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# ECO401 Quiz # 02 Solution and Discussion, Fall 2014, Due Date: 19-Nov-2014

ECO401 Quiz # 02 Solution and Discussion, Fall 2014, Due Date: 19-Nov-2014

Dear Students!

This is to inform that Quiz # 02 will be opened on November 17, 2014 and last date to attempt quiz will be November 19, 2014. 11:59 PM..

This quiz will cover Lecture 01-08.

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### Replies to This Discussion

Please all students related this subject Share your online Quizzes here to help each other.thanks

Please share the question and their answers of this quiz if anyone has done.
Thanks.

So no body replied yet.

I've been waiting for any help
today is last date to attempt quiz

me too, also waiting

helping material to solve second quiz

Which of the following shows the condition for consumer's equilibrium?

Marginal utility per dollar spent on each good being equalized across all goods.

The ratio of (marginal utility per unit of the good)/ (price per unit of the good) being equalized across all goods.

The ratio of marginal utilities being equated to the ratio of prices for all possible pairs of goods.

All of the given options.

Mujtaba has paid Rs. 75000 as rent last month which in his opinion has increased slightly as compared to previous months. Which of the following he has paid for?

Labor

Capital

Land

Entrepreneurship

Revenue is equal to price times:

Quantity.

Quantity minus total cost.

Quantity minus average cost.

Quantity minus marginal cost.

Arifa in her recent address in National assembly said that poverty should be reduced in Pakistan. Which category her statement falls in?

Normative

Positive

Negative

None of the given options

The law of diminishing marginal utility states:

The supply curve slopes upward.

The elasticity of demand is infinite.

Your utility grows at a slower and slower rate as you consume more and more units of a good.

Your utility grows at a slower and slower rate as you consume less units of a good.

Suppose a person is willing to give up 20 units of good A (on the vertical axis) for 10 units of good B (on the horizontal axis), and his level of satisfaction is unchanged, the marginal rate of substitution is:

0.5.

2.

5.

10.

Zafar Iqbal stated in his opening note at University of Economics that food prices should be controlled for a comfortable living. Which category his statement falls in?

Normative

Positive

Negative

None of the given options

Asifa while addressing the young parliamentarians said that rising inflation in Pakistan was due to the high interest rates. Which category her statement falls in?

Normative

Positive

Negative

None of the given options

In a free market economy, resources are allocated on the basis of:

A central planning authority.

Consumer preferences.

The level of profits of firms.

If the equilibrium price of Panadol tablet is Rs.2 and government imposes a Rs.1 price ceiling on the price of Panadol tablet, there will be ________ of Panadol tablet.

Surplus

Shortage

Increase in production

Decrease in demand

If price of MP3 players rises and as a result, the demand for headphones decreases, then one can say that MP3 players and headphones are:

Normal goods.

Substitutes.

Complements.

Inferior goods.

A farm can produce 100 kilogram of apples per year with 2 workers and 400 kilogram of apples per year with 3 workers. The marginal product of the third worker is:

100 kilogram.

300 kilogram.

400 kilogram.

500 kilogram.

If inputs used in the production of wheat are increased by 30 percent and wheat production increases by 40 percent, then there must be:

Increasing returns to factor.

Constant returns to scale.

Increasing returns to scale.

Decreasing returns to scale.

Microeconomics is the branch of economics that deals with which of the following?

Individual consumers

Individual firms and investors

Unemployment and interest rates

Individual consumers and individual firms and investors

Atif Khan, Young minister for agriculture, has updated in a talk show that rise in food prices is due to the rising oil prices. Which category his statement falls in?

Normative

Positive

Negative

None of the given options

Our economy is characterized by:

Unlimited wants and needs.

Unlimited material resources.

No energy resources.

Abundant productive labor.

Ahmad spends all of his money on food and clothes. What would happen to Ahmad’s budget line if his income increased by 20 percent holding prices constant?

It would shift inward.

It would shift outward.

It would rotate about the axis for food.

It would rotate about the axis for clothes.

--------------- is the rate at which a firm can substitute capital for labor and hold output constant.

Diminishing marginal returns

Marginal rate of substitution

Marginal rate of production

Marginal rate of technical substitution

Accounts office of Z&X corporations has paid Rs 250000 on account of profit in the month of August 2011. Which of the following the Accounts Office has paid for?

Labor

Capital

Land

Entrepreneurship

Sultan is running a logistics business and provides logistics services to the local business community. For parking trucks he has hired an open plot in the mid of the city. For his company, the open plot falls in the category of _________.

Labor

Capital

Land

Entrepreneurship

Suppose a person is willing to give up 20 units of good A (on the vertical axis) for 10 units of good B (on the horizontal axis), and his level of satisfaction is unchanged, the marginal rate of substitution is:

0.5.

2. (Correct)

5.

10.

If the equilibrium price of Panadol tablet is Rs.2 and government imposes a Rs.1 price ceiling on the price of Panadol tablet, there will be ________ of Panadol tablet.

Surplus

Shortage (Correct)

Increase in product

Which of the following shows the condition for consumer's equilibrium?
Marginal utility per dollar spent on each good being equalized across all goods.
The ratio of (marginal utility per unit of the good)/ (price per unit of the good) being
equalized across all goods.
The ratio of marginal utilities being equated to the ratio of prices for all possible
pairs of goods.
All of the given options.
Mujtaba has paid Rs. 75000 as rent last month which in his opinion has increased
slightly as compared to previous months. Which of the following he has paid for?
Labor
Capital
Land
Entrepreneurship
Revenue is equal to price times:
Quantity.
Quantity minus total cost.
Quantity minus average cost.
Quantity minus marginal cost.
Arifa in her recent address in National assembly said that poverty should be
reduced in Pakistan. Which category her statement falls in?
Normative
Positive
Negative
None of the given optionsThe law of diminishing marginal utility states:
The supply curve slopes upward.
The elasticity of demand is infinite.
Your utility grows at a slower and slower rate as you consume more and more units
of a good.
Your utility grows at a slower and slower rate as you consume less units of a good.
Suppose a person is willing to give up 20 units of good A (on the vertical axis) for 10
units of good B (on the horizontal axis), and his level of satisfaction is unchanged,
the marginal rate of substitution is:
0.5.
2.
5.
10.
Zafar Iqbal stated in his opening note at University of Economics that food prices
should be controlled for a comfortable living. Which category his statement falls in?
Normative
Positive
Negative
None of the given options
Asifa while addressing the young parliamentarians said that rising inflation in
Pakistan was due to the high interest rates. Which category her statement falls in?
Normative
Positive
Negative
None of the given options
In a free market economy, resources are allocated on the basis of:
A central planning authority.
Consumer preferences.
The level of profits of firms.If the equilibrium price of Panadol tablet is Rs.2 and government imposes a Rs.1
price ceiling on the price of Panadol tablet, there will be ________ of Panadol tablet.
Surplus
Shortage
Increase in production
Decrease in demand
If price of MP3 players rises and as a result, the demand for headphones decreases,
then one can say that MP3 players and headphones are:
Normal goods.
Substitutes.
Complements.
Inferior goods.
A farm can produce 100 kilogram of apples per year with 2 workers and 400
kilogram of apples per year with 3 workers. The marginal product of the third
worker is:
100 kilogram.
300 kilogram.
400 kilogram.
500 kilogram.
If inputs used in the production of wheat are increased by 30 percent and wheat
production increases by 40 percent, then there must be:
Increasing returns to factor.
Constant returns to scale.
Increasing returns to scale.
Decreasing returns to scale.
Microeconomics is the branch of economics that deals with which of the following?
Individual consumers
Individual firms and investors
Unemployment and interest rates
Individual consumers and individual firms and investors

Young minister for agriculture, has updated in a talk show that rise in
food prices is due to the rising oil prices. Which category his statement falls in?
Normative
Positive
Negative
None of the given options
Our economy is characterized by:
Unlimited wants and needs.
Unlimited material resources.
No energy resources.
Abundant productive labor.
Ahmad spends all of his money on food and clothes. What would happen to
Ahmad’s budget line if his income increased by 20 percent holding prices constant?
It would shift inward.
It would shift outward.
It would rotate about the axis for food.
It would rotate about the axis for clothes.
--------------- is the rate at which a firm can substitute capital for labor and hold
output constant.
Diminishing marginal returns
Marginal rate of substitution
Marginal rate of production
Marginal rate of technical substitution
Accounts office of Z&X corporations has paid Rs 250000 on account of profit in the
month of August 2011. Which of the following the Accounts Office has paid for?
Labor
Capital
Land
EntrepreneurshipSultan is running a logistics business and provides logistics services to the local
business community. For parking trucks he has hired an open plot in the mid of the
city. For his company, the open plot falls in the category of _________.
Labor
Capital
Land
Entrepreneurship

Question # 1 of 10 ( Start time: 12:22:29 AM )  Total Marks: 1

--------------- is the rate at which a firm can substitute capital for labor and hold output constant.

Select correct option:

Diminishing marginal returns

Marginal rate of substitution

Marginal rate of production

Marginal rate of technical substitution

Question # 2 of 10 ( Start time: 12:23:48 AM )  Total Marks: 1

An increase in the total output of a country over time is called:

Select correct option:

Inflation

Economic growth

Economic development

Unemployment

farm can produce 100 kilogram of apples per year with 2 workers and 400 kilogram of apples per year with 3 workers. The marginal product of the third worker is:

Select correct option:

100 kilogram.

300 kilogram.

400 kilogram.

500 kilogram.

Question # 4 of 10 ( Start time: 12:26:12 AM )  Total Marks: 1

According to the Real Business Cycles (RBC) School, fluctuations in output occur because of:

Select correct option:

Change in price level.

Change in technology.

Change in aggregate demand.

Unanticipated change in demand management policies.

Question # 5 of 10 ( Start time: 12:27:40 AM )  Total Marks: 1

Suppose the consumption function is C = 200 + 0.6 Yd. What is marginal propensity to consume?

Select correct option:

6

60

0.6

600

Question # 6 of 10 ( Start time: 12:29:08 AM )  Total Marks: 1

A risk neutral person always has ___________ marginal utility of income.

Select correct option:

Diminishing

Increasing

Undefined

Constant

Question # 7 of 10 ( Start time: 12:30:38 AM )  Total Marks: 1

ABC Company is running a business of car manufacturing and finds sharp increase in prices of spare parts which in turn increases cost of manufacturing cars. This increase in cost of production will:

Select correct option:

Shift demand curve for cars to the right.

Shift demand curve for cars to the left.

Shift supply curve for cars to the left.

Bring no change in demand or supply curves for cars.

Question # 8 of 10 ( Start time: 12:32:05 AM )  Total Marks: 1

The saving function is:

Select correct option:

The level of planned saving for every change in disposable income.

The level of planned saving at different levels of disposable income.

The ratio of total saving to total disposable income.

The ratio of a change in planned saving to a change in disposable income.

Question # 9 of 10 ( Start time: 12:33:31 AM )  Total Marks: 1

Suppose supply of agricultural products is price inelastic and government decides to increase taxes on agricultural products. More of the tax burden in this case would fall on:

Select correct option:

Producers.

Consumers.

Government.

Both producers and consumers.

Question # 10 of 10 ( Start time: 12:35:00 AM )  Total Marks: 1

If marginal product is below average product:

Select correct option:

The total product will fall

The average product will fall

Average variable costs will fall

Total revenue will fall

Question # 1 of 10 ( Start time: 12:22:29 AM ) Total Marks: 1
————— is the rate at which a firm can substitute capital for labor and hold output constant.
Select correct option:

Diminishing marginal returns
Marginal rate of substitution
Marginal rate of production
Marginal rate of technical substitution

Question # 2 of 10 ( Start time: 12:23:48 AM ) Total Marks: 1
An increase in the total output of a country over time is called:
Select correct option:

Inflation
Economic growth
Economic development
Unemployment

farm can produce 100 kilogram of apples per year with 2 workers and 400 kilogram of apples per year with 3 workers. The marginal product of the third worker is:
Select correct option:

100 kilogram.
300 kilogram.
400 kilogram.
500 kilogram.

Question # 4 of 10 ( Start time: 12:26:12 AM ) Total Marks: 1
According to the Real Business Cycles (RBC) School, fluctuations in output occur because of:
Select correct option:

Change in price level.
Change in technology.
Change in aggregate demand.
Unanticipated change in demand management policies.

Question # 5 of 10 ( Start time: 12:27:40 AM ) Total Marks: 1
Suppose the consumption function is C = 200 + 0.6 Yd. What is marginal propensity to consume?
Select correct option:

6
60
0.6
600

Question # 6 of 10 ( Start time: 12:29:08 AM ) Total Marks: 1
A risk neutral person always has ___________ marginal utility of income.
Select correct option:

Diminishing
Increasing
Undefined
Constant

Question # 7 of 10 ( Start time: 12:30:38 AM ) Total Marks: 1
ABC Company is running a business of car manufacturing and finds sharp increase in prices of spare parts which in turn increases cost of manufacturing cars. This increase in cost of production will:
Select correct option:

Shift demand curve for cars to the right.
Shift demand curve for cars to the left.
Shift supply curve for cars to the left.
Bring no change in demand or supply curves for cars.

Question # 8 of 10 ( Start time: 12:32:05 AM ) Total Marks: 1
The saving function is:
Select correct option:

The level of planned saving for every change in disposable income.
The level of planned saving at different levels of disposable income.
The ratio of total saving to total disposable income.
The ratio of a change in planned saving to a change in disposable income.

Question # 9 of 10 ( Start time: 12:33:31 AM ) Total Marks: 1
Suppose supply of agricultural products is price inelastic and government decides to increase taxes on agricultural products. More of the tax burden in this case would fall on:
Select correct option:

Producers.
Consumers.
Government.
Both producers and consumers.

Question # 10 of 10 ( Start time: 12:35:00 AM ) Total Marks: 1
If marginal product is below average product:
Select correct option:

The total product will fall
The average product will fall
Average variable costs will fall
Total revenue will fall

best of luck to all of you

Thanks sumaira

larkon man tuo itni himat nai ka wo share kr dain

thanks , highly appriciated your co-operation :)

thanks sumaira,

sumaira shabbir  thanks for sharing

did you appear to quiz yet or not? some question solutions posted by Miss SS are beyond chapter 1-8 (to my little knowledge)

welcom u all

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