Which of the following is not assumed to be constant along the money demand curve?
Ans-the interest rate
Which of the following will be hurt by inflation
A wage earner who bargains wages as a member of a trade union
Total fixed cost divided by the level of output yields
Average fixed costs
Demand curve faced by nuclear plant a monopoly shell be __ and for a wholesaler
Inelastic, perfectly elastic
Circular flow diagram in national income accounting is used to describe
Flow of income and expenditures in an economy
If a firm must produce a significant share of market output before low average cost can be achieved
Either monopolistic competition or oligopoly
When diminishing marginal returns set in the marginal product is
Negative and decreasing
If a perfectly competitive firms marginal revenue is rs 35
Its average revenue is rs 35
If the demand for Swordfish is price elastic and the price of Swordfish increases then
Total Revenue from Sword Fish sales will decrease
A US company owns a fast food store in India. The value of Goods and services produced in the store are included
The GDP of India but not of US
Which of the following is unique to oligopoly among all the market structures
Which Real world market most closely approximates perfect competition
Wholesale wheat market
Which one of the following will shift the money demand curve to the right, keeping other things constant?
A decrease in the interest rate
What is the effect of an expansionary monetary policy on the demand for investment curve?
It causes downward movement along the curve
The Average fixed curve is
Downward slopping due to constant total fixed cost
Green GDP means
Measuring the impact of production on air pollution, water pollution, soil depletion and the loss of other natural resources
Demand Pull inflation is shown by an
outward shift of the aggregate demand curve
The consumer still gets the newspaper at Re 1.50 with growing number of supplements, better printing quality a lot of promotional rewards, gifts and better news coverage…
Tacit Collusion between the two dailies in future may lead to
Monopoly profits to both the firms
In the end the benefits from price war between TOI and HT were made by the
All of these
Newspaper market described in the case shows features of
Benefits for both the Times of India and Hindustan Times would have been higher if they would have completed primarily on
Quality of news coverage
A firm facing a downward-sloping demand curve sells 50 units of output at Rs 10 each. The firm’s marginal revenue is
Ans- less than 10
The additional output obtained by adding another unit of labor to the production process is called _____.
Ans- the marginal product of labor
If there is a decrease in the supply of money, which one of the following is most likely to happen?
Ans- interest rates will rise
A cartel’s marginal cost curve is the:
Ans- horizontal sum of all the individual firms’ marginal cost curves
total revenue of a good falls with fall in price, this indicates
Ans- the price elasticity of demand is lower than 1
In the range of increasing marginal returns, the total product is
Ans-increasing at an increasing rate
The distinction between discretionary fiscal policy and automatic stabilizers is that
Ans- only discretionary fiscal policy can stimulate the economy
Automatic stabilizers act to ______ government expenditures and _______ government revenues during recession in United States
In the short run, a monopolistic competitive firm will shut down when
Ans-average total cost is more than average revenue.
Which of the following actions would not increase GDP?
Ans-Tom gets fired for being late so often after his alarm clock breaks, so he moves off to the wilderness.
The money demand curve slopes downward because
Ans- None of these (higher interest rate increases the opportunity cost of holding money)
The income effect refers to the impact of a change in
Ans-the price of a good on real income
Which one of the following would be shown on IBM’s accounting statement?
Ans-revenue, explicit costs and accounting profit
Suppose it costs Minnie’s Mini-Golf (a monopolist) not a penny more to let another person on the course. If Minnie’s faces a linear (downward-sloping) market demand curve, it will maximize profits by choosing the point on the demand curve where
Ans-price elasticity is unit elastic
Resources are divided into the following broad categories
Ans-Natural resources, labor, capital, and entrepreneurial ability
The income effect of an increase in the price of potatoes (an inferior good) is a
Ans-decrease in the quantity demanded of potatoes
Which of the following is true regarding Gross Domestic Product?
Ans-it can be measured either from total spending or total expenditure.
For an equilibrium interest rate of 5%, an increase in the money supply other factors taken constant will most likely
Ans-Decrease the interest rate below 5%
The value of intermediate goods that are sold is
Ans-Not added to GDP
John spends exactly the same rupee amount on chocolates each week, regardless of their price John’s demand curve for chocolates is
if the loss minimizing output for a perfectly competitive firm is zero then at all other output levels
Ans- total revenue is less than total cost
The automobile industry is
ans-an oligopoly due to heavy…..
Which one of the following actions will not increase GDP?
Ans-An installer of an automobile tyre punctures the cars tyres parked near his neighbourhood
Which of the following statement/s Is/are correct?
- a) Economic information is usually scarce and cosy to acquire
- b) Economic information is usually not required for rational decision making
Ans- A is correct, b is false
When break even point is 2000 units, selling price per unit Rs 14 and variable cost is rs. 8, find out fixed cost
The base year for a price index is the year
Ans-that serves as a reference point
Which of the following could be true of perfect competition but not of monopoly?
Ans-There are no barriers to entry.
If a firm is producing at an output where the total revenue curve crosses the total cost curve
Ans- revenue is maximized
The law of demand states that
Ans-price and quantity demand are inversely related to each other, other factors being constant
Macroeconomics deals with
The demand for products from monopolistic competition is elastic due to:
Ans- large number of buyers
Which one of the following characterizes a perfectly competitive market?
Ans- perfect product information available to buyers
If rice is a normal good, then the income effect of a price change means that
Ans- if income increases, demand for rice shifts rightward
In the short run, a monopolistically competitive firm is
Ans-not guaranteed any level of economic profit
In the context of circular flow of income and expenditure which of the following statements is not correct?
Ans- firms sells factors of production to households
If the marginal propensity to Consume (MPC) 0.75, a decrease in net taxes of Rs. 100 billion will increase he equilibrium level of real GDP
Ans- $400 Billion
ans- causes fewer problem than unanticipated
if the marginal propensity to save MPS is 0.2 and the government purchases decrease by 5000
ans-dcerease by 25000
As output expands, the slope of the average total cost curve
Ans- is first negative and then positive
Natural monopolies form when
Ans- long-run average cost declines as a firm expands output
Which of the following would not be included in GDP as a form of consumption spending?
ans -Ann prepares Tim’s income tax return.
All of the following are true of a perfectly competitive firm in long-run equilibrium except one. Which is the exception
Ans- Marginal cost is minimized
-If the managers of a theater plan to raise ticket prices to increase ticket revenue then they must believe that demand is
cost-push inflation is typically depicted graphically as an
Ans-inward shift of aggregate supply and demand
Dunng inflationary times, which of the following is unlikely to happen?
Ans-People are willing to lend money for longer periods
Statement A firm in monopolistic competition are not producing at minimum average cost,
Statement B statement a firms in monopolistic competition have excess capacity
Ans- Both A and B is true
For a renter, the income effect of an increase in apartment rents will:
ans-have a greater impact than the income effect of an increase in the price of a chewing gum.
An increase in the interest rate, other things taken as constant, will
Ans- increase the quantity of loanable funds supplied
Economists classify all of the following as capital, except one. Which one is not capital?
ans- a $20 bill in a firm’s petty cash drawer
Transfer payments are
Ans-not included in GDP because they do not represent payments for currently produced goods or services.
Suppose sales of Maruti Brezza increases with an increase in the price of Hyundai Venue. Which one of the following options best explain the situation?
Ans- the substitution effect
if the inflation rate is 5 percent and you receive a wage increase of 5 percent.
Ans- your nominal income increases by 5 percent but your real Income is unchanged
If the cigarette sellers in the tobacco industry formed a cartel and decided to set price along a straight line downward sloping demand curve, which point would they choose if they want to gain the highest total revenue?
Ans-The point which MR is equal to MC.
Which one of the following is true about the MC curve?
Ans- it intersects both the AVC and ATC at their minimum points
Movements along the demand curve are called changes in
Ans- quantity demanded
In economics, ‘capital’ refers to
Ans-machines, buildings, tools and knowledge
The demand curve a monopolist’s faces
Ans-downward sloping market
Microsoft Edge closed unexpectedly.
Ans-is the inelastic demand curve
A monopolistic competitor’s demand curve is
Ans-more elastic than a monopolist but less elastic than a perfect competitor
Which one of the following is most likely to be a fixed resource for the Speedy Word Processing and Resume Company?
Ans- computer terminals
The automobile industry is
Ans- an oligopoly due to heavy Investment in plant and machinery and R&D.
The four components of GDP as per expenditure approach are
Ans-Investment, government purchases consumption and net exports.
The defining characteristic of oligopoly is that each firm
Ans- its mutually interdependent
The total revenue from selling trucks is equal to
Ans-the price of a truck times the quantity sold
staement A: money income is simply the number of rupees received per period. Statement B: change in price level keeps the money income constant but may increase or decrease income.
Ans- Both A and B is correct
slow-moving and non moving items of inventories, other than stock of finished goods and merchandise, is described as
Ans- non current asset
Suppose you received a 3 percent increase in your nominal wage. Over the year, inflation ran about 6 percent. Which of the following is true
Ans-Your real wage fell
A decrease in the interest rate will
Ans- increase the quantity of money people want to hold
which one of the following commodities has the highest elasticity of demand
Which of the following is most likely produced in a monopolistically competitive market
GDP of India denotes
Ans-the market value of all final goods and services produced during a year in india regardless of who owns the resources
If a firm is experiencing diminishing marginal returns to labor which one of the following must be true?
Ans-The positive effect of specialization in production is being offset by the negative effect of crowding of inputs
The total revenue from selling trucks is equal to
Ans- the price of a truck times the quantity sold
The immediate effect on GDP of Ibrahim’s purchase of a government bond is
Ans- nonexistent since no real goods and services have been produced
The reason economists assume that firms try to maximize economic profits
Ans-if over time firms that don’t earns profits would face difficulty in bearing the variable
If equilibrium real GDP demanded rises from $4 trillion to $6 trillion when government purchases increase by $1 trilion, how large is the marginal propensity to consume
If the marginal cost is greater than the average cost then
Ans-the average cost is increasing
If the marginal cost is less than the average cost then
Ans-the average variable cost is below marginal cost
If the Indian economy is already producing at its potential, the spending multiplier in the long-run
Average revenue for a perfectly competitive firm is equal to
Ans-total revenue/marginal revenue
The government imposed a price floor above the market price of the milk which would increase consumers’ expenditure on milk
Ans-demand is inelastic
in the context of national income accounting depreciation
Ans-is the loss a value of capital assets
Which of the following can increase real GDP per person?
Ans- all of these
Inputs that can be increased or decreased in the short run are called
The ToysForU an Indian Toy Company can produce 500 water pistol for a total cost of Rs.1 of Rs.3,000, but it would have costs of Rs.200 even if it produced no water pistols. Which o
Ans-Total cost is increasing at a decreasing rate.
Which one of the following is a constant elasticity supply curve?
Ans- supply curve passing through the origin
Which is the best method of computing National Income?
Ans- Combination of all these methods.
The demand curve faced by a perfectly competitive firm
Ans- is perfectly elastic
if the GDP price index is 150 and nominal GDP is Rs.9,000 billion, then real GDP is
Which if the following is most likely to be a fixed resource for the Speedy Word Processing & Resume Company?
Which of the following would be included in GDP?
Ans-payment of the monthly telephone bill by Mr. Laconic
Economics is the study of
Ans- how people use limited resources to satisfy their unlimited wants
Accounting profit is
Ans-never less than economic profit
For a non-price discriminating monopolist, an economic profit is maximized in the short run at a price of Rs 140 Marginal revenue at that output level is
Ans-less than RS 140
In the case of a normal good, an increase in consumers’ incomes would shift the
Ans-demand curve outward
If the manager of a theater plan to raise ticket prices to increase the revenue then they must believe that demand is
A characteristic of monopolistic competition is:
Ans-High barriers to entry and exit
The demand curve facing Imelda’s Shoe Boutique, a monopolistically competitive firm
Ans-slopes downward because Imelda’s sells a differentiated product
Which of the following is NOT a cause of inflation?
Ans-Increase in demand for goods/products and services
On a graph of production costs, the vertical distance between the fixed cost curve and the total cost curve at a specific quantity represents
Ans-average variable cost
Other things remaining constant, the quantity of money demanded varies
Ans-inversely with the market interest rate
A brand name may contribute to oligopolists’ economic profit by
Ans-acting as a barrier to entry
Which of the following is not considered a barrier to entry?
diseconomies of scale
In a perfectly competitive industry we are likely to find
Ans-firms that do not advertise
Firms in a perfectly competitive market have no control over
Ans- what price to charge
Which one of the following is most likely to be the price inelastic demand?
Ans-all of these
Government purchases are assumed to be autonomous because they are
Ans-independent of the level real GDP
Natural monopolies form when
Ans-long-run average cost declines as a firm expands output
Which of the following is a component of aggregate demand?
Ans- purchases by government
A firm practising price discrimination will be
Ans- charging different prices for a product in different market
If the Indian economy is operating at less than the potential GDP an increase in the money supply in the short run will lead to
Ans- demand side inflation
Along a demand curve, real income is assumed to be constant
Ans- can charge whatever price it wants
If Joe says that nothing comes close to a Pepsi, his demand for Pepsi is likely to be
Ans-relatively price inelastic
if the price of Pepsi-Cola increases from Rs. 5 to Rs. 6 per can and the quantity demanded decreases from 100 cans to 50 cans, then the demand is
An increase in a person’s real wage necessarily means
Ans-greater purchasing power
Which one of the following commodities has the lowest elasticity of demand?
The quantity theory of money states that in the long run
Ans-an increase in nominal money supply will cause a proportionate increase in the price level
In the circular flow of income and expenditure
Ans- inspections are equal to leakages
The circular flow of income shows the relationship between
Ans- government, firms, households, foriegn sector
Markets reduce transactions costs
Ans-by decreasing the time spent on searching for information about goods and services
Given the availability of California oranges, demand for Florida oranges will
Ans-be more elastic than if there were no California oranges
In times of rapid inflation,
Ans-money loses its use as a medium of exchange
The demand curve facing a monopolist
Ans-lies above its marginal revenue curve
The law of demand assumes that as the price of a good increases,
Ans-consumers tend to shift their purchases to relatively cheaper substitute
If the cross elasticity of demand between product X and product Y is negative then
Ans-X and Y are complementary goods
What do monopolistic competition, pure monopoly, and perfect competition have in common?
Ans-the rule of profit maximization
Which of the following is a feature that monopolistic competition and oligopoly have in common?
Ans-extensive advertising to differentiate products.
For perfectly competitive firms, the relationship been the market price (P), average revenue (AR), and Marginal revenue (MR) is-
An increase in the interest rate will
Ans- decrease investment regardless of whether firms have to borrow money to make an investment
If marginal benefit is greater than marginal cost, a rational choice Involves:
Ans- more of the activity
Which of the following is correct?
Ans- Expansionary gap is the excess of actual GDP over potential GDP and government adopts a contractionary fiscal policy to address the issue
Monopolistic competition is best described as
Ans- many firms with some control over price and some product differentiation
Transaction of financial assets (shares, stocks etc) cause
Ans-Do not affect the national income
If the IMT administration raises the tuition fees of our students in order to increase revenue, it will
ANS-be successful it demand is inelastic
Which one of the following would an economist consider as a capital?
Ans-a lawyer’s personal computer
An example of an uncontrollable resource that contributes to diseconomies of scale for a move theater Is
Ans-public roads congested with traffic
As wants are unlimited but resources are scarce
Ans-choices must be made
For luxury goods income elasticity is
Ans- greater than one
The demand curve faced by a firm will be more elastic if
Ans- More the substitutes for its product
Which one of the following statement about price elasticity of demand is NOT true?
Ans-Higher the proportion of consumer’s budget spent on a good, the lower the value of price elasticity
Statement A an increase in the price of pizza, other things constant, increases the opportunity cost of pizza
Statement B Because of higher opportunity cost of pizza consumers will reduce demand for other goods and increase the quantity demanded of pizza
Ans-Statement As correct but statement B is not correct
If the low GDP growth rate of India is attributed to the country’s monetary policy then we should observe that the country’s money supply
Ans-had decreased and interest rates had increased
If the price of a haircut (a normal good) increases, other things constant, the
Ans-quantity demanded of haircuts decreases
Two heavy equipment manufacturers might collude in an effort to do all of the following except one. Which is the exception?
Ans-take advantage of the legal benefits that cartels receive
The effect of a change in net taxes on the quantity of real GDP demanded equals the resulting shift in the consumption function times
Ans-the autonomous net tax multiplier
In the real world, quantity demand is not likely to be perfectly inelastic because
Ans-then supplier could charge any prices which the consumers will be unable to afford
A cartel’s profit-maximizing quantity occurs where the cartel’s
Ans-marginal cost equals marginal revenue
For a monopolist, marginal revenue is
Ans-less than the price
Which of the following statement regarding the basic economic problem of scarcity correct?
Ans-The problems will exist as long as resources are available in limited amounts
Which of the following actions is an example of expansionary fiscal policy?
Ans- decrease in the income tax rates
As output expands, the slope of the average total cost curve
Ans-is first negative and then positive
Which of the following is the best example of an investment as defined by economists?
Ans-firm buying personal computers for its secretarial staff
A perfectly competitive firm that earns an economic profit in the short run choose the output that
Ans-maximizes total revenue
The marginal cost curve intersects the average total cost curve (ATC)
Ans- at the ATC’s minimum point
GDP does not include the
Ans-value of all transactions in the economy during given period
in double-entry GDP accounting
Ans-the value of output produced must equal the value of resource payments generated in producing that output
A Family Travel Agency is a monopolistic competitor who offers services that are differentiated from the services of other producers in the industry
Ans-has some power to control the price charges
A perfectly competitive firm is
Ans-price taker and hence cannot determine price but can determine the amount of..
(a) ____expresses quantity theory of money and
(b) ____denotes the value of simple spending multiplier?
Ans- (a) MV= PY (b) 1/1- MPC
GDP is a poor measure of social well-being because
Ans-the value of leisure time is not counted in GDP
If the income elasticity for product X is positive but less than one then it is a
Ans-superior product and a necessity
A firm facing constant Input prices, increasing marginal returns
Ans-can occur due to specialization and division of labor
Golden rule of profit maximization says that a profit maximizing firm produces
Ans-where marginal revenue equals marginal cost provided marginal cost cuts marginal revenue from below
The steeper the short-run aggregate supply curve,
Ans-the impact of a shift in the aggregate demand curve will be less on real GDP
If Marginal Propensity to consume (MPC) is 0.8 and the government purchases increase by
Ans-Increase by Rs. 25,000
Rhonda sets a house she has owned for 15 years. To make it more marketable, she buys…..
Ans-the sale price of the wallpaper and carpet cost along with the installation fee for
The additional output obtained by adding another unit of labor to the production process is
Ans-the marginal product of labor
Which one of the following is not considered as a natural monopoly
Ans-the automobile industry
Which one of the following statement about the market is not true?
Ans- All markets provide the same amounts of information
Fiscal policy refers to the regulation of
Ans-spending and taxing policies used by the government to influence the economy
Because resources are scarce,
Ans-people must make choices among alternative
An intersection point known as Four Comers lies 300 kn from the nearest town. Al this inter one small pharmacy. Which of the following is true?
Ans- The gas stations are oligopolists, the pharmacy is a monopolist.
Which of the following is most likely to be a fixed resource for the City Slicker’s Dude Ranch?
Ans -The lodge where the guests stay
Suppose art n barf restaurant
Pay the higher rent and leave menu prices unchanged
The GDP price index is the ratio of
Nominal GDP to real GDP multiplied by 100
Economists believe that
Concern for the welfare of others is consistent with the concept of self interest
Which of the following is most likely produced in a monopolistic competitive market
If a monopolistically competitive firm raises its price, it
Loses some, but not all, of its customers
A monopolistic competitive firm can raise price somewhat due to
Check Marketing Management Question Answer 2021: http://www.allgyan.com/marketing-management-question-answer/