Question:

If the supply curve for labor is backward bending, and if the wage of a worker increases,she might choose to work:

A.

fewer hours per week, since she can earn the same income working fewer hours

B.

more hours per week, since she can earn the same income working fewer hours

C.

fewer hours per week, since every hour of leisure is cheaper than before

D.

more hours per week, since she needs to work more hours to earn the same income

Answer» a. fewer hours per week, since she can earn the same income working fewer hours

Question:

In the case of a ‘full bodied money’

A.

Intrinsic value is less than face value

B.

Intrinsic value is equal to face value

C.

Intrinsic value is greater than face value

D.

None of the above

Answer» b. Intrinsic value is equal to face value

Question:

At the best, or optimum, level of output for the pure monopolist,

A.

MR = SMC

B.

P = SMC

C.

P = lowest SAC

D.

P is highest.

Answer» a. MR = SMC

Question:

Under conditions of pure monopoly:

A.

there are close substitutes.

B.

there is no advertising.

C.

the firm is a price taker.

D.

entry is blocked.

Answer» d. entry is blocked.

Question:

Marginal revenue in a monopoly is:

A.

always greater than the price

B.

always equal to the price

C.

always smaller than the price

D.

sometimes greater and sometimes smaller than the price

Answer» c. always smaller than the price

Question:

The dual pricing system of charging high price during peak time and low price during ofpeak time is called

A.

Double pricing

B.

Dual pricing

C.

kinked pricing

D.

peak load pricing

Answer» d. peak load pricing

Question:

When AR is above AC, firm earns:

A.

Supernormal profit

B.

Loss

C.

Breakeven point

D.

Minimise losses

Answer» a. Supernormal profit

Question:

The representative firm in a purely competitive industry:

A.

will always earn a profit in the short run.

B.

may earn either an economic profit or a loss in the long run.

C.

will always earn an economic profit in the long run.

D.

will earn an economic profit of zero in the long run.

Answer» d. will earn an economic profit of zero in the long run.

Question:

Which of the following is an important form collusive oligopoly

A.

Bilateral monopoly

B.

Monopoly

C.

cartel

D.

Kinked Oligopoly

Answer» c. cartel

Question:

All of the following will cause the value of the marginal product of labor to increase,EXCEPT:

A.

an increase in the price of the good sold by the firm

B.

a new production technology is developed and implemented by the firm

C.

an increase in the number of workers employed by the firm

D.

an increase in the quantity of other factors of production used by the firm

Answer» c. an increase in the number of workers employed by the firm