(A) Bulk purchase of raw materials
(B) Vertical integration
(C) Better technology
(D) All of the above
(28) In which stage of short-run input-output relation would a rational producer operate?
(A) Stage l
(B) Stage II
(C) Stage lII
(D) Stage IV
(29) Identify where exactly would a rational producer operate?
(A) At the peak point of the total product curve
(B) At the peak point of the marginal product curve
(C) At the end of the second stage if the variable factor is free of cost
(D) At the start of the second stage if the variable factor is free of cost
(30) Optimum combination of fixed and variable factors is indicated by
(A) Peak point of total product curve
(B) Peak point of marginal product curve
(C) Peak point of average product curve
(D) All of the above
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