Question:

In the Fisher’s extended equation of exchange MI VI represents:

A.

Credit money

B.

Primary money

C.

Both primary and credit money

D.

General price level

Answer» a. Credit money

Question:

Average Revenue curve under monopoly is :

A.

Upward slopping

B.

Downward slopping

C.

Horizontal straight line

D.

None of these

Answer» b. Downward slopping

Question:

Adam Smith, the father of modern economic theory, defined economics as a subject, which is mainly concerned with the study of nature and causes of generation of ______

A.

Wealth

B.

Welfare

C.

Hipness

D.

Scarcity

Answer» a. Wealth

Question:

“Treatise on money’ is a book written by:

A.

Pigou

B.

Marshall

C.

Robertson

D.

Keynes

Answer» d. Keynes

Question:

If a perfectly competitive firm finds that the profit maximizing output level occurs whereprice is equal to marginal cost but is less than average variable cost

A.

the firm will continue to operate in the short run since total revenue exceeds total variable cost but will exit the industry in the long run

B.

the firm will continue to operate in the short run since it has to pay the total fixed cost whether or not it continues to operate

C.

the firm will increase its selling price to raise revenue in order to be able to continue to operate profitably in the short run

D.

the firm will shut down in the short run and exit the industry in the long run if it does not foresee market conditions changing

Answer» d. the firm will shut down in the short run and exit the industry in the long run if it does not foresee market conditions changing