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ECO401- Economics
Question No: 1 ( Marks: 1 ) - Please choose one
Microeconomics is the branch of economics that deals with which of
the following topics?
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Question No: 2 ( Marks: 1 ) - Please choose one

Which of the following is a positive statement?
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Question No: 3 ( Marks: 1 ) - Please choose one

Ceteris paribus means:
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Question No: 4 ( Marks: 1 ) - Please choose one

While moving from left to right, the typical production possibilities
curve has:
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Question No: 5 ( Marks: 1 ) - Please choose one

Aslam decides to stay at home and study for his exam rather than
going out with his friends to a movie. His dilemma is an example of:
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Question No: 6 ( Marks: 1 ) - Please choose one

Which of the following is calculated as the percentage change in
quantity demanded of a given good with respect to the percentage
change in the price of another good?
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Question No: 7 ( Marks: 1 ) - Please choose one

If a 12% price reduction causes quantity demanded to rise by 12%
then:
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Question No: 8 ( Marks: 1 ) - Please choose one

Marginal utility is best described as:
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Question No: 9 ( Marks: 1 ) - Please choose one

At any given point on an indifference curve, the absolute value of
the slope equals:
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Question No: 10 ( Marks: 1 ) - Please choose one

The substitution effect of a wage increase will lead a person to:
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Question No: 11 ( Marks: 1 ) - Please choose one

In economics, the “long run” is a time period in which:
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Question No: 12 ( Marks: 1 ) - Please choose one

The rate at which a firm can substitute capital for labour and hold
output constant is the:
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Question No: 13 ( Marks: 1 ) - Please choose one

Costs determine all of the following EXCEPT:
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Question No: 14 ( Marks: 1 ) - Please choose one

To find the profit maximizing level of output, a firm finds the output
level where:
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Question No: 15 ( Marks: 1 ) - Please choose one

Graphically, marginal revenue is defined as:
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Question No: 16 ( Marks: 1 ) - Please choose one

Producer surplus in a perfectly competitive industry is:
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z
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Question No: 17 ( Marks: 1 ) - Please choose one

The optimal point of production for any individual firm is where:
► R =
► R >
► R <
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Question No: 18 ( Marks: 1 ) - Please choose one

Which of the following can be thought of as a barrier to entry?
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Question No: 19 ( Marks: 1 ) - Please choose one

You observe that the price of houses and the number of houses
purchased both rise over the course of the year. You conclude that:
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Question No: 20 ( Marks: 1 ) - Please choose one

In monopoly, which of the following is NOT true?
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Question No: 21 ( Marks: 1 ) - Please choose one

An individual whose attitude towards risk is known as:
►R
►R
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Question No: 22 ( Marks: 1 ) - Please choose one

If the cross price elasticity of demand of two goods is -1.5, then
both goods are:
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Question No: 23 ( Marks: 1 ) - Please choose one

In the above figure, the marginal utility of income is:

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Question No: 24 ( Marks: 1 ) - Please choose one

For price making firm, at the profit-maximizing level of output,
what is TRUE of the total revenue (TR) and total cost (TC) curves?
► R
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Question No: 25 ( Marks: 1 ) - Please choose one

How many points you need to know to calculate the price elasticity
of demand on the same demand curve?
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Question No: 26 ( Marks: 1 ) - Please choose one

Which of the following will happen if the current market price is set
below the market clearing level?
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Question No: 27 ( Marks: 1 ) - Please choose one

Suppose there are two goods A and B. What will happen to the
budget line if prices of both goods increase by the same percentage?
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Question No: 28 ( Marks: 1 ) - Please choose one

For which of the following good, the substitution effect of a lowered
price is counteracting by the income effect?
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Question No: 29 ( Marks: 1 ) - Please choose one
Which of the following is TRUE about an isocost line?
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Question No: 30 ( Marks: 1 ) - Please choose one

The total cost (TC) function is given as: TC = 200 + 5Q. What is the
fixed cost?
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Question No: 31 ( Marks: 1 ) - Please choose one

Collusion occurs when two or more firms decide to cooperate with
each other in the setting of prices and
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Question No: 32 ( Marks: 1 ) - Please choose one

In cartels, there are a small number of sellers and usually involve
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Question No: 33 ( Marks: 1 ) - Please choose one

What might be the reason of a rightward shift in the demand curve
for product X?
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Question No: 34 ( Marks: 1 ) - Please choose one

As price increases total revenue decreases in case of
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Question No: 35 ( Marks: 3 )

How concentration ratio can be used to asses the competition in an
industry?

Question No: 36 ( Marks: 5 )

If a consumer is facing some budget constraint and having many
indifference curves then what will be the optimum point where he
can maximize his utility. Explain with the help of diagram.

Question No: 37 ( Marks: 5 )

Fill in the missing figures in the table below:

Q P=AR TR MR
1 9
8
3 7
4 6

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