Question:

Revealed preference theory assumes

A.

weak ordering

B.

strong ordering

C.

constant ordering

D.

multiple ordering

Answer» b. strong ordering

Question:

The cash balance equation M = KPO was given by:

A.

Keynes

B.

Pigou

C.

Robertson

D.

Marshall

Answer» d. Marshall

Question:

Find out the correct statement:

A.

Prediction of economic models cannot be refuted by empirical evidence

B.

Models transform verbal expressions in to more scientific expressions

C.

Models make no assumptions

D.

Economic models are comprehensive and not partial

Answer» b. Models transform verbal expressions in to more scientific expressions

Question:

When Total utility is increasing at an decreasing rate, marginal utility is

A.

constant

B.

negative

C.

increasing

D.

decreasing

Answer» d. decreasing

Question:

As per indifference curve analysis, consumer always try to reach

A.

higher indifference

B.

lower indifference curve

C.

middle indifference curve

D.

lower income price line

Answer» a. higher indifference

Question:

Scientific attempts to describe economic relationships are :

A.

Factual and can never be wrong

B.

Accurate ways to predict political viewpoints

C.

Known as positive economics

D.

Directed at the fairness of social programs

Answer» c. Known as positive economics

Question:

A production possibility curve is concave to the point of origin because of

A.

increasing marginal rate of transformation (mrt)

B.

increasing marginal opportunity cost (moc)

C.

both of the above

D.

decreasing marginal rate of transformation

Answer» c. both of the above

Question:

Other things being equal a decrease in demand can be caused by

A.

a fall in price of the commodity

B.

a fall in income of the consumer

C.

a rise in price of the substitute

D.

none of these

Answer» b. a fall in income of the consumer

Question:

MC at any level of output is given by

A.

slope of tc curve

B.

slope of tvc curve

C.

slope of either tc or tvc

D.

slope of tfc

Answer» c. slope of either tc or tvc

Question:

Psychological law of consumption states that the value of MPC is lies between zero and

A.

1

B.

2

C.

3

D.

4

Answer» a. 1