ECO 401 SOLVED QUIZ No .1

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 An individual whose attitude toward risk is known as

a.       Risk Neutral

b.       Risk Averse

c.      Risk Loving

d.       All of the above

Which of the following branch of economics in which we have discuss about the What ought to be.

a.     Normative Economics

b.       Positive Economics

c.       Both A & B

A market with few entry barriers and with many firms that sell differentiated products is

a.       Perfect Competition

b.       Monopoly

c.       Monopolistic Competition

d.     Oligopoly

Which of the following best expresses the law of demand?

a.      A lower price reduces demand

b.    A higher price reduces quantity demanded

c.       A higher price increases demand

d.      A lower price shifts the demand curve to the right

The maximum price that a consumer is willing to pay for a good is called

A.      The reservation price

B.      The first-degree price

C.     The market price

D.      The block price

ACE stand for

a.     Average cost curve for new entrant firm

b.       Average consumption curve for new entrant firm

c.       Average cost curve for new Entrance firm

d.       All of the above

Which of the following system is bases on Quran and Sunnah.

a.       Dictatorship

b.       Command or Planned Economy

c.       Free Market or Capital ECO

d.    Islamic Economic system

 

 

More output could be produced with available resources if:
Select correct option:


a.   Resources are allocated efficiently.

b.    Resources are imperfectly shiftable among alternative uses.

c.    Prices are reduced.

d.    The economy is operating at a point inside the production possibilities curve.

A schedule which shows the various amounts of a product consumers are willing and able
to purchase at each price in a series of possible prices during a specified period of time is
called:


·         Supply Scedule.

·         Demand Scedule.

·         Quantity supplied Scedule.

·         Quantity demanded Scedule.

Suppose we find that the cross-price elasticity of demand for two products is a negative
number. We know that:


·         The two goods are normal goods.

·         The two goods are inferior goods.

·         The two goods are substitutes.

·         The two goods are complements.

 

If diminishing marginal utility holds and a person consumes less of a good, then all else
being equal:


·         The price of the good will rise.

·         Marginal utility will rise.

·         Expenditure on the good will increase.

·         Marginal utility will decline.

AD curve slopes upward for both Keynes and classical


·         True

·         False

 

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The cross elasticity of demand of complements goods is:


·         Less than 0.

·         Equal to 0.

·         Greater than 0.

·         Between 0 and 1.




Our economy is characterized by:


·         Unlimited wants and needs.

·         Unlimited material resources.

·         No energy resources.

·         Abundant productive labor.

A Natural Monopoly is most likely to exist when:


·         There are large barriers to entry.

·         There are long term patents.

·         There are large economies of scale.

·         There is government regulation of the industry.

The trend of unemployment over the last forty years is:


·         A decrease in unemployment.

·         It has remained largely unchanged.

·         An increase in unemployment.

·         It is too difficult to tell so don’t bother.

 

Which one of the following is most likely to lead to an increase in aggregate demand? An
increase in:


·         Government tax revenues

·         Household savings

·         Business capital investment

·         Demand for imports

A nation’s production possibilities curve is “bowed out” from the origin because:


·         Resources are not perfectly shiftable between productions of the two goods.

·         Capital goods and consumer goods utilize the same production technology.

·         Resources are scarce relative to human wants.

·         Opportunity costs are decreasing.

Which of the following markets is most likely to be oligopolistic?

·         The market for corn.

·         The market for aluminum.

·         The market for colas.

·         The market for ground coffees.

Which best expresses the law of demand?


·         A higher price reduces demand.

·         A lower price reduces demand.

·         A higher price reduces quantity demanded.

·         A lower price shifts the demand curve to the right.

 

 

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