ECO401 Solved MCQs Mega File with References

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

price.

price. 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.

A nation's production possibilities curve is "bowed out" from the origin because:

Resources are not perfectly shiftable between productions of the two goods. Capital goods and consumer goods utilize the same production technology. Resources are scarce relative to human wants. Opportunity costs are decreasing.

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.