Question:

When an individual’s income falls, when everything else remains the same, his demand for inferior goods:

A.

Increases

B.

Decreases

C.

Remains unchanged

D.

Cannot say

Answer» a. Increases

Question:

The lowest point in the business cycle is referred to as the:

A.

Expansion.

B.

Boom.

C.

Trough.

D.

Peak.

Answer» c. Trough.

Question:

A market is clearly NOT perfectly competitive if which of the following is true inequilibrium

A.

price exceeds marginal cost.

B.

price exceeds average variable cost.

C.

price exceeds average fixed cost.

D.

price equals opportunity cost

Answer» a. price exceeds marginal cost.

Question:

When prices of only few commodities rise

A.

Sporadic Inflation

B.

suppressed inflation

C.

open inflation

D.

creeping inflation

Answer» a. Sporadic Inflation

Question:

A natural monopoly refers to a monopoly that is defended from direct competition by

A.

economies of scale over a broad range of output

B.

a government franchise

C.

control over a vital input

D.

a patent or copyright

Answer» a. economies of scale over a broad range of output

Question:

Allocative efficiency occurs when the:

A.

minimum of average total cost equals average revenue.

B.

minimum of average total cost equals marginal revenue.

C.

marginal cost equals the marginal benefit to society.

D.

marginal revenue equals marginal benefit to society.

Answer» c. marginal cost equals the marginal benefit to society.

Question:

When the price of the substitute commodity of X falls, the demand for X:

A.

Rises

B.

Falls

C.

Remains unchanged

D.

All of the above is possible

Answer» b. Falls

Question:

Who told Inflation is too much of money chasing too few goods:

A.

Coulbourn

B.

Keynes

C.

Friedman

D.

Samuelsson

Answer» a. Coulbourn