Você está na página 1de 4

MM midterm 2003

PART A
A FEW TYPOS MAY BE THERE PLEASE CONCENTRATE OF CONTENT WHICH
IS RIGHT
Time:30 min marks :25
1) Individual supply curve of a commodity represents
a) Minimum boundary of an individuals intentions
b) Maximum boundary of an individuals intentios
c) In a sense, both maximum and minimum boundary of an individuals intentions
d) Neither maximum nor minimum boundary of an individuals intentions
2) A diamond sells for a higher price than a gallon of water, because
a) Luxuries always have higher prices than necessities
b) Only a few people demand diamonds, but everyone needs water
c) The total cost of diamond production exceeds the total cost of water production
d) The total use value of diamond s exceeds the total value of water.
e) None
3) Stationery excerse bicycles and stair-stepper machines are substutues, according to
aerobic excersie experts. An increase in the price of exercise bicycles will
a) Shift the demand for stair-stepper machines to the right
b) Increase the quantity of stair-stepper machines sales
c) Lead to all of the above
d) None
4) Which of the following is not a source of shifts in the market demand
a) An increase in consumer income
b) A change in tastes
c) An increase in the population
d) A technological advance
e) All are sources of shifts
5) There is no change in quantity demanded of eans when the price of a shirt changes.
The cross elasticity of demand between them should be
a) Positive
b) Negative
c) Zero
d) None
6) All the following statements are correct except
a) The supply curve illustrates a relationship
b) The supply curve slopes upward and to the left
c) The curve can have different shapes for different goods
d) The supply curve can shift positions over time
7) Suppose the supply curve is perfectly elastic in the luxury car market and the govt.
decides to impose a specific tax of $500 per car. In this case, the new equilibrium
price in the market is
a) Going to rise exactly by #500 and quantity supplied will be less
b) Going to rise by less than $500 and quantity supplied will be more
c) Going to rise exactly by #500 and quantity supplied will be more
d) Going to rise by less than #500 and quantity supplied will be less

8) A rational consumers willingness to pay for each unit of a commodity equals his/her
a) Price elasticity
b) Consumer surplus
c) Marginal utility
d) Income elasticity
9) Gaurav has a production unit of video CDs. The technology he uses involves a
production process where it has a constant marginal rate of technical substitution
between its employees and capital equipments. Gauravs isoquant must
a) Llok like a downward sloping curve convex to the origin
b) Look like a upward sloping curve bending towards vertical axis
c) Look like a upward sloping straight line passing thru the origin
d) Look like a downward sloping straight line
e) None
10) In the short run, economically relevant range of production for a rational production
for a producer is/are
a) Between the points where APL is maximum and MPL is 0 ( all other factors
remaining const)
b) Between the points where TPL is maximum and APL is 0 ( all other factors
remaining const)
c) Possible in both the above
d) None
11) A particular technology allows Bajaj Tempo to produce the same level of output by
giving up 4 units of labour for 1 unit of capital. That means MRTSLK is
a)
b) 1
c) 4
d) 8
e) None
12) If we have contant returns to scale, and ve increase the quantiy of labour used per
unit of time by 10% but keep the amout of capital contsn, output will
a) Increase by 10%
b) Decreae by 10%
c) Increase by more than 10%
d) Increase by less than 10%
13) If at a particular point on an isoquant, MRTSLK is , then MPK/MPL is equal to
a) 4
b)
c) 1/8
d) None
14) If isoquants are convex to the origin, then it is because of
a) Constant marginal rate of technical substitution (MRTS) of factors
b) decreasing marginal rate of technical substitution (MRTS) of factors
c) increasing marginal rate of technical substitution (MRTS) of factors
d) Both (B) and (c)
e) None
15) The coefficient of price elasticity of supply indicates
a) The degree of competition in the market
b) The extent to which the supply curve shifts s price changes
c) Consumer responsiveness to price changes
d) How far businessman can stretch the price

e) None
16) Price elasticity of demand for beer is1/3. if price rises by 30% how does the quantity
demanded change?
a) Quantity demanded rises by 10%
b) Quantity demanded falls by 10%
c) Quantity demanded rises by 90%
d) Quantity demanded falls by 90%
e) None
17) Which of the following products would tend to have the most inelastic demand
a) Houses
b) Fridge
c) Salt
d) Movie show
18) Total income of a shelter ( having discretion to change price) is maximum when the
price elasticity of demand is
a) Zero
b) 1
c) Infinity
d) Any of above
19) In a competitive market. A price ceiling set above the equilibrium price will
a) Create a shortage
b) Increase the price
c) Create a surplus
d) Both (A) and (b)
e) Have no effect
20) Many private insurance companies are entering the country now. If govt decides to
put a price ceiling on insurance rates, then it will shift the
a) Demand to the left
b) Demand to the right
c) Supply to the left
d) Supply to the right
e) None
21) The Engel curve for a Giffen good is
a) Negatively sloped
b) Positively slped
c) Vertical
d) Horizontal
22) If the MRSXY for Pawan exceeds the MRSXY Sameer, it is possible for Pawan to
gain by giving up
a) X in exchange for more Y from Sameer
b) Y in exchange for more X from Sameer
c) Either X or Y
d) Neither X nor Y
23) Which of the following elasticties measure a movement along the demand curve
rather than a shift in the curve?
a) Price elasticity of demand
b) Income elasticity of demand
c) Cross-elasticity fo demand
d) All of above

24) A recent regulation requires tuna fishing companies to use nets that allow dolphins to
escape. These nets also allow some tuna to escape. This regulation causes
a) The supply of tunas to shift to the left
b) The demand for tunas to shift to the left
c) The demand for tunas shift to the right
d) The supply of tunas to the right
e) None
25) Suppose the coefficient of Price elasticity ( signs ignored) are 7.77, 0.77, 77.7 and
0.07 for demand schedules D1,D2,D3,D4 respetively. A 1% increase in price will
result in decrease in total receipts in the case (s) of
a) D2 and d4 only
b) D1 and D3 only
c) D2 and d3 only
d) D1 and d4 only

Você também pode gostar