Question 1

Given the consumption function C = a + bY, the slope 'b' represents:

Accepted Answer

A)  MPS
B)  autonomous consumption
C)  MPC
D)  Saving C

Question 2

The elasticity of demand for the demand curve of a firm under perfect competition is

Accepted Answer

A)  1
B)  0
C)  -1
D)  ? D

Question 3

____ indicates what proportion of the increased income will be saved.

Accepted Answer

A)  MPS
B)  MPC
C)  MPI
D)  GDP A

Question 4

______ function expresses the relationship between price of the good and quantity of the good supplied.

Accepted Answer

A)  Supply
B)  Consumption
C)  Demand
D)  Income

Question 5

Demand function for a commodity is D = 44 - 7P and supply function S = 2P -10, then the equilibrium price is:

Accepted Answer

A)  4
B)  6
C)  8
D)  10

Question 6

The Price elasticity of demand for a product is 1.5 and its MR = 8, find its price:

Accepted Answer

A)  12
B)  24
C)  53
D)  16

Question 7

Mathematically ____ is the first derivative of the consumption function.

Accepted Answer

A)  MPS
B)  MPC
C)  MPI
D)  GDP

Question 8

When the total revenue functions is R = 100?X2, the marginal revenue is :

Accepted Answer

A)  100 - 2X
B)  100
C)  ?2X
D)  ?X2

Question 9

Function which map the relation between the physical measure of money and the perceived value of money is _____

Accepted Answer

A)  Income
B)  Investment
C)  Demand
D)  Utility

Question 10

Given a total utility function, Marginal utility is obtained by finding ______

Accepted Answer

A)  First derivative
B)  Second derivative
C)  Integral
D)  Coefficient

Question 11

_____ measures the change in TP due to a one unit change in the quantity of labour used:

Accepted Answer

A)  MPC
B)  MPS
C)  MPI
D)  MPPL

Question 12

Necessities have _____ elasticity of demand of between 0 and +1.

Accepted Answer

A)  cross
B)  price
C)  income
D)  any of these

Question 13

For equilibrium market, the condition is____

Accepted Answer

A)  Demand > supply
B)  demand 
C)  demand = supply
D)  None of these

Question 14

____ refers to the change in total cost (TC) due to the production of an additional unit of output.

Accepted Answer

A)  MPC
B)  MC
C)  MPI
D)  MPPL

Question 15

When elasticity of demand is 2, the demand will be:

Accepted Answer

A)  Perfectly elastic
B)  Perfectly inelastic
C)  Relatively elastic
D)  Unit elastic

Question 16

At a price of Rs11.00, quantity demanded is 90; and at a price of Rs.9.00, quantity demanded is 110. The price elasticity of demand is:

Accepted Answer

A)  0.8
B)  1
C)  1.5
D)  -1.22

Question 17

_______ function was designed by J M Keynes to show the relationship between real disposable income and consumer spending.

Accepted Answer

A)  Consumption
B)  Investment
C)  Demand
D)  Utility

Question 18

The slope of ___curve will be positive if and only if the marginal cost curve lies above the AC curve.

Accepted Answer

A)  AC
B)  MC
C)  ATC
D)  MP

Question 19

The cost per output is given by C = 2x + 27. Then the marginal cost when x = 5 is:

Accepted Answer

A)  2
B)  27
C)  0
D)  47

Question 20

Given TR = 10x, TC = 5x+2, profit function is :

Accepted Answer

A)  5x - 2
B)  5x
C)  10x - 5x
D)  5x + 2

Exam 5: Economics Functions and Elasticities