ECO402 Final Term Past Paper 2006

FINALTERM EXAMINATION

FALL 2006 ECO402 - MICROECONOMICS (Session - 3 ) Marks: 60 Time: 120min

Student Name:

Center Name/Code:

Exam Date: Thursday, February 01, 2007

INSTRUCTIONS:

•  All questions are compulsory.
•  This exam consists of 15 Multiple Choice Questions (MCQ’s) carrying 1 mark each,5 fill in the blanks carrying 1 mark each,5 true false carrying 1 mark each, 5 Short questions carrying 3 marks each and 2 Descriptive questions carrying 10 marks each.
•  For each Multiple Choice Question, read the options available and select which you consider is correct option.
•  You are required to show all the working of short questions as well as Descriptive question.
•  This examination is closed book, closed notes and closed neighbors.
•  You may wish to pace yourself with your own watch, but the Supervisor will be the official timekeeper of the test.
•  Failure to comply with the Supervisor’s directions will result in your test being cancelled. Please comply with supervisor’s directions to avoid any unpleasant event.

Question Question Marks Question Marks Question Marks

Q1. Compared to the equilibrium price and quantity sold in a competitive market, a monopolist will charge a ______________ price and sell a ______________ quantity. (1 marks)

Higher; larger

Lower; larger

Higher; smaller

All of the given options

Q2. The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the marginal cost? (1 marks)

5Q

5 + (200/Q)

Q3. Marginal profit is equal to: (1 marks)

Marginal revenue minus marginal cost.

Marginal revenue plus marginal cost.

Marginal cost minus marginal revenue.

Marginal revenue times marginal cost.

Q4. An improvement in technology would result in: (1 marks)

Upward shifts of MC and reductions in output.

Upward shifts of MC and increases in output.

Downward shifts of MC and reductions in output.

Downward shifts of MC and increases in output.

Q5. An increasing-cost industry is so named because of the positive slope of which curve? (1 marks)

Each firm's short-run average cost curve

Each firm's short-run marginal cost curve

Each firm's long-run average cost curve

The industry's long-run supply curve