Question:

Average Revenue is equal to:

A.

Price

B.

Cost

C.

Profit

D.

None of these

Answer» a. Price

Question:

If the supply curve of the commodity is having a positive slope, a rise in the price of the commodity, results in:

A.

Increase in supply

B.

Increase in quantity supplied

C.

Decrease in supply

D.

Decrease in quantity supplied

Answer» b. Increase in quantity supplied

Question:

If the amount of the commodity purchased remains unchanged when the price of another commodity changes, the cross elasticity of demand between them will be:

A.

Positive

B.

Negative

C.

Zero

D.

One

Answer» c. Zero

Question:

If average variable costs fall as output grows:

A.

Marginal costs must also be declining.

B.

Fixed cost must also be declining.

C.

Total cost must also be declining.

D.

Average cost must be below average variable cost.

Answer» c. Total cost must also be declining.

Question:

Three methods of computing the national income are:

A.

Savings, investment and income methods

B.

Outlay, depreciation and production methods,

C.

Production, outlay and income methods,

D.

Revenue, consumption and production methods

Answer» c. Production, outlay and income methods,

Question:

An indifference curve represent

A.

four commodities

B.

less than two commodities

C.

only two commodities

D.

only one commodity

Answer» c. only two commodities

Question:

When individuals income rises (everything remain the same) his demand fora normal good

A.

rises

B.

falls

C.

remains the same

D.

negative

Answer» a. rises

Question:

In the case of luxury goods, the income elasticity of demand will be:

A.

Less than unity

B.

Unity

C.

More than unity

D.

All the above

Answer» c. More than unity

Question:

An Indifference Curve to the right of another represents combinations which are:

A.

Indifferent

B.

Preferable

C.

Inferior

D.

Superior

Answer» b. Preferable

Question:

When saving is greater than investment in a two-sector model,

A.

Output should increase

B.

Output should decrease

C.

Output should not change

D.

None of these

Answer» b. Output should decrease