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This set of Micro Economics 1 Multiple Choice Questions & Answers (MCQs) focuses on Micro Economics 1 Set 15
Q1 | If the long run average cost curve for a typical firm in an industry is downward sloping to the right it becomes difficult to sustain the assumption of
- Diminishing returns
- Perfect competition
- Ceteris paribus
- Rising marginal costs in the short run
Q2 | Marginal costs and average variable costs are equal when
- Average variable cost is a maximum
- Average variable cost is rising
- Average variable cost is falling
- Average variable cost is a minimum
Q3 | Theory of demand examines the behaviour of the--------
- Consumer
- Producer
- Firm
- Industry
Q4 | The want satisfying power of a commodity:
- Satisfaction
- Utility
- Value
- Marginal Utility
Q5 | Utility is the concept which is:
- Objective
- Subjective
- Both
- None
Q6 | Change in utility resulting from one unit change in consumption is called:
- Total Utility
- Extra Utility
- Marginal Utility
- Average Utility
Q7 | When Total Utility is maximum, Marginal Utility is :
- Zero
- Negative
- Positive
- One
Q8 | When Marginal Utility is negative, Total Utility:
- Declines
- Increases
- Remains the same
- None of these
Q9 | Saturation point is the point where:
- TU = 0
- MU = 0
- MU is +ve
- TU = 1
Q10 | Measurable utility is the postulate of:
- Neo-Classical school
- Ordinalist school
- Behaviourist school
- Keneysians
Q11 | Which of the following is Gossen’s first law:
- Law of Diminishing Marginal Utility
- Law of Equi Marginal Utility
- Law of substitution
- Law of Diminishing Returns
Q12 | In the case of a free good, the consumer will be in equilibrium when:
- MU = P
- MU = 0
- TU = 0
- TU =1
Q13 | Change in demand due to a change in the price of related good :
- Cross demand
- Price demand
- Income demand
- None of these
Q14 | The Price and quantity relationship for an inferior good is:
- Direct
- Inverse
- Positive
- Indirect
Q15 | In the case of normal goods, the quantity demanded varies inversely with:
- Price of good
- Income of the consumer
- Fashion of the good
- Savings
Q16 | Which of the following is a cardinalist approach to demand analysis:
- Marshallian utility analysis
- Indifference Curve Analysis
- Revealed Preference Theory
- None of these
Q17 | The convexity of an indifference curve shows:
- Diminishing MRS
- Increasing MRS
- Constant MRS
- None
Q18 | A movement from one point to another along an indifference curve makes the satisfaction:
- Increasing
- Decreasing
- Unaltered
- None
Q19 | In the case of an indifference curve
- dU/dX>dU/dY
- dU/dX = dU/dY
- dU/dX
- dU/dX≤dU/Dy
Q20 | An Indifference Curve to the right of another represents combinations which are:
- Indifferent
- Preferable
- Inferior
- Superior
Q21 | As moving from left to right through an indifference curve, the MRS of X for Y
- Increases
- Remains the same
- Decreases
- Both A and C
Q22 | The slope of an indifference curve represents:
- Price ratio of good X and Y
- MRTS L,K
- MRSx,y
- MRS
Q23 | In the case of perfect complementaries, the MRS between goods is:
- Zero
- Positive
- Negative
- None
Q24 | In a combination of X and Y, if price of Y alone changes, the X intercept will :
- Rotate upwards
- Rotate downwards
- Not be changed
- Parallel
Q25 | At the point of tangency of an indifference curve with a budget line:
- MRSxy =Px/Py
- MRSxy>Px/PY
- MRSxy
- MRSxy≥Px/PY