MOCK TEST -3

1.

2.

3. For testing of consistency and viability of planning project which

4.

5.
6.

7. Even if costs increase, the MC remains unaffected, the cost is

[Link] fixed cost

[Link] cost

[Link] cost

[Link] cost

8. Generally the profits are maximized in the short run at the point at which

A Marginal cost of production is equal to the marginal return

.

B Marginal return is zero

.

C Marginal return is negative

.

D Marginal cost is zero

.

9. The market period supply curve for perishable commodities is

[Link] elastic

[Link] inelastic

[Link] elastic

[Link] inelastic

10. In which case the elasticity shown by the different points of a curve is the same?
A A rectangular hyperbola curve
.
B A downward sloping curve
.
C A straight line curve
.
D None of these
.
11. When with a change in price the total outlay on a commodity remains constant, it is a
case of

[Link] inelasticity

[Link] elasticity

[Link] elasticity

[Link] elasticity

12. Consider a demand curve which takes the form of a straight line cutting both axis.
Elasticity at the mid-point of the line would be

A.1.5

B.1.0

C.0

D.2.0

13. In long run competitive equilibrium

[Link] marginal firm will earn no profit

[Link] firm will incur losses

[Link] firm will earn only normal profit

[Link] firm will earn economic profit

14. A straight line, downward-sloping demand curve implies that, as price falls, the elasticity
of demand

[Link] the
same

[Link]

[Link]

[Link] zero

15. In the long-run, due to blocked entry pure profits can be made by

[Link] duopolist
 [Link] monopolist

[Link] oligopolist

[Link] of the above

16. Risk neutrality implies a

A constant utility of income.
.
B constant marginal utility of income
.
C diminishing marginal utility of income.
.
D increasing marginal utility of income.
.
17. With the expansion of output, the short-run average cost curve, beyond a point, starts
rising because

A. More production yields lower per unit price

B. Average fixed cost increases sharply

C. The law of variable proportions applies to short-run production*

D. Sales expenses become much larger

18. Total utility curve is

A Concave to x-axis
.
B Concave or convex depending on situations
.
C Convex to x-axis
.
D Concave to y-axis
.
19. Two commodities are considered to be perfect substitutes for each other if
the elasticity of substitution is
A Zero
.
B Negative
.
C Positive
.
D Infinite
.
20. Which of the following is the method of measuring elasticity of demand when change in
price of a commodity is substantial?
 [Link] method

[Link]
method

[Link] method

[Link] of these

21. The slope of the TVC or total cost curve indicates the
[Link] cost

[Link]
revenue

[Link] cost

[Link] cost

22. Indifference curve is downward sloping from left to right since more x and less
y give
A Less satisfaction
.
B More satisfaction
.
C Equal satisfaction
.
D Maximum satisfaction
.
23. Which of the following statements is correct or more nearly correct?
A If the price of a commodity falls, its value relative to other goods does not change
.
B Value has nothing to do with price
.
C An increase in the price of commodity represents a fall in its value
.
D The price of a good is its value measured in terms of money
.
24. "The opportunity cost of using any factor is what is currently forgone by using
it." This definition of opportunity cost is given by
[Link]

[Link]. Lipsey
 [Link] Robinson

[Link] A. Samuelson

25. A monopoly producer usually earns

A Abnormal profits
.
B Neither profits nor losses
.
C Only normal profits
.
D Profits and losses which are uncertain
.

26. Income elasticity of demand will be zero when a given change in income
brings about
A The same proportionate change in demand
.
B A more than proportionate change in quantity demanded
.
C A less than proportionate change in quantity demanded
.
D No change in demand
.
27. If AR curve is a falling straight line, MR curve will lie below it in such a way
that any line drawn from a point from Y-axis parallel to X-axis to meet the AR
curve is intersected by the MR curve
A Mid-way
.
B Less than half-way
.
C More than half-way
.
D Anywhere
.
28. When the average product is at its maximum, the equality can be reached
between
[Link] marginal product and primary product

[Link] marginal product and average product

[Link] marginal product and total product

[Link] marginal product and final product

29. Price discrimination is possible

 A When elasticities cannot be known
.
B When elasticities of demand are different in different markets at the ruling price
.
C When elasticities of demand in different markets are the same at the ruling
. price

D None of these
.
30. As a consumer increases his consumption of a commodity, the total utility he derives
from its consumption increases, but at a diminishing rate. This is

[Link] economic law

B.A statement of fact

C.A hypothesis

[Link] of the above

31. Which of the stages is relevant range for a rational firm in the competitive
situation in the following diagram?
[Link] I

[Link] II

[Link] III

[Link] of the above

32. The indifference curve which is 'L' shaped represents

A Perfect complementarity
.
B Perfect substitutability
.
C No substitutability
.
D Non complementarity
.
33. Short-run cost curves are influenced by

A External and internal economies and diseconomies

.
B Law of variable proportions
.
C Principle of returns to scale
.
D None of these
.
34. The economic analysis expects the consumer to behave in a manner
 [Link]

[Link]

[Link]

[Link]
t

35. f the total cost curve is plotted, marginal cost can be illustrated by
A.A straight line from the origin to the midpoint of the curve

[Link] slope of a tangent to the curve at any given output

[Link]-Shaped curve cutting the total cost curve at its lowest point

D.A straight line cutting the curve at its lowest point

36. In conditions of pure competition, in which the demand for a firm's product is
infinitely elastic, the firm's average revenue curve will be
A U shaped
.
B A horizontal straight line
.
C A vertical straight line
.
D A straight line at 45° to the horizontal axis
.
37. Which of the following statement is correct?

[Link] the slope of the demand curve is zero, demand is infinitely elastic and when the slope is
infinite, elasticity is zero

[Link] the slope of the demand curve is zero, elasticity is unity and also when the slope is
infinite, elasticity is unity

[Link] the slope of the demand curve is zero, elasticity is also zero and when the slope is
infinite, elasticity is also infinite.

[Link] of these

38. The normal long run average cost curve is influenced by the

[Link] of diminishing returns

[Link] and diseconomies of large scale production

 [Link] of constant returns to scale

[Link] of the above

39. Ceteris paribus, a change in the price of a commodity causes the quantity purchased of its
complements to move

A In an insignificant manner
.
B In the opposite direction
.
C In the same direction
.
D cannot be known
.
40. The Law of equi-marginal utility tells that if price of commodity falls

[Link] units of it will be bought

[Link] units of it will be bought

[Link] units of it will be marginal

bought

[Link] of it will be bought