Economics - Practice Test | ExamPrepSheets

[#1306] An income-demand curve for a "Luxury Commodity" slopes-

(A) upward to the right from the origin

(B) vertically

(C) upwards from left to right only beyond a certain level of consumer's income

(D) horizontally

Correct Answer

(C) upwards from left to right only beyond a certain level of consumer's income

[#1307] Suppose the short run cost function can be written as TC=250 + 10Q. Average fixed cost equals

(A) 250/Q

(B) 250

(C) 10

(D) 250/Q + 10

Correct Answer

(A) 250/Q

Explanation

Solution: If the short run cost function can be written as TC=250 + 10Q. Average fixed cost equals 250/Q.

[#1308] Price discrimination often favours public interest because it

(A) Allows production of some products that would have been otherwise difficult in the economy due to the fear of making losses

(B) Opens consumption possibilities to the consumer that would otherwise not be inaccessible if a single price prevailed in the market

(C) Allows firms to make supernormal profits, which in turn, allows them to sustain price wars when breaking into new markets

(D) All of the above

Correct Answer

(A) Allows production of some products that would have been otherwise difficult in the economy due to the fear of making losses

[#1309] In perfect competition, the demand curve of a firm is:

(A) Vertical

(B) horizontal

(C) positively sloped

(D) negatively sloped

Correct Answer

(B) horizontal

[#1310] Match the following. List-I (Elasticity Coefficient) List-II (Change in Total Revenue) a. e = 0 1. Increase b. e < 1 2. Decrease c. e = 1 3. No change d. e = ∞ 4. Decrease to zero

(A) a-1, b-2, c-3, d-4

(B) a-1, b-3, c-4, d-2

(C) a-2, b-1, c-3, d-4

(D) a-4, b-3, c-1, d-2

Correct Answer

(A) a-1, b-2, c-3, d-4

Economics - Study Mode

[#1306] An income-demand curve for a "Luxury Commodity" slopes-

Correct Answer

[#1307] Suppose the short run cost function can be written as TC=250 + 10Q. Average fixed cost equals

Correct Answer

Explanation

[#1308] Price discrimination often favours public interest because it

Correct Answer

[#1309] In perfect competition, the demand curve of a firm is:

Correct Answer

[#1310] Match the following. List-I (Elasticity Coefficient) List-II (Change in Total Revenue) a. e = 0 1. Increase b. e < 1 2. Decrease c. e = 1 3. No change d. e = ∞ 4. Decrease to zero

Correct Answer