F.Y B.COM
SEMESTER - 2
MID SEMESTER EXAMINATION
MICRO ECONOMICS
(ME)
MCQS - 2019
(1) Which of these is also called production indifference curve?
(A) Iso-cost
(B) Iso-quant
(C) Total Product curve
(D) Marginal Product curve
(2) Which of these is the differentiating element between Marginal Utility Analysis & Indifference Curve Analysis?
(A) Diminishing satisfaction from a good as more
(B) Rationality assumption of it is consumed
(C) Cardinal versus Ordinal measurability of utility
(D) a and b
(3) In the acronym MRTS, T stands for _______.
(A) Total
(B) Tangent
(C) Technical
(D) Technology
(4) Rationality of maximizing satisfaction applies to _______.
(A) Producer
(B) Consumer
(C) Firm
(D) worker
(5) Which of these is not a basic assumption of economics?
(A) Nature affects the ability of different regions to produce various goods
(B) Consumer's income and prices of goods remain constant while we examine her consumption behavior
(C) Economic units/agents are consistent in their choices
(D) A worker cannot be expected to work for 24 hours a day to maximize output
(6) At the point of producer's equilibrium, which of these is true?
(A) MRTSxy = ratio of factor prices
(B) MRTSxy = prices of the factors of production
(C) MRTSxy = marginal rate of substitution of two consumer goods
(D) MRTSxy = ratio of product prices
(7) Which of these implies Transitivity assumption?
(A) If a consumer prefers good A to B, and good B to C, then he will prefer good C to
(B) If a consumer prefers good A to B, and good B to C, then he will prefer good B to A
(C) If a consumer prefers good A to B, and good B to C, then he will prefer good A to
(D) If a consumer prefers good A to B, and good B to C, then he will be indifferent between good B and C
(8) Rational stage of production under the Law of Variable Proportions is one at which
(A) Producer operates with least inputs
(B) Producer minimizes cost
(C) Producer maximizes inputs
(D) Producer operates in the second stage of production
(9) Expansion path shows________.
(A) Intersection points between successive iso-costs and iso-quants
(B) Tangency points between successive iso-costs & iso-quants
(C) Short run increases in output
(D) both b and c
(10) In stage III of production under the Law of Variable Proportions, the Marginal Product is
(A) Negative
(B) Equal to the Average Product
(C) Greater than the Average Product
(D) Constant
(11) Which of these statements are true in the case of the Law of Variable Proportions?
i. All factors of production are variable
ii. Factor ratios are variable
iii. At least one factor is variable
iv. At least one factor is fixed
(A) ii-iii
(B) ii-iii-iv
(C) iii-iv
(D) i-ii-iii-iv
(12) With reference to the Law of Variable Proportions, the state of technology is assumed to be
(A) Zero
(B) Constant
(C) Improving
(D) Deteriorating
(13) The Law of Equi-Marginal Utility states that the consumer will distribute his consumption in such a way that the MU of the last rupee spent on each good is
(A) Constant
(B) Smaller
(C) Equal
(D) Greater
(14) Under marginal utility analysis, if a commodity is free, the consumer will be in equilibrium when
(A) Her marginal utility is zero
(B) Her total utility is maximum
(C) Her marginal utility is zero
(D) Both b and c
(15) Which of the following is not implied by the term production?
(A) Manufacturing, trading and service
(B) Destruction of utility businesses
(C) Creation of form, time and place utility
(D) b and c
(16) In stage Il of production under the Law of Variable Proportions, the Marginal Product is
(A) Negative
(B) Equal to the Average Product
(C) Greater than the Average Product
(D) Smaller than the Average Product
(17) A downward sloping indifference curve implies that, as the quantity of one good increases, that of the other good should
(A) Increase
(B) Decrease
(C) Remain constant
(D) Rise
(18) In stage 1 of production under the Law of Variable Proportions, the Marginal Product is
(A) Smaller than the Average Product
(B) Negative
(C) Greater than the Average Product
(D) Equal to the Average Product
(19) If A, B, C and D are points on iso-quant IQ1, and if point A represents 100 units of output produced, then how much output can be produced at point B?
(A) 300
(B) 200
(C) 400
(D) none
(20) Returns to scale can be depicted by
(A) Difference in distance between successive iso-costs
(B) Difference in convexity of iso-quants
(C) Difference in the distance between successive iso-quants
(D) Single iso-quant
(21) The slope of a budget line would change if _______.
(A) Prices of the two goods remain constant
(B) Prices of the two goods change by the same proportion
(C) Budget of the consumer increases
(D) Prices of the two goods change by different proportions
(22) Which of these is a sufficient condition for consumer's eqilibrium under indifference curve analysis?
(A) Indifference curve should be convex to the origin at the point of equilibrium.
(B) Indifference curve should be concave to the origin at the point of equilibrium.
(C) Indifference curve should be flatter at the point of equilibrium.
(D) Indifference curve should be steeper at the point of equilibrium.
(23) If two goods are perfect complements of each other, their indifference curve will be _______.
(A) Horizontal straight line
(B) Vertical straight line
(C) L - Shaped
(D) Rectangular hyperbola
(24) Which of these does not indicate indirect consumption?
(A) Raw material used in production of final product
(B) Ice cream consumed by a consumer
(C) Use of transport service in delivering goods
(D) Cotton used in making cloth to the consumer
(25) _____ is the reason for decline in the marginal rate of substitution of one good for another.
(A) Perfect complementary
(B) Imperfect substitution
(C) Perfect substitution
(D) All of the above
(26) The slope of a line drawn from the origin through the expansion path measures _______.
(A) Ratio of factor prices
(B) Quantity of output
(C) Quantity of input-output
(D) Ratio of factors of production
(27) In the case of consumer equilibrium under law of EMU, the ratios of MU to Price of the respective goods should be equal to _______.
(A) Marginal utility of money
(B) Scale of preference
(C) Satisfaction
(D) Money Income
(28) The downward sloping property of isoquant follows from a valid assumption that the marginal physical product of factors is _______.
(A) Positive
(B) Zero
(C) Constant
(D) Negative
(29) The budget line can be algebraically written as
(A) PxQx - Py.Qy = M
(B) Px/Qx + Py/Qy = M
(C) Px.Qx + Py.QY = M
(D) Px.Qxx Py.Qy = M
(30) Which of these implies a criticism of the concept of Cardinal Utility?
(A) Utility cannot be assigned a number
(B) Marginal utility of money cannot remain constant
(C) Utlitites of goods cannot be independent
(D) All of the above
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