ECO401 Midterm Questions

A total of 27 Qs. were MCQs and 3 were of 3 marks and 2 of 5 marks.

1. Explain 2nd and 3rd degree PD with example.(5 Mks)
2. which of these are VC and FC.(5)
3. Concentration and its use.(30
4. LRTAC and draw graphs in economies and diseco of scale.(3)
5. Find elasticity of demand.(3)

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28 mcqs 3num ka question difference between monopolists and perfectly competition 3number ka product production 5number ka diagram show kya gya tha monopolist ka diagram the us ki explation karni thi 5number ka capital 250 250 250 250 250 250 labor 10 20 30 40 50 60 tap=20 33.7 43.8 87.8 100 111.7 mpp nikalna tha

FlowerEco401 current paper mid term fall 2011

Q1. Figure (1 marks)

In figure given above, the marginal utility of income is:

1. Increasing as income increases.
2. Constant for all levels of income.
3. Diminishes as income increases.
4. None of the given options.

Q2. A consultant for Mattel (the producer of Barbie) reports that their long run average cost curve is decreasing. In other words, he is saying that: (1 marks)

1. The firm has increasing returns to scale and the law of diminishing marginal productivity does not apply to this firm.
2. The firm has decreasing returns to scale and the law of diminishing marginal productivity does not apply to this firm.
3. The firm has increasing returns to scale but the law of diminishing marginal productivity may still apply to this firm.
4. The firm has decreasing returns to scale but nonetheless the law of diminishing marginal productivity may still apply to this firm.

Q3. A tennis pro charges $15 per hour for tennis lessons for children and $30 per hour for tennis lessons for adults. The tennis pro is practicing: (1 marks)

1. First-degree price discrimination.
2. Second-degree price discrimination.
3. Third-degree price discrimination.
4. All of the given options.

Q4. Marginal profit is equal to: (1 marks)

1. Marginal revenue minus marginal cost.
2. Marginal revenue plus marginal cost.
3. Marginal cost minus marginal revenue.
4. Marginal revenue times marginal cost.

Q5. If current output is less than the profit-maximizing output then which of the following must be TRUE? (1 marks)

1. Total revenue is less than total cost.
2. Average revenue is less than average cost.
3. Marginal revenue is less than marginal cost.
4. Marginal revenue is greater than marginal cost.

Q6. The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the average total cost? (1 marks)

1. 5Q.
2. 5.
3. 5 + (200/Q).
4. None of the given options.

Q7. (1 marks)

1. Goods are normal or inferior.
2. Two goods are substitutes or complements.
3. Demand is elastic or inelastic.
4. Supply is steeper than demand or vice versa.

Q8. Because of the relationship between a perfectly competitive firm's demand curve and its marginal revenue curve, the profit maximization condition for the firm can be written as: (1 marks)

1. P = MR.
2. P = AVC.
3. AR = MR.

Q9. Third-degree price discrimination involves: (1 marks)

1. Charging each consumer the same two part tariff.
2. Charging lower prices the greater the quantity purchased.
3. The use of increasing block rate pricing.
4. Charging different prices to different groups based upon differences

in elasticity of demand.

Q10. In order for a taxicab to be operated in New York City, it must have a medallion on its hood. Medallions are expensive but can be resold and are therefore an example of: (1 marks)

1. A fixed cost.
2. A variable cost.
3. An implicit cost.
4. An opportunity cost.

Q11. Government authorities have managed to reduce the unemployment rate from 8% to 4% in a hypothetical economy. As a result: (1 marks)

1. The economy's production possibilities curve will shift outward.
2. The economy's production possibilities curve will become steeper.
3. The economy will move downward along its production possibilities curve.
4. The economy will move from a point inside to a point closer to its production possibilities curve.

Q12. The "perfect information" assumption of perfect competition includes all of the following EXCEPT: (1 marks)

1. Consumers know their preferences.
2. Consumers know their income levels.
3. Consumers know the prices available.
4. Consumers can anticipate price changes.

Q13. (1 marks)

1. Vertical.
2. U-shaped.
3. Upward-sloping.
4. Downward-sloping.

Q14. (1 marks)

1. Goods are normal or inferior.
2. Two goods are substitutes or complements.
3. Demand is elastic or inelastic.
4. Supply is steeper than demand or vice versa.

Q15. Which of the following will be TRUE if demand is inelastic? (1 marks)

1. The coefficient of elasticity is greater than one.
2. The percentage change in quantity demanded is same as the percentage change in the price.
3. An increase in price will increase total revenue.
4. None of the given options.