ECO401 Quiz 1 Current Solved Quizzes

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Q1. of 15 ( Start time: 01:24:42 PM ) Total Marks: 1

A person with a diminishing marginal utility of income:

Will be risk averse. Will be risk neutral. Will be risk loving. Cannot decide without more information.

We know that the demand for a product is elastic if:

When price rises, revenue rises. When price rises, revenue falls. When price rises, quantity demanded rises. When price falls, quantity demanded rises

The demand for chicken is downward-sloping. Suddenly the price of chicken rises from Rs. 130 per kg to Rs. 140 per kg. This will cause:

The demand curve of chicken to shift to the right. The demand curve of chicken to shift to the left. Quantity demanded of chicken to increase. Quantity demanded of chicken to decrease

the income elasticity of demand is 1/2, the good is:

A luxury. A normal good (but not a luxury). An inferior good. A Giffen good. It is expected that the sign of cross price elasticity of demand between two complementary goods would be:

Positive. Negative. Zero. Ambiguous.

we observe that the production possibilities curve becomes steeper as we move down along the curve, then:

Opportunity costs are increasing. Society's resources are limited. Society's wants are unlimited. Society's wants are unlimited.

The burden of a tax is shifted toward buyers if:

Demand is perfectly elastic. Demand is relatively more elastic than supply. Demand is relatively more inelastic than supply. Demand and supply have equal elasticities

When government sets the price of a good and that price is above the equilibrium price, the result will be:

A surplus of the good. A shortage of the good. An increase in the demand for the good. A decrease in the supply of the good.

Our economy is characterized by: Unlimited wants and needs. Unlimited material resources. No energy resources. Abundant productive labor.

Moving from left to right, the typical production possibilities curve:

Is horizontal. Has a constant positive slope. Illustrates increasing opportunity costs. Illustrates decreasing opportunity costs

When the price elasticity of demand for a good is greater than 1, we say that the demand is:

Elastic. Inelastic.

Microeconomics is the branch of economics that deals with which of the following topics?

The behavior of individual consumers Unemployment and interest rates The behavior of individual firms and investors The behavior of individual consumers and behavior of individual firms and investors

law of diminishing marginal utility states:

The supply curve slopes upward. Your utility grows at a slower and slower rate as you consume more and more units of a good. The elasticity of demand is infinite.