F.Y B.COM
SEMESTER - 2
MID SEMESTER EXAMINATION
MICRO ECONOMICS
(ME)
90 MCQS
(1) Which of these is also called production indifference curve?
(A) Iso-cost
(B) Iso-quant
(C) Total Product curve
(D) Marginal Product curve
(2) Which of these is the differentiating element between Marginal Utility Analysis & Indifference Curve Analysis?
(A) Diminishing satisfaction from a good as more
(B) Rationality assumption of it is consumed
(C) Cardinal versus Ordinal measurability of utility
(D) a and b
(3) In the acronym MRTS, T stands for _______.
(A) Total
(B) Tangent
(C) Technical
(D) Technology
(4) Rationality of maximizing satisfaction applies to _______.
(A) Producer
(B) Consumer
(C) Firm
(D) worker
(5) Which of these is not a basic assumption of economics?
(A) Nature affects the ability of different regions to produce various goods
(B) Consumer's income and prices of goods remain constant while we examine her consumption behavior
(C) Economic units/agents are consistent in their choices
(D) A worker cannot be expected to work for 24 hours a day to maximize output
(6) At the point of producer's equilibrium, which of these is true?
(A) MRTSxy = ratio of factor prices
(B) MRTSxy = prices of the factors of production
(C) MRTSxy = marginal rate of substitution of two consumer goods
(D) MRTSxy = ratio of product prices
(7) Which of these implies Transitivity assumption?
(A) If a consumer prefers good A to B, and good B to C, then he will prefer good C to
(B) If a consumer prefers good A to B, and good B to C, then he will prefer good B to A
(C) If a consumer prefers good A to B, and good B to C, then he will prefer good A to
(D) If a consumer prefers good A to B, and good B to C, then he will be indifferent between good B and C
(8) Rational stage of production under the Law of Variable Proportions is one at which
(A) Producer operates with least inputs
(B) Producer minimizes cost
(C) Producer maximizes inputs
(D) Producer operates in the second stage of production
(9) Expansion path shows________.
(A) Intersection points between successive iso-costs and iso-quants
(B) Tangency points between successive iso-costs & iso-quants
(C) Short run increases in output
(D) both b and c
(10) In stage III of production under the Law of Variable Proportions, the Marginal Product is
(A) Negative
(B) Equal to the Average Product
(C) Greater than the Average Product
(D) Constant
(11) Which of these statements are true in the case of the Law of Variable Proportions?
i. All factors of production are variable
ii. Factor ratios are variable
iii. At least one factor is variable
iv. At least one factor is fixed
(A) ii-iii
(B) ii-iii-iv
(C) iii-iv
(D) i-ii-iii-iv
(12) With reference to the Law of Variable Proportions, the state of technology is assumed to be
(A) Zero
(B) Constant
(C) Improving
(D) Deteriorating
(13) The Law of Equi-Marginal Utility states that the consumer will distribute his consumption in such a way that the MU of the last rupee spent on each good is
(A) Constant
(B) Smaller
(C) Equal
(D) Greater
(14) Under marginal utility analysis, if a commodity is free, the consumer will be in equilibrium when
(A) Her marginal utility is zero
(B) Her total utility is maximum
(C) Her marginal utility is zero
(D) Both b and c
(15) Which of the following is not implied by the term production?
(A) Manufacturing, trading and service
(B) Destruction of utility businesses
(C) Creation of form, time and place utility
(D) b and c
(16) In stage Il of production under the Law of Variable Proportions, the Marginal Product is
(A) Negative
(B) Equal to the Average Product
(C) Greater than the Average Product
(D) Smaller than the Average Product
(17) A downward sloping indifference curve implies that, as the quantity of one good increases, that of the other good should
(A) Increase
(B) Decrease
(C) Remain constant
(D) Rise
(18) In stage 1 of production under the Law of Variable Proportions, the Marginal Product is
(A) Smaller than the Average Product
(B) Negative
(C) Greater than the Average Product
(D) Equal to the Average Product
(19) If A, B, C and D are points on iso-quant IQ1, and if point A represents 100 units of output produced, then how much output can be produced at point B?
(A) 300
(B) 200
(C) 400
(D) none
(20) Returns to scale can be depicted by
(A) Difference in distance between successive iso-costs
(B) Difference in convexity of iso-quants
(C) Difference in the distance between successive iso-quants
(D) Single iso-quant
(21) The slope of a budget line would change if _______.
(A) Prices of the two goods remain constant
(B) Prices of the two goods change by the same proportion
(C) Budget of the consumer increases
(D) Prices of the two goods change by different proportions
(22) Which of these is a sufficient condition for consumer's eqilibrium under indifference curve analysis?
(A) Indifference curve should be convex to the origin at the point of equilibrium.
(B) Indifference curve should be concave to the origin at the point of equilibrium.
(C) Indifference curve should be flatter at the point of equilibrium.
(D) Indifference curve should be steeper at the point of equilibrium.
(23) If two goods are perfect complements of each other, their indifference curve will be _______.
(A) Horizontal straight line
(B) Vertical straight line
(C) L - Shaped
(D) Rectangular hyperbola
(24) Which of these does not indicate indirect consumption?
(A) Raw material used in production of final product
(B) Ice cream consumed by a consumer
(C) Use of transport service in delivering goods
(D) Cotton used in making cloth to the consumer
(25) _____ is the reason for decline in the marginal rate of substitution of one good for another.
(A) Perfect complementary
(B) Imperfect substitution
(C) Perfect substitution
(D) All of the above
(26) The slope of a line drawn from the origin through the expansion path measures _______.
(A) Ratio of factor prices
(B) Quantity of output
(C) Quantity of input-output
(D) Ratio of factors of production
(27) In the case of consumer equilibrium under law of EMU, the ratios of MU to Price of the respective goods should be equal to _______.
(A) Marginal utility of money
(B) Scale of preference
(C) Satisfaction
(D) Money Income
(28) The downward sloping property of isoquant follows from a valid assumption that the marginal physical product of factors is _______.
(A) Positive
(B) Zero
(C) Constant
(D) Negative
(29) The budget line can be algebraically written as
(A) PxQx - Py.Qy = M
(B) Px/Qx + Py/Qy = M
(C) Px.Qx + Py.QY = M
(D) Px.Qxx Py.Qy = M
(30) Which of these implies a criticism of the concept of Cardinal Utility?
(A) Utility cannot be assigned a number
(B) Marginal utility of money cannot remain constant
(C) Utlitites of goods cannot be independent
(D) All of the above
(31) Consumption is a
(A) Wealth acquiring activity
(B) Wealth using activity
(C) Wealth saving activity
(D) B and C
(32) In which of the following conditions does the Law of Diminishing Marginal Utility work?
(A) When units are un-identical
(B) Time lag in consumption
(C) Taste and preference keep changing
(D) Continuous consumption
(33) A downward sloping MU curve demonstrates
(A) the principle of constant marginal utility
(B) the principle of equi-marginal utility
(C) dissatisfaction of the consumer
(D) decreasing intensity of desire for the product
(34) Cardinal Utility Approach to the consumer behaviour analysis has been developed by
(A) Adam Smith
(B) Alfred Marshall
(C) H.R. Hicks
(D) J.B. Say
(35) Which of the following is correct?
(A) If MU > 0, TU will increase
(B) If MU = 0, TU will be zoro
(C) If MU < 0, TU will increase
(D) If MU < 0, TU will negative
(36) Marginal utility of a commodity Decreases because _______
(A) Maximum satisfaction is reached
(B) Demand decreases
(C) Intensity of desire decreases
(D) Resources are limited
(37) Consumer's surplus is equal to
(A) Total utility - Total expenditure on the good
(B) Total utility × Total expenditure on the good
(C) Total utility + Total expenditure on the good
(D) Total utility / Total expenditure on the good
(38) Which one of the following is not a property of indifference curve?
(A) Indifference curves are downward sloping from right to left
(B) Indifference curves never intersect each othe
(C) Indifference curves are convex to the origin
(D) Higher the indifference curve higher the level satisfaction
(39) The Cardinal approach to utility assumes marginal utility of money to be
(A) Zero
(B) Constant
(C) Negative
(D) Increasing
(40) The slope of indifference curve indicates
(A) Price ration of two commodities
(B) Factor substitution
(C) MRS between the two commodities
(D) Level of Income
(41) Consumer surplus is the area:
(A) Below the demand curve but above the market price
(B) Above the demand curve
(C) Below the demand curve but below the market price
(D) Below the demand curve
(42) Which of these is an incorrect condition for Consumer's equilibrium under marginal utility analysis?
(A) MU > P
(B) MU = P
(C) MU = P = 0
(D)MUx/Px = MUy/Py = MUm
(43) The capacity of a consumer to buy goods can be expressed by the
(A) Price of the goods
(B) Budget line
(C) Indifference curve
(D) Income
(44) Identify the assumption which indicates that the consumer prefers the combination of goods that has more units of the two goods rather than less.
(A) Transitivity assumption
(B) Non - satiety assumption
(C) Consistency assumption
(D) Assumption of ordinal utility
(45) From the given table calculate surplus:
Unit | Price - X | MUx |
1 | 5 | 20 |
2 | 5 | 14 |
3 | 5 | 9 |
4 | 5 | 5 |
5 | 5 | 3 |
6 | 5 | 1 |
7 | 5 | 0 |
(A) 28
(B) 48
(C) 17
(D) 20
(46) Which are the reasons responsible for increasing returns to scale
(A) Underutilization of fixed factor
(B) Specialization and division of labour
(C) Indivisibility of factors
(D) All of the above
(47) When a firm moves from on point on aniso-quant to another, which of the following will not happen?
(A) A change in the ratio in which the inputs are combined.
(B) A change in the marginal products of the inputs.
(C) A change in the rate of technical substitution.
(D) A change in the level of output
(48) When the two inputs are perfect complements, the MRTS between two inputs will be
(A) One
(B) Zero
(C) Infinity
(D) Increasing
(49) Which of the following is not an assumption of the Law of variable proportions?
(A) State of technology remains constant
(B) Long run
(C) Some factor inputs are fixed
(D) Homogeneity of factor units
(50) _______ Is the locus of points of tangency between successive isoquants and isocost lines.
(A) Expansion path
(B) Price line
(C) Production indifference curve
(D) Both A and B
(51) Production function shows the relation between
(A) factor inputs and output
(B) production and price
(C) factor inputs and oost
(D) production and sales revenue
(52) Which of the following is correct in the case of law of variable proportions?
(A) All factors are variable
(B) All factors are used in fixed proportions
(C) All factors ro fixed
(D) At least one factor is fixed
(53) The slope of iso-cost line shows
(A) Funds available to the firm
(B) Ratio of the factor prices
(C) Equal quantity output
(D) Ratio of product prices
(54) Under the law of variable proportions, stage l is known as
(A) Stage of diminishing returns
(B) Stage of constant returns
(C) Stage of negative returns
(D) Stage of increasing returns
(55) MRTSLK is the slope of
(A) Demand Curve
(B) Iso-Cost Line
(C) Indifference Curve
(D) Iso - quant
(56) Under Decreasing Returns to Scale, in order to double the level of output, the factor inputs would have to be
(A) Less than doubled
(B) doubled
(C) More than doubled
(D) Equal to target output
(57) Which of the folloying is/are Economies of Scale
(A) Bulk purchase of raw materials
(B) Vertical integration
(C) Better technology
(D) All of the above
(58) In which stage of short-run input-output relation would a rational producer operate?
(A) Stage l
(B) Stage II
(C) Stage III
(D) Stage IV
(59) Identify where exactly would a rational producer operate?
(A) At the peak point of the total product curve
(B) At the peak point of the marginal product curve
(C) At the end of the second stage if the variable factor is free of cost
(D) At the start of the second stage if the variable factor is free of cost
(60) Optimum combination of fixed and variable factors is indicated by
(A) Peak point of total product curve
(B) Peak point of marginal product curve
(C) Peak point of average product curve
(D) All of the above
(61) Identify the odd one out
(A) Marginal Utility Analysis
(B) Indifference curve
(C) Alfred Marshall
(D) Equi-Marginal Utility
(62) Identify the odd one
(A) Transitivity-assumption
(B) Cardinal Utility
(C) Non-satiefy assumption
D) Weak ordering of utility
(63) Identify the odd one out
(A) Law of equi-marginal utility
(B) Marginal utility of money
(C) ratio of marginal utilities of goods to their respective price
(D) Diminishing marginal rate of technical substitution
(64) When a firm moves down on a given isoquant, which of the following happens?
(A) increase in the use of factor of production shown on the x axis & decrease in the use of factor of production shown on the y axis.
(B) fall the use of both the factors of production
(C) increase in the use of both the factors of production
(D) increases in the use of factor production shown the y axis & decrease in the use of factor of production shown on the x axis
(65) Identify the odd one
(A) Indirect
(B) Direct
(C) Consumption
(D) Law of Variable Proportions
(66) Under the Law of Variable Proportions, which stage is considered to be the rational stage of production?
(A) Stage - I
(B) Stage - II
(C) Stage - III
(D) Stage - IV
(67) Consumer Surplus is,
(A) The total utility derived from consumption of a good
(B) The total utility derived from consumption of a good less the price of that good
(C) The total utility derived from consumption of a good less the total expenditure on that good
(D) Marginal utility derived from consumption of a good less total expenditure on that good
(68) The capacity of a consumer to buy goods can be expressed by the
(A) Price line
(B) Prices of the goods
(C) Income of consumer
(D) indifference curve
(69) Which of these statements is correct
(A) Lower the indifference curve higher the level of satisfaction
(B) Higher the indifference curve lower the price
(C) Indifference curve represents the income of the consumer
(D) Higher the indifference curve higher the level of satisfaction
(70) Which of these is not applicable to the laws of returns to scale?
(A) Short run
(B) Relationship between relative increase in inputs & relative increase in output
(C) Long run
(D) Variable factors of production
(71) Which of these has reference to Transitivity assumption?
(A) The consumer will always prefer more quantity of goods to less
(B) The consumer always aims at maximization of satisfaction
(C) If a consumer prefers A to B and B to C, then she prefers A to C
(D) A and B
(72) An Indifference curve is
(A) Vertical straight line
(B) Horizontal straight line
(C) Downward sloping from left to right
(D) Upwards rising from left to right
(73) Under decreasing returns to scale, to double the level the output, the factor inputs need to be
(A) More than doubled
(B) Less than doubled
(C) Kept constan
(D) Increased by 50 percent
(74) The slope of an Iso-quant measures...
(A) Marginal rate of substitution between two consumers
(B) Marginal rate of substitution between two factors of production
(C) Marginal rate of substitution between two commodities
(D) Marginal rate of substitution between two producers
(75) The Law of Equi-Marginal Utility equates
(A) Cost of each good
(B) Ratio of Marginal utility to price for each good consumed
(C) Prices of all goods consumed
(D) Marginal Utilities of all goods consumed
(76) The position of the budget line of a consumer depends on...
(A) The income of the consumer
(B) Price of the goods
(C) The units of goods consumed by her
(D) Both A and B
(77) Identify the odd one out
(A) Perfect substitutes
(B) Convex indifference curve
(C) Downward sloping linear (straight line) indifference curve
(D) Constant marginal rate of substitution
(78) Identify the odd one out
(A) Hicks and Allen
(B) Cardinal utility
(C) Indifference curve
(D) Ordinal utility
(79) Which of these implies Cardinal Utility?
(A) One unit of Mango gives Rs. 50 worth of satisfaction
(B) Mango gives more satisfaction to Vinita than apple
(C) Both A and B
(D) Neither A nor B
(80) An indifference map is
(A) A collection of indifference curves showing higher & higher in- come level of a consumer
(B) A locus of tangency points between indifference curves & price lines
(C) A collection of consumer's cardinal utilities
(D) A collection of indifference curves showing the scale of preference of consumer
(81) The Law of Diminishing Marginal Utility applies only when
(A) Consumption is continuous
(B) There is a gap in consumption
(C) The good has a price but not if it is a free good
(D) Each successive unit consumed is better than the previous
(82) Which of the following is / are the cause of economies of scale?
(A) Better supervision & control over the variable factors of production
(B) Better utilization of fixed factor
(C) only A
(D) Both A and B
(83) Which of these is true for indifference curves ...
(A) They cut each other
(B) They slope downwards from right to left
(C) They slope downwards from left to right
(D) They are tangent to each other
(84) When two goods are perfect complements of each other, the rate of substitution between them is
(A) High
(B) Very high
(C) Zero
(D) Infinite
(85) Identify the end point of the second stage of production under the law of variable proportions.
(A) Peak point of average product curve
(B) Zero average product
(C) Peak point of marginal product curve
(D) Zero marginal product
(86) Which of these implies Ordinal utility?
(A) Mango gives more satisfaction to Vinit than apple
(B) One unit of Mango gives Rs. 50 worth of satisfaction while one unit of Apple gives Rs.40 worth of satisfaction to Vinit
(C) Both A and B
(D) Neither A nor B
(87) Diminishing marginal rate of substitution implies that
(A) One unit of x can substitute more & more units of y, successively
(B) One unit of x can substitute for zero units of y, successively
(C) One unit of x can substitute less & less units of y, successively
(D) One unit of x can substitute for same units of y, successively
(88) Which of these is incorrect?
(A) When MU is negative, TU is negative
(B) When MU is negative, TU declines
(C) When MU is positive, TU increases
(D) When MU is zero, TU remains constant
(89) Identify the odd one
(A) Laws of returns to scale
(B) long run
(C) Short run
(D) All factors of production are variable
(90) Which of the following is / are NOT applicable to the law proportions
(A) Factors of production are perfect complements of each other
(B) Factor all factors of production are used in rigid proportion
(C) All factors of production are variable
(D) All of the above
F.Y B.COM
SEMESTER - 2
MID SEMESTER EXAMINATION
MICRO ECONOMIC
(ME)
MCQS - 2018
(A) Marginal Utility Analysis
(B) Indifference curve
(C) Alfred Marshall
(D) Equi-Marginal Utility
(2) Identify the odd one
(A) Transitivity-assumption
(B) Cardinal Utility
(C) Non-satiefy assumption
D) Weak ordering of utility
(3) Identify the odd one out
(A) Law of equi-marginal utility
(B) Marginal utility of money
(C) ratio of marginal utilities of goods to their respective price
(D) Diminishing marginal rate of technical substitution
(4) When a firm moves down on a given isoquant, which of the following happens?
(A) increase in the use of factor of production shown on the x axis & decrease in the use of factor of production shown on the y axis.
(B) fall the use of both the factors of production
(C) increase in the use of both the factors of production
(D) increases in the use of factor production shown the y axis & decrease in the use of factor of production shown on the x axis
(5) Identify the odd one
(A) Indirect
(B) Direct
(C) Consumption
(D) Law of Variable Proportions
(6) Under the Law of Variable Proportions, which stage is considered to be the rational stage of production?
(A) Stage - I
(B) Stage - II
(C) Stage - III
(D) Stage - IV
(7) Consumer Surplus is,
(A) The total utility derived from consumption of a good
(B) The total utility derived from consumption of a good less the price of that good
(C) The total utility derived from consumption of a good less the total expenditure on that good
(D) Marginal utility derived from consumption of a good less total expenditure on that good
(8) The capacity of a consumer to buy goods can be expressed by the
(A) Price line
(B) Prices of the goods
(C) Income of consumer
(D) indifference curve
(9) Which of these statements is correct
(A) Lower the indifference curve higher the level of satisfaction
(B) Higher the indifference curve lower the price
(C) Indifference curve represents the income of the consumer
(D) Higher the indifference curve higher the level of satisfaction
(10) Which of these is not applicable to the laws of returns to scale?
(A) Short run
(B) Relationship between relative increase in inputs & relative increase in output
(C) Long run
(D) Variable factors of production
(11) Which of these has reference to Transitivity assumption?
(A) The consumer will always prefer more quantity of goods to less
(B) The consumer always aims at maximization of satisfaction
(C) If a consumer prefers A to B and B to C, then she prefers A to C
(D) A and B
(12) An Indifference curve is
(A) Vertical straight line
(B) Horizontal straight line
(C) Downward sloping from left to right
(D) Upwards rising from left to right
(13) Under decreasing returns to scale, to double the level the output, the factor inputs need to be
(A) More than doubled
(B) Less than doubled
(C) Kept constan
(D) Increased by 50 percent
(14) The slope of an Iso-quant measures...
(A) Marginal rate of substitution between two consumers
(B) Marginal rate of substitution between two factors of production
(C) Marginal rate of substitution between two commodities
(D) Marginal rate of substitution between two producers
(15) The Law of Equi-Marginal Utility equates
(A) Cost of each good
(B) Ratio of Marginal utility to price for each good consumed
(C) Prices of all goods consumed
(D) Marginal Utilities of all goods consumed
(16) The position of the budget line of a consumer depends on...
(A) The income of the consumer
(B) Price of the goods
(C) The units of goods consumed by her
(D) Both A and B
(17) Identify the odd one out
(A) Perfect substitutes
(B) Convex indifference curve
(C) Downward sloping linear (straight line) indifference curve
(D) Constant marginal rate of substitution
(18) Identify the odd one out
(A) Hicks and Allen
(B) Cardinal utility
(C) Indifference curve
(D) Ordinal utility
(19) Which of these implies Cardinal Utility?
(A) One unit of Mango gives Rs. 50 worth of satisfaction
(B) Mango gives more satisfaction to Vinita than apple
(C) Both A and B
(D) Neither A nor B
(20) An indifference map is
(A) A collection of indifference curves showing higher & higher in- come level of a consumer
(B) A locus of tangency points between indifference curves & price lines
(C) A collection of consumer's cardinal utilities
(D) A collection of indifference curves showing the scale of preference of consumer
(21) The Law of Diminishing Marginal Utility applies only when
(A) Consumption is continuous
(B) There is a gap in consumption
(C) The good has a price but not if it is a free good
(D) Each successive unit consumed is better than the previous
(22) Which of the following is / are the cause of economies of scale?
(A) Better supervision & control over the variable factors of production
(B) Better utilization of fixed factor
(C) only A
(D) Both A and B
(23) Which of these is true for indifference curves ...
(A) They cut each other
(B) They slope downwards from right to left
(C) They slope downwards from left to right
(D) They are tangent to each other
(24) When two goods are perfect complements of each other, the rate of substitution between them is
(A) High
(B) Very high
(C) Zero
(D) Infinite
(25) Identify the end point of the second stage of production under the law of variable proportions.
(A) Peak point of average product curve
(B) Zero average product
(C) Peak point of marginal product curve
(D) Zero marginal product
(26) Which of these implies Ordinal utility?
(A) Mango gives more satisfaction to Vinit than apple
(B) One unit of Mango gives Rs. 50 worth of satisfaction while one unit of Apple gives Rs.40 worth of satisfaction to Vinit
(C) Both A and B
(D) Neither A nor B
(27) Diminishing marginal rate of substitution implies that
(A) One unit of x can substitute more & more units of y, successively
(B) One unit of x can substitute for zero units of y, successively
(C) One unit of x can substitute less & less units of y, successively
(D) One unit of x can substitute for same units of y, successively
(28) Which of these is incorrect?
(A) When MU is negative, TU is negative
(B) When MU is negative, TU declines
(C) When MU is positive, TU increases
(D) When MU is zero, TU remains constant
(29) Identify the odd one
(A) Laws of returns to scale
(B) long run
(C) Short run
(D) All factors of production are variable
(30) Which of the following is / are NOT applicable to the law proportions
(A) Factors of production are perfect complements of each other
(B) Factor all factors of production are used in rigid proportion
(C) All factors of production are variable
(D) All of the above
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