1 A tax is shifted ___________ to producers
if the supply is inelastic relative to demand.
A.   backward
B.   steeper
C.   forward
D.   upward
ANS: A
 
2 Price ceiling is a legal __________on the
price at which a good can be sold. 
A.   maximum
B.   minimum
C.   optimum
D.   efficient
ANS: A
 
3 The bandwagon effect makes the market
demand curve for the commodity to be ______
A.   more
elastic
B.   less
elastic
C.   unitary
D.   neutral
ANS: A
 
4 the Veblen effect also give rise to
__________ which result in ‘Z’ shaped demand curve
A.   Giffen
paradox
B.   Veblen
paradox
C.   bandwagon
effect
D.   index
paradox
ANS: B
 
5 in the equation Dx= a- b Px , a denotes
the ________of the demand .
A.   scarcity
B.   slope
C.   attributes
D.   cost
ANS: A
 
6 ________price influences the supply of a
commodity. 
A.   Reservation
B.   Optimum
C.   Negative
D.   Equilibrium
ANS: A
 
7 When demand is ______, price and total
revenue move in the same direction . 
A.   elastic
B.   unitary
elastic
C.   inelastic
D.   perfect
elastic
ANS: C
 
8 the demand for food items is _________
A.   inelastic
B.   elastic
C.   unitary
elastic
D.   perfect
inelastic
ANS: D
 
9 if demand is inelastic relative to supply,
most of tax burden is shifted to _______
A.   seller
B.   producer
C.   both
seller and buyer
D.   consumers
ANS: D
 
10 when the government impose the price floor
below the __________price , the price floor is not binding. 
A.   reserve
B.   equilibrium
C.   supply
D.   demand
ANS: A
 
11 the retail prices of all petroleum
products based on ___________formula. 
A.   international
parity
B.   domestic
parity
C.   SARC
parity
D.   Asian
parity
ANS: A
 
12 The convex indifference curve indicates
_______ marginal rate of substitution. 
A.   increasing
B.   constant
C.   upward
D.   neutral
ANS: A
 
13 A _____________sloping price consumption
curve indicates negative price effect. 
A.   downward
B.   horizontal
C.   forward
D.   back
ward
ANS: D
 
14 the compensatory variation in income
method leaves the consumers on _______
A.   higher
level of satisfaction
B.   same
level of satisfaction
C.   lower
level of satisfaction
D.   parallel
level of satisfaction
ANS: B
 
15 Indifference curve sloped downward from
left to right due to______ marginal rate of  substitution.
A.   diminishing
B.   increasing
C.   neutral
D.   constant
ANS: A
 
16 Returns to scale determine the behavior of
_________
A.   short
run average cost
B.   marginal
cost
C.   average
fixed cost
D.   long
run average cost
ANS: D
 
17 Which cost is incurred even if the company
is closed? 
A.   Sunk
cost
B.   Historical
cost
C.   Shutdown
cost
D.   Imputed
cost
ANS: C
 
18 Law of Variable proportion is applicable
in_________
A.   Agriculture
B.   Industries
C.   long
run
D.   agriculture
and industry
ANS: D
 
19 The average product reached its maximum
when _______
A.   marginal
product is zero
B.   there
are increasing returns to scale.
C.   marginal
cost is infinitely large
D.   it
is equal to marginal product
ANS: D
 
20 If marginal product is greater than
average product, then as output is increased_______
A.   average
product is unchanged
B.   Output
cannot be increased in these circumstances
C.   average
product decreases
D.   average
product increases
ANS: A
 
21 An isoquant is _______to an iso cost line
at equilibrium point.
A.   convex
B.   perpendicular
C.   concave
D.   tangent
ANS: D
 
22 Economies of scale are of two kinds______
2
A.   Temporary
and permanent
B.   Internal
and external
C.   Managerial
and industrial
D.   Natural
and artificial
ANS: B
 
23 Marginal cost is independent of_______
A.   fixed
cost
B.   average
cost
C.   variable
cost
D.   sunk
cost
ANS: A
 
24 Law of Variable proportion is applicable
in________
A.   Agriculture
B.   Industries
C.   Only
(a)
D.   Both
(a) & (b)
ANS: D