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ECO402 Microeconomics MCQs

ECO402-Microeconomics 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 ECO402-Microeconomics

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The total cost of producing a given level of output is:
  • Maximized when a corner solution exists.
  • Minimized when the ratio of marginal product to input price is equal for all inputs
  • Minimized when the marginal products of all inputs are equal.
  • Minimized when marginal product multiplied by input price is equal for all inputs
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The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the variable cost?
  • 200
  • 5Q
  • 5
  • 5 + (200/Q)
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Which of the following costs always declines as output increases?
  • Average cost
  • Fixed cost
  • Average fixed cost
  • Average variable cost
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Incremental cost is the same concept as ______________ cost.
  • Average
  • Marginal
  • Fixed
  • Variable
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In order for a taxicab to be operated in New York City it must have a medallion on its hood. Medallions are expensive but can be resold and are therefore an example of:
  • A fixed cost.
  • A variable cost.
  • An opportunity cost.
  • A sunk cost.
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Which always increase(s) as output increases?
  • Fixed Cost only
  • Total Cost only
  • Variable Cost only
  • Total Cost and Variable Cost
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The law of diminishing returns applies to:
  • The short run only.
  • The long run only.
  • Both the short and the long run.
  • Neither the short nor the long run.
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The law of diminishing returns refers to diminishing:
  • Total returns.
  • Marginal returns.
  • Average returns.
  • All of the given options.
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Writing total output as Q change in output as [6;Q total labor employment as L and change in labor employment as [6;L the marginal product of labor can be written algebraically as:
  • [6;Q • L
  • Q / L
  • [6;L / [6;Q
  • [6;Q / [6;L
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Marginal product crosses the horizontal axis (is equal to zero) at the point where:
  • Average product is maximized.
  • Total product is maximized.
  • Diminishing returns set in.
  • Output per worker reaches a maximum.
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