ECO401 Quiz No.1 Shared by Sana

Question # 1 of 20 ( Start time: 06:49:48 PM ) Total Marks: 1
Income elasticity of demand for the normal goods is usually:
Select correct option:
Positive.
Negative.
Constant.
One.


Question # 2 of 20 ( Start time: 06:51:18 PM ) Total Marks: 1
Suppose Saqib spends all his income on magazines. To get maximum level of satisfaction, the marginal utility of last dollar of income spent on magazines must be:
Select correct option:
Positive.
Negative.
Equal to the total income.
Equal to the price of magazines.


Question # 7 of 20 ( Start time: 07:16:06 PM ) Total Marks: 1
The opportunity cost of an action is:
Select correct option:
Same for everyone.
The value of the next best alternative.
The undesirable aspects of that action.
The average amount of unhappiness experienced by everyone involved


Question # 8 of 20 ( Start time: 07:17:28 PM ) Total Marks: 1
When producers are unable to meet market demand for the product, this results as:
Select correct option:
Surplus of goods
Market failure
Monopoly
Shortage of good


Question # 9 of 20 ( Start time: 07:18:19 PM ) Total Marks: 1
The production possibility frontier (PPF) shows all combinations of goods that:
Select correct option:
Society most desires.
Lie outside the curve.
Reflect full production.
An economy can produce with all available resources.


Question # 10 of 20 ( Start time: 07:19:24 PM ) Total Marks: 1
Suppose Ali derives total utility equals to 10 utils from the consumption of 1 bottle of Pepsi. When he consumes another bottle of Pepsi, he gets total utility equals 25 utils. His marginal utility in this case will be:
Select correct option:
2.5 utils.
15 utils.
25 utils.
35 utils.


Question # 11 of 20 ( Start time: 07:20:46 PM ) Total Marks: 1
If a decrease in price increases total revenue:
Select correct option:
Demand is elastic.
Demand is inelastic.
Supply is elastic.
Supply is inelastic.


Question # 20 of 20 ( Start time: 07:21:10 PM ) Total Marks: 1
Demand is elastic when the elasticity of demand is:
Select correct option:
Greater than 0.
Greater than 1.
Less than 1.
Less than 0.


Question # 12 of 20 ( Start time: 07:22:14 PM ) Total Marks: 1
Demand is said to be ---------------- when the elasticity of demand is less than 1.
Select correct option:
Increasing
Decreasing
Elastic
Inelastic


Question # 13 of 20 ( Start time: 07:24:20 PM ) Total Marks: 1
The marginal utility function of TU = 60Q – 4Q2 will be:
Select correct option:
60-8Q.
60-16Q.
60-4Q.
60Q2 -4Q.


Question # 14 of 20 ( Start time: 07:25:35 PM ) Total Marks: 1
When the cross-price elasticity of demand for two goods is less than zero then the goods are___________ goods.
Select correct option:
Complementary
Substitute
Inferior
Giffen


Question # 15 of 20 ( Start time: 07:27:00 PM ) Total Marks: 1
Sultan is running a logistics business and provides logistics services to the local business community. For his company, truck falls in the category of _______.
Select correct option:
Labor
Capital
Land
Entrepreneurship


Question # 16 of 20 ( Start time: 07:27:48 PM ) Total Marks: 1
If quantity demanded of videocassette players decreases by 15% as a result of 10% increase in its price, then one can conclude that demand for videocassette players is:
Select correct option:
Elastic.
Inelastic.
Perfectly elastic.
Perfectly inelastic.


Question # 17 of 20 ( Start time: 07:28:33 PM ) Total Marks: 1
The minimum price that a Government sets to support a desired commodity or service in a society is known as:
Select correct option:
Price ceiling.
Price rationing.
Price floor.
Price control.


Question # 18 of 20 ( Start time: 07:29:20 PM ) Total Marks: 1
Assume that the current market price is above the market clearing level. We would expect:
Select correct option:
A shortage to accumulate.
Downward pressure on the current market price.
Upward pressure on the current market price.
Lower production during the next time period.


Question # 19 of 20 ( Start time: 07:30:08 PM ) Total Marks: 1
If the price elasticity of demand for beans is estimated to be -0.4, then a 20% increase in price will decrease the quantity demanded by:
Select correct option:
14%.
8%.
16%.
20%.


Question # 20 of 20 ( Start time: 07:31:39 PM ) Total Marks: 1
If a good has income elasticity of demand equal to 1/2, the good is:
Select correct option:
Normal good (but not a luxury).
An inferior good.
Luxury good.
A Giffen good.