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ECO401 Economics MCQs

ECO401-Economics study material for students of virtual university of Pakistan. Download Past(old) Papers solved/unsolved, past assignments, quiz, mcqs, lecture notes, video lectures, handouts, books of ECO401-Economics

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The demand curve for eggs is downward-sloping. Suddenly the price of eggs decreases from Rs.60/- per dozen to Rs.50/- per dozen. This will cause:
  • The demand curve for eggs to shift leftward.
  • Quantity demanded of eggs to decrease.
  • The demand curve for eggs to shift rightward.
  • Quantity demanded of eggs to increase.
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Rationing is needed due to the problem of 
  • Unemployment.
  • Inflation.
  • Scarcity.
  • Poverty.
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If marginal cost is Rs.15,000/- and marginal revenue is Rs.20,000/-. The firm should:
  • Reduce output until marginal revenue equals marginal cost.
  • Do nothing without information about your fixed costs.
  • Expand output until marginal revenue equals marginal cost.
  • None of the given options.
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Suppose all inputs are increased by 30% and output increases by more than 30% in a production process.  This means that the firm experiences:
  • Decreasing returns to scale.
  • Constant returns to scale.
  • Increasing returns to scale.
  • None of the given options.
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Suppose all inputs are increased by 20% but output increases by less than 20% in a production process.  This means that the firm experiences:
  • Decreasing returns to scale.
  • Constant returns to scale.
  • Increasing returns to scale.
  • None of the given options.
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Suppose the total utilities for the first four units of a good consumed are 13, 23, 33, and 43 respectively. What is the marginal utility of the third unit?
  • 10.
  • 13.
  • 20.
  • 33.
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Which of the following best describes a demand schedule?
  • It is a numerical tabulation of the quantity demanded of a good at different prices, ceteris paribus.
  • It is a graphical representation of the law of demand.
  • It is a systematic listing of all the variables that might conceivably bring about a change in demand.
  • It is a symbolic representation of the law of demand: P,Q and Q, P.
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What is meant by freedom of enterprise in pure capitalism?
  • It means that businesses are free to produce products that consumers want.
  • It means that consumers are free to buy goods and services that they want.
  • It means that resources are distributed freely to businesses.
  • It means that government is free to direct the actions of businesses.
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Which of the following is true about supply curve under monopoly?
  • It is same as the competitive market supply curve.
  • It is the portion of marginal cost curve where marginal costs exceed the minimum value of average variable costs.
  • It is the result of market power and production costs.
  • None of the given statements is true.
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In the above figure, the marginal utility of income is:
  • Increasing as income increases.
  • Constant for all levels of income.
  • Diminishes as income increases.
  • None of the given options.
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