Download UOC (University of Calicut) BA Economics Micro Economics BA Economics 2019 admn (Important Questions) Question Bank
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
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Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
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Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
Micro Economics Page 3
15. As per indifference curve analysis consumer equilibrium is attained when
(a) Slope of indifference curve is constant
(b) Slopes of both indifference curve and income price line are equal
(c) Slopes of both indifference curve and income price line are opposite
(d) Both income price line and indifference curve are parallel.
16. The slope of a budget line is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
17. At the point of tangency the slope of indifference curve is
(a) Differ from point to point
(b) Is equal on the other side of the mid point
(c) Is the same
(d) Is increasing
18. The slope of a budget line throughout its length is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
19. The income effect for a commodity is
(a) Is always positive(b) Is always negative
(c) Depends upon price effect(d) Determines the nature of the commodity
20. The substitution effect for a commodity is
(a) Is always positive
(b) Depends upon the nature of the commodity
(c) Depends upon price effect
(d) Sometimes negative and sometimes positive
21. Price effect is
(a) Income effect ? substitution effect
(b) Substitution effect ? income effect
(c) Income effect + substitution effect
(d) Income effect + substitution effect- negative effects
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Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
Micro Economics Page 3
15. As per indifference curve analysis consumer equilibrium is attained when
(a) Slope of indifference curve is constant
(b) Slopes of both indifference curve and income price line are equal
(c) Slopes of both indifference curve and income price line are opposite
(d) Both income price line and indifference curve are parallel.
16. The slope of a budget line is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
17. At the point of tangency the slope of indifference curve is
(a) Differ from point to point
(b) Is equal on the other side of the mid point
(c) Is the same
(d) Is increasing
18. The slope of a budget line throughout its length is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
19. The income effect for a commodity is
(a) Is always positive(b) Is always negative
(c) Depends upon price effect(d) Determines the nature of the commodity
20. The substitution effect for a commodity is
(a) Is always positive
(b) Depends upon the nature of the commodity
(c) Depends upon price effect
(d) Sometimes negative and sometimes positive
21. Price effect is
(a) Income effect ? substitution effect
(b) Substitution effect ? income effect
(c) Income effect + substitution effect
(d) Income effect + substitution effect- negative effects
Micro Economics Page 4
22. For a giffen good, when price falls
(a) Demand increases at a faster rate(b) Demand decreases
(c) Demand remains constant(d) Demand curve has a negative slope
23.Inferior goods are the goods with
(a) Falling Income effect(b) Rising Income effect
(c) Negative income effect(d) Positive Marshallian effects
24. Indifference curves are
(a) Always parallel(b) May be parallel
(c) May not be parallel(d) Both b and c
25. Revealed preference theory assumes
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
26. Hicks Allen indifference theory is based on
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
27. Income consumption curve of an inferior commodity is
(a) Positively sloped(b) Backward bending
(c) Downward slopping straight line(d) Showing constant income effect
28. In case of a convex indifference curve
(a) MRS xy is constant(b) MRS xy is increasing
(c) MRS xy is negligible(d) MRS xy is diminishing
29. ?Higher the indifference curve higher will be level of satisfaction?. The
statement is
(a) Always true(b) Always false
(c) Sometimes true and sometimes false(d) True only if price effect is positive
30. As per indifference curve analysis, consumer always try to reach
(a) Higher indifference(b) Lower indifference curve
(c) Middle indifference curve(d) Lower income price line
31. Which method is used by Hicks to eliminate the income effect when price of a
product is changed
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
FirstRanker.com - FirstRanker's Choice
Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
Micro Economics Page 3
15. As per indifference curve analysis consumer equilibrium is attained when
(a) Slope of indifference curve is constant
(b) Slopes of both indifference curve and income price line are equal
(c) Slopes of both indifference curve and income price line are opposite
(d) Both income price line and indifference curve are parallel.
16. The slope of a budget line is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
17. At the point of tangency the slope of indifference curve is
(a) Differ from point to point
(b) Is equal on the other side of the mid point
(c) Is the same
(d) Is increasing
18. The slope of a budget line throughout its length is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
19. The income effect for a commodity is
(a) Is always positive(b) Is always negative
(c) Depends upon price effect(d) Determines the nature of the commodity
20. The substitution effect for a commodity is
(a) Is always positive
(b) Depends upon the nature of the commodity
(c) Depends upon price effect
(d) Sometimes negative and sometimes positive
21. Price effect is
(a) Income effect ? substitution effect
(b) Substitution effect ? income effect
(c) Income effect + substitution effect
(d) Income effect + substitution effect- negative effects
Micro Economics Page 4
22. For a giffen good, when price falls
(a) Demand increases at a faster rate(b) Demand decreases
(c) Demand remains constant(d) Demand curve has a negative slope
23.Inferior goods are the goods with
(a) Falling Income effect(b) Rising Income effect
(c) Negative income effect(d) Positive Marshallian effects
24. Indifference curves are
(a) Always parallel(b) May be parallel
(c) May not be parallel(d) Both b and c
25. Revealed preference theory assumes
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
26. Hicks Allen indifference theory is based on
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
27. Income consumption curve of an inferior commodity is
(a) Positively sloped(b) Backward bending
(c) Downward slopping straight line(d) Showing constant income effect
28. In case of a convex indifference curve
(a) MRS xy is constant(b) MRS xy is increasing
(c) MRS xy is negligible(d) MRS xy is diminishing
29. ?Higher the indifference curve higher will be level of satisfaction?. The
statement is
(a) Always true(b) Always false
(c) Sometimes true and sometimes false(d) True only if price effect is positive
30. As per indifference curve analysis, consumer always try to reach
(a) Higher indifference(b) Lower indifference curve
(c) Middle indifference curve(d) Lower income price line
31. Which method is used by Hicks to eliminate the income effect when price of a
product is changed
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
Micro Economics Page 5
32. The basic doctrine of consumers? surplus is based on
(a) Indifference curve analysis(b) Revealed preference theory
(c) Law of substitution(d) Law of diminishing marginal utility
33. According to Marshall, The law of diminishing marginal utility
(a) Applies on money in the manner in which it applies on commodity
(b) Do not applies on money except bank money
(c) Does not applies on bank money but applies on cash
(d) Applies on all commodities except money
34. An indifference curve represent
(a) Four commodities(b) Less than two commodities
(c) Only two commodities(d) Only one commodity
35. Indifference curve is always
(a) Concave to the origin(b) Convex to the origin
(c) L shaped(d) A straight line
36. Engel curve for giffen good is
(a) Positively sloped(b) Negatively sloped
(c) Horizontal straight line(d) Vertical straight line
37. Marginal utility is
(a) Always zero(b) Increases at a diminishing rate
(c) The utility derived from last unit(d) All the above
38. Total utility is
(a) The sum total of marginal utilities
(b) Entire utility derived from whole consumption
(c) Increases at a diminishing rate
(d) All the above
39. When Total utility is increasing at an decreasing rate, marginal utility is
(a) Constant(b) Negative
(c) Increasing(d) Decreasing
40. Other things being equal a decrease in demand can be caused by
(a) A fall in price of the commodity(b) A fall in income of the consumer
(c) A rise in price of the substitute(d) None of these
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Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
Micro Economics Page 3
15. As per indifference curve analysis consumer equilibrium is attained when
(a) Slope of indifference curve is constant
(b) Slopes of both indifference curve and income price line are equal
(c) Slopes of both indifference curve and income price line are opposite
(d) Both income price line and indifference curve are parallel.
16. The slope of a budget line is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
17. At the point of tangency the slope of indifference curve is
(a) Differ from point to point
(b) Is equal on the other side of the mid point
(c) Is the same
(d) Is increasing
18. The slope of a budget line throughout its length is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
19. The income effect for a commodity is
(a) Is always positive(b) Is always negative
(c) Depends upon price effect(d) Determines the nature of the commodity
20. The substitution effect for a commodity is
(a) Is always positive
(b) Depends upon the nature of the commodity
(c) Depends upon price effect
(d) Sometimes negative and sometimes positive
21. Price effect is
(a) Income effect ? substitution effect
(b) Substitution effect ? income effect
(c) Income effect + substitution effect
(d) Income effect + substitution effect- negative effects
Micro Economics Page 4
22. For a giffen good, when price falls
(a) Demand increases at a faster rate(b) Demand decreases
(c) Demand remains constant(d) Demand curve has a negative slope
23.Inferior goods are the goods with
(a) Falling Income effect(b) Rising Income effect
(c) Negative income effect(d) Positive Marshallian effects
24. Indifference curves are
(a) Always parallel(b) May be parallel
(c) May not be parallel(d) Both b and c
25. Revealed preference theory assumes
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
26. Hicks Allen indifference theory is based on
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
27. Income consumption curve of an inferior commodity is
(a) Positively sloped(b) Backward bending
(c) Downward slopping straight line(d) Showing constant income effect
28. In case of a convex indifference curve
(a) MRS xy is constant(b) MRS xy is increasing
(c) MRS xy is negligible(d) MRS xy is diminishing
29. ?Higher the indifference curve higher will be level of satisfaction?. The
statement is
(a) Always true(b) Always false
(c) Sometimes true and sometimes false(d) True only if price effect is positive
30. As per indifference curve analysis, consumer always try to reach
(a) Higher indifference(b) Lower indifference curve
(c) Middle indifference curve(d) Lower income price line
31. Which method is used by Hicks to eliminate the income effect when price of a
product is changed
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
Micro Economics Page 5
32. The basic doctrine of consumers? surplus is based on
(a) Indifference curve analysis(b) Revealed preference theory
(c) Law of substitution(d) Law of diminishing marginal utility
33. According to Marshall, The law of diminishing marginal utility
(a) Applies on money in the manner in which it applies on commodity
(b) Do not applies on money except bank money
(c) Does not applies on bank money but applies on cash
(d) Applies on all commodities except money
34. An indifference curve represent
(a) Four commodities(b) Less than two commodities
(c) Only two commodities(d) Only one commodity
35. Indifference curve is always
(a) Concave to the origin(b) Convex to the origin
(c) L shaped(d) A straight line
36. Engel curve for giffen good is
(a) Positively sloped(b) Negatively sloped
(c) Horizontal straight line(d) Vertical straight line
37. Marginal utility is
(a) Always zero(b) Increases at a diminishing rate
(c) The utility derived from last unit(d) All the above
38. Total utility is
(a) The sum total of marginal utilities
(b) Entire utility derived from whole consumption
(c) Increases at a diminishing rate
(d) All the above
39. When Total utility is increasing at an decreasing rate, marginal utility is
(a) Constant(b) Negative
(c) Increasing(d) Decreasing
40. Other things being equal a decrease in demand can be caused by
(a) A fall in price of the commodity(b) A fall in income of the consumer
(c) A rise in price of the substitute(d) None of these
Micro Economics Page 6
41. When price of a product falls, more of it is purchased because of
(a) The substitution effect
(b) The income effect
(c) Neither substitution effect nor income effect
(d) Both the substitution and income effects
42. ?Utility or satisfaction is a subjective concept; therefore it could only be
ranked?. The statement supports
(a) Cardinal utility theorist(b) Ordinal utility theorist
(c) Behavioral theorist of the firm(d) None of the above
43. Ordinal utility analysis is otherwise known as
(a) Gossens second law(b) Cardinality approach
(c) Indifference curve analysis(d) Rationality approach
44. Ordinal utility analysis Was developed by
(a) J.R.Hicks & R.J.D. Allen(b) Samualson
(c) Marshall and Jevons(d) Slutsky
45. Total utility curve
(a) Always rises(b) First falls then rises
(c) Always falls(d) First rises and then falls after reaching its maximum
46. At saturation point MU of a commodity is
(a) Positive(b) Negative
(c) Zero(d) Increasing
47. A consumer reaches equilibrium when
(a) Marginal utility is equal to price(b) Marginal utility greater than price
(c) Marginal utility less than price(d) Total utility is equal to price
48. Marshalian cardinal utility analysis assumes
(a) Marginal utility of money is zero
(b) Marginal utility of money is decreasing
(c) Marginal utility of money is increasing
(d) Marginal utility of money is constant
49. When individuals income rises (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
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Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
Micro Economics Page 3
15. As per indifference curve analysis consumer equilibrium is attained when
(a) Slope of indifference curve is constant
(b) Slopes of both indifference curve and income price line are equal
(c) Slopes of both indifference curve and income price line are opposite
(d) Both income price line and indifference curve are parallel.
16. The slope of a budget line is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
17. At the point of tangency the slope of indifference curve is
(a) Differ from point to point
(b) Is equal on the other side of the mid point
(c) Is the same
(d) Is increasing
18. The slope of a budget line throughout its length is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
19. The income effect for a commodity is
(a) Is always positive(b) Is always negative
(c) Depends upon price effect(d) Determines the nature of the commodity
20. The substitution effect for a commodity is
(a) Is always positive
(b) Depends upon the nature of the commodity
(c) Depends upon price effect
(d) Sometimes negative and sometimes positive
21. Price effect is
(a) Income effect ? substitution effect
(b) Substitution effect ? income effect
(c) Income effect + substitution effect
(d) Income effect + substitution effect- negative effects
Micro Economics Page 4
22. For a giffen good, when price falls
(a) Demand increases at a faster rate(b) Demand decreases
(c) Demand remains constant(d) Demand curve has a negative slope
23.Inferior goods are the goods with
(a) Falling Income effect(b) Rising Income effect
(c) Negative income effect(d) Positive Marshallian effects
24. Indifference curves are
(a) Always parallel(b) May be parallel
(c) May not be parallel(d) Both b and c
25. Revealed preference theory assumes
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
26. Hicks Allen indifference theory is based on
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
27. Income consumption curve of an inferior commodity is
(a) Positively sloped(b) Backward bending
(c) Downward slopping straight line(d) Showing constant income effect
28. In case of a convex indifference curve
(a) MRS xy is constant(b) MRS xy is increasing
(c) MRS xy is negligible(d) MRS xy is diminishing
29. ?Higher the indifference curve higher will be level of satisfaction?. The
statement is
(a) Always true(b) Always false
(c) Sometimes true and sometimes false(d) True only if price effect is positive
30. As per indifference curve analysis, consumer always try to reach
(a) Higher indifference(b) Lower indifference curve
(c) Middle indifference curve(d) Lower income price line
31. Which method is used by Hicks to eliminate the income effect when price of a
product is changed
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
Micro Economics Page 5
32. The basic doctrine of consumers? surplus is based on
(a) Indifference curve analysis(b) Revealed preference theory
(c) Law of substitution(d) Law of diminishing marginal utility
33. According to Marshall, The law of diminishing marginal utility
(a) Applies on money in the manner in which it applies on commodity
(b) Do not applies on money except bank money
(c) Does not applies on bank money but applies on cash
(d) Applies on all commodities except money
34. An indifference curve represent
(a) Four commodities(b) Less than two commodities
(c) Only two commodities(d) Only one commodity
35. Indifference curve is always
(a) Concave to the origin(b) Convex to the origin
(c) L shaped(d) A straight line
36. Engel curve for giffen good is
(a) Positively sloped(b) Negatively sloped
(c) Horizontal straight line(d) Vertical straight line
37. Marginal utility is
(a) Always zero(b) Increases at a diminishing rate
(c) The utility derived from last unit(d) All the above
38. Total utility is
(a) The sum total of marginal utilities
(b) Entire utility derived from whole consumption
(c) Increases at a diminishing rate
(d) All the above
39. When Total utility is increasing at an decreasing rate, marginal utility is
(a) Constant(b) Negative
(c) Increasing(d) Decreasing
40. Other things being equal a decrease in demand can be caused by
(a) A fall in price of the commodity(b) A fall in income of the consumer
(c) A rise in price of the substitute(d) None of these
Micro Economics Page 6
41. When price of a product falls, more of it is purchased because of
(a) The substitution effect
(b) The income effect
(c) Neither substitution effect nor income effect
(d) Both the substitution and income effects
42. ?Utility or satisfaction is a subjective concept; therefore it could only be
ranked?. The statement supports
(a) Cardinal utility theorist(b) Ordinal utility theorist
(c) Behavioral theorist of the firm(d) None of the above
43. Ordinal utility analysis is otherwise known as
(a) Gossens second law(b) Cardinality approach
(c) Indifference curve analysis(d) Rationality approach
44. Ordinal utility analysis Was developed by
(a) J.R.Hicks & R.J.D. Allen(b) Samualson
(c) Marshall and Jevons(d) Slutsky
45. Total utility curve
(a) Always rises(b) First falls then rises
(c) Always falls(d) First rises and then falls after reaching its maximum
46. At saturation point MU of a commodity is
(a) Positive(b) Negative
(c) Zero(d) Increasing
47. A consumer reaches equilibrium when
(a) Marginal utility is equal to price(b) Marginal utility greater than price
(c) Marginal utility less than price(d) Total utility is equal to price
48. Marshalian cardinal utility analysis assumes
(a) Marginal utility of money is zero
(b) Marginal utility of money is decreasing
(c) Marginal utility of money is increasing
(d) Marginal utility of money is constant
49. When individuals income rises (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
Micro Economics Page 7
50. When individuals income falls (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
51. The concept of utility was introduced by
(a) Marshall(b) Hicks and allen
(c) Geremy Bentham(d) Gossen
52. Cardinal utility analysis to consumer equilibrium was developed by
(a) Marshall(b) Hicks and Allen
(c) Geremy Bentham(d) Gossen
53. MC at any level of output is given by
(a) Slope of TC curve(b) Slope of TVC curve
(c) Slope of either TC or TVC(d) Slope of TFC
54. If a firm?s average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which
one among the following is the marginal cost of producing the 7
th
unit
(a) 46(b) 2
(c) 36(d)42
55. The cost that cannot be recovered once spent
(a) Accounting cost(b) Fixed cost
(c) Implicit cost(d) Sunk cost
56. The saucer-type of modern Short run Average Variable Cost (SAVC) represents
(a) Excess capacity(b) Managerial costs
(c) Load factors(d) Reserve capacity
57. The Long run Average Cost curve (LAC) in modern cost theory is
roughly
(a) U shaped(b) Saucer shaped
(c) L shaped(d) Rectangular hyperbola
58. Under increasing returns to scale, which of the following is the nature of the
long run average cost curve?
(a) Downward sloping
(b) Upward rising
(c) Parallel to output axis
(d) Identical to short run average cost curve
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Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
Micro Economics Page 3
15. As per indifference curve analysis consumer equilibrium is attained when
(a) Slope of indifference curve is constant
(b) Slopes of both indifference curve and income price line are equal
(c) Slopes of both indifference curve and income price line are opposite
(d) Both income price line and indifference curve are parallel.
16. The slope of a budget line is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
17. At the point of tangency the slope of indifference curve is
(a) Differ from point to point
(b) Is equal on the other side of the mid point
(c) Is the same
(d) Is increasing
18. The slope of a budget line throughout its length is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
19. The income effect for a commodity is
(a) Is always positive(b) Is always negative
(c) Depends upon price effect(d) Determines the nature of the commodity
20. The substitution effect for a commodity is
(a) Is always positive
(b) Depends upon the nature of the commodity
(c) Depends upon price effect
(d) Sometimes negative and sometimes positive
21. Price effect is
(a) Income effect ? substitution effect
(b) Substitution effect ? income effect
(c) Income effect + substitution effect
(d) Income effect + substitution effect- negative effects
Micro Economics Page 4
22. For a giffen good, when price falls
(a) Demand increases at a faster rate(b) Demand decreases
(c) Demand remains constant(d) Demand curve has a negative slope
23.Inferior goods are the goods with
(a) Falling Income effect(b) Rising Income effect
(c) Negative income effect(d) Positive Marshallian effects
24. Indifference curves are
(a) Always parallel(b) May be parallel
(c) May not be parallel(d) Both b and c
25. Revealed preference theory assumes
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
26. Hicks Allen indifference theory is based on
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
27. Income consumption curve of an inferior commodity is
(a) Positively sloped(b) Backward bending
(c) Downward slopping straight line(d) Showing constant income effect
28. In case of a convex indifference curve
(a) MRS xy is constant(b) MRS xy is increasing
(c) MRS xy is negligible(d) MRS xy is diminishing
29. ?Higher the indifference curve higher will be level of satisfaction?. The
statement is
(a) Always true(b) Always false
(c) Sometimes true and sometimes false(d) True only if price effect is positive
30. As per indifference curve analysis, consumer always try to reach
(a) Higher indifference(b) Lower indifference curve
(c) Middle indifference curve(d) Lower income price line
31. Which method is used by Hicks to eliminate the income effect when price of a
product is changed
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
Micro Economics Page 5
32. The basic doctrine of consumers? surplus is based on
(a) Indifference curve analysis(b) Revealed preference theory
(c) Law of substitution(d) Law of diminishing marginal utility
33. According to Marshall, The law of diminishing marginal utility
(a) Applies on money in the manner in which it applies on commodity
(b) Do not applies on money except bank money
(c) Does not applies on bank money but applies on cash
(d) Applies on all commodities except money
34. An indifference curve represent
(a) Four commodities(b) Less than two commodities
(c) Only two commodities(d) Only one commodity
35. Indifference curve is always
(a) Concave to the origin(b) Convex to the origin
(c) L shaped(d) A straight line
36. Engel curve for giffen good is
(a) Positively sloped(b) Negatively sloped
(c) Horizontal straight line(d) Vertical straight line
37. Marginal utility is
(a) Always zero(b) Increases at a diminishing rate
(c) The utility derived from last unit(d) All the above
38. Total utility is
(a) The sum total of marginal utilities
(b) Entire utility derived from whole consumption
(c) Increases at a diminishing rate
(d) All the above
39. When Total utility is increasing at an decreasing rate, marginal utility is
(a) Constant(b) Negative
(c) Increasing(d) Decreasing
40. Other things being equal a decrease in demand can be caused by
(a) A fall in price of the commodity(b) A fall in income of the consumer
(c) A rise in price of the substitute(d) None of these
Micro Economics Page 6
41. When price of a product falls, more of it is purchased because of
(a) The substitution effect
(b) The income effect
(c) Neither substitution effect nor income effect
(d) Both the substitution and income effects
42. ?Utility or satisfaction is a subjective concept; therefore it could only be
ranked?. The statement supports
(a) Cardinal utility theorist(b) Ordinal utility theorist
(c) Behavioral theorist of the firm(d) None of the above
43. Ordinal utility analysis is otherwise known as
(a) Gossens second law(b) Cardinality approach
(c) Indifference curve analysis(d) Rationality approach
44. Ordinal utility analysis Was developed by
(a) J.R.Hicks & R.J.D. Allen(b) Samualson
(c) Marshall and Jevons(d) Slutsky
45. Total utility curve
(a) Always rises(b) First falls then rises
(c) Always falls(d) First rises and then falls after reaching its maximum
46. At saturation point MU of a commodity is
(a) Positive(b) Negative
(c) Zero(d) Increasing
47. A consumer reaches equilibrium when
(a) Marginal utility is equal to price(b) Marginal utility greater than price
(c) Marginal utility less than price(d) Total utility is equal to price
48. Marshalian cardinal utility analysis assumes
(a) Marginal utility of money is zero
(b) Marginal utility of money is decreasing
(c) Marginal utility of money is increasing
(d) Marginal utility of money is constant
49. When individuals income rises (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
Micro Economics Page 7
50. When individuals income falls (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
51. The concept of utility was introduced by
(a) Marshall(b) Hicks and allen
(c) Geremy Bentham(d) Gossen
52. Cardinal utility analysis to consumer equilibrium was developed by
(a) Marshall(b) Hicks and Allen
(c) Geremy Bentham(d) Gossen
53. MC at any level of output is given by
(a) Slope of TC curve(b) Slope of TVC curve
(c) Slope of either TC or TVC(d) Slope of TFC
54. If a firm?s average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which
one among the following is the marginal cost of producing the 7
th
unit
(a) 46(b) 2
(c) 36(d)42
55. The cost that cannot be recovered once spent
(a) Accounting cost(b) Fixed cost
(c) Implicit cost(d) Sunk cost
56. The saucer-type of modern Short run Average Variable Cost (SAVC) represents
(a) Excess capacity(b) Managerial costs
(c) Load factors(d) Reserve capacity
57. The Long run Average Cost curve (LAC) in modern cost theory is
roughly
(a) U shaped(b) Saucer shaped
(c) L shaped(d) Rectangular hyperbola
58. Under increasing returns to scale, which of the following is the nature of the
long run average cost curve?
(a) Downward sloping
(b) Upward rising
(c) Parallel to output axis
(d) Identical to short run average cost curve
Micro Economics Page 8
59. Which of the following has a U shape?
(a) Average fixed cost curve(b) Total cost curve
(c) Average variable cost curve(d) Total variable cost curve
60. AFC curve will always be
(a) Rectangular hyperbola(b) U shaped
(c) Horizontal(d) Downward sloping
61. Implicit cost of a factor of production is determined by its
(a) Sunk cost(b) Variable cost
(c) Fixed cost(d) Opportunity cost
62. Economic cost include both
(a) Explicit cost and implicit cost(b) Fixed cost and variable cost
(c) Explicit cost and prime cost(d) Money cost and sunk cost
63. The U shape of MC curve reflects
(a) Economies of scale(b) Law of increasing returns
(c) Reserve capacity(d) Law of variable proportion
64. Envelope curve is
(a) Long run marginal cost curve(b) Long run average cost curve
(c) Total cost curve(d) None of the above
65. In long run, which factor of production is fixed?
(a) Labour(b) Capital
(c)Building(d) None of the above
66. The U shape of the average total cost curve reflects
(a) LDMU(b) The Law of Variable Proportions
(c) Consumer?s Surplus(d) Reserve capacity
67. The total fixed cost is a
(a) Horizontal straight line(b) Vertical
(c) Hyperbola(d) U shaped
68. When AC minimum in short run
(a) AC < MC(b) AC > MC
(c) AC = MC(d) Any of above is possible
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Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
Micro Economics Page 3
15. As per indifference curve analysis consumer equilibrium is attained when
(a) Slope of indifference curve is constant
(b) Slopes of both indifference curve and income price line are equal
(c) Slopes of both indifference curve and income price line are opposite
(d) Both income price line and indifference curve are parallel.
16. The slope of a budget line is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
17. At the point of tangency the slope of indifference curve is
(a) Differ from point to point
(b) Is equal on the other side of the mid point
(c) Is the same
(d) Is increasing
18. The slope of a budget line throughout its length is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
19. The income effect for a commodity is
(a) Is always positive(b) Is always negative
(c) Depends upon price effect(d) Determines the nature of the commodity
20. The substitution effect for a commodity is
(a) Is always positive
(b) Depends upon the nature of the commodity
(c) Depends upon price effect
(d) Sometimes negative and sometimes positive
21. Price effect is
(a) Income effect ? substitution effect
(b) Substitution effect ? income effect
(c) Income effect + substitution effect
(d) Income effect + substitution effect- negative effects
Micro Economics Page 4
22. For a giffen good, when price falls
(a) Demand increases at a faster rate(b) Demand decreases
(c) Demand remains constant(d) Demand curve has a negative slope
23.Inferior goods are the goods with
(a) Falling Income effect(b) Rising Income effect
(c) Negative income effect(d) Positive Marshallian effects
24. Indifference curves are
(a) Always parallel(b) May be parallel
(c) May not be parallel(d) Both b and c
25. Revealed preference theory assumes
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
26. Hicks Allen indifference theory is based on
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
27. Income consumption curve of an inferior commodity is
(a) Positively sloped(b) Backward bending
(c) Downward slopping straight line(d) Showing constant income effect
28. In case of a convex indifference curve
(a) MRS xy is constant(b) MRS xy is increasing
(c) MRS xy is negligible(d) MRS xy is diminishing
29. ?Higher the indifference curve higher will be level of satisfaction?. The
statement is
(a) Always true(b) Always false
(c) Sometimes true and sometimes false(d) True only if price effect is positive
30. As per indifference curve analysis, consumer always try to reach
(a) Higher indifference(b) Lower indifference curve
(c) Middle indifference curve(d) Lower income price line
31. Which method is used by Hicks to eliminate the income effect when price of a
product is changed
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
Micro Economics Page 5
32. The basic doctrine of consumers? surplus is based on
(a) Indifference curve analysis(b) Revealed preference theory
(c) Law of substitution(d) Law of diminishing marginal utility
33. According to Marshall, The law of diminishing marginal utility
(a) Applies on money in the manner in which it applies on commodity
(b) Do not applies on money except bank money
(c) Does not applies on bank money but applies on cash
(d) Applies on all commodities except money
34. An indifference curve represent
(a) Four commodities(b) Less than two commodities
(c) Only two commodities(d) Only one commodity
35. Indifference curve is always
(a) Concave to the origin(b) Convex to the origin
(c) L shaped(d) A straight line
36. Engel curve for giffen good is
(a) Positively sloped(b) Negatively sloped
(c) Horizontal straight line(d) Vertical straight line
37. Marginal utility is
(a) Always zero(b) Increases at a diminishing rate
(c) The utility derived from last unit(d) All the above
38. Total utility is
(a) The sum total of marginal utilities
(b) Entire utility derived from whole consumption
(c) Increases at a diminishing rate
(d) All the above
39. When Total utility is increasing at an decreasing rate, marginal utility is
(a) Constant(b) Negative
(c) Increasing(d) Decreasing
40. Other things being equal a decrease in demand can be caused by
(a) A fall in price of the commodity(b) A fall in income of the consumer
(c) A rise in price of the substitute(d) None of these
Micro Economics Page 6
41. When price of a product falls, more of it is purchased because of
(a) The substitution effect
(b) The income effect
(c) Neither substitution effect nor income effect
(d) Both the substitution and income effects
42. ?Utility or satisfaction is a subjective concept; therefore it could only be
ranked?. The statement supports
(a) Cardinal utility theorist(b) Ordinal utility theorist
(c) Behavioral theorist of the firm(d) None of the above
43. Ordinal utility analysis is otherwise known as
(a) Gossens second law(b) Cardinality approach
(c) Indifference curve analysis(d) Rationality approach
44. Ordinal utility analysis Was developed by
(a) J.R.Hicks & R.J.D. Allen(b) Samualson
(c) Marshall and Jevons(d) Slutsky
45. Total utility curve
(a) Always rises(b) First falls then rises
(c) Always falls(d) First rises and then falls after reaching its maximum
46. At saturation point MU of a commodity is
(a) Positive(b) Negative
(c) Zero(d) Increasing
47. A consumer reaches equilibrium when
(a) Marginal utility is equal to price(b) Marginal utility greater than price
(c) Marginal utility less than price(d) Total utility is equal to price
48. Marshalian cardinal utility analysis assumes
(a) Marginal utility of money is zero
(b) Marginal utility of money is decreasing
(c) Marginal utility of money is increasing
(d) Marginal utility of money is constant
49. When individuals income rises (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
Micro Economics Page 7
50. When individuals income falls (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
51. The concept of utility was introduced by
(a) Marshall(b) Hicks and allen
(c) Geremy Bentham(d) Gossen
52. Cardinal utility analysis to consumer equilibrium was developed by
(a) Marshall(b) Hicks and Allen
(c) Geremy Bentham(d) Gossen
53. MC at any level of output is given by
(a) Slope of TC curve(b) Slope of TVC curve
(c) Slope of either TC or TVC(d) Slope of TFC
54. If a firm?s average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which
one among the following is the marginal cost of producing the 7
th
unit
(a) 46(b) 2
(c) 36(d)42
55. The cost that cannot be recovered once spent
(a) Accounting cost(b) Fixed cost
(c) Implicit cost(d) Sunk cost
56. The saucer-type of modern Short run Average Variable Cost (SAVC) represents
(a) Excess capacity(b) Managerial costs
(c) Load factors(d) Reserve capacity
57. The Long run Average Cost curve (LAC) in modern cost theory is
roughly
(a) U shaped(b) Saucer shaped
(c) L shaped(d) Rectangular hyperbola
58. Under increasing returns to scale, which of the following is the nature of the
long run average cost curve?
(a) Downward sloping
(b) Upward rising
(c) Parallel to output axis
(d) Identical to short run average cost curve
Micro Economics Page 8
59. Which of the following has a U shape?
(a) Average fixed cost curve(b) Total cost curve
(c) Average variable cost curve(d) Total variable cost curve
60. AFC curve will always be
(a) Rectangular hyperbola(b) U shaped
(c) Horizontal(d) Downward sloping
61. Implicit cost of a factor of production is determined by its
(a) Sunk cost(b) Variable cost
(c) Fixed cost(d) Opportunity cost
62. Economic cost include both
(a) Explicit cost and implicit cost(b) Fixed cost and variable cost
(c) Explicit cost and prime cost(d) Money cost and sunk cost
63. The U shape of MC curve reflects
(a) Economies of scale(b) Law of increasing returns
(c) Reserve capacity(d) Law of variable proportion
64. Envelope curve is
(a) Long run marginal cost curve(b) Long run average cost curve
(c) Total cost curve(d) None of the above
65. In long run, which factor of production is fixed?
(a) Labour(b) Capital
(c)Building(d) None of the above
66. The U shape of the average total cost curve reflects
(a) LDMU(b) The Law of Variable Proportions
(c) Consumer?s Surplus(d) Reserve capacity
67. The total fixed cost is a
(a) Horizontal straight line(b) Vertical
(c) Hyperbola(d) U shaped
68. When AC minimum in short run
(a) AC < MC(b) AC > MC
(c) AC = MC(d) Any of above is possible
Micro Economics Page 9
69. The shape of TVC and TC are
(a) Rectangular hyperbola(b) Inverse ?S? shape
(c) Horizontal straight line(d) L shaped
70. The cost expressed not in terms of money but in terms of efforts of workers
undergone for making the commodity
(a)Opportunity cost(b) Real cost
(c) Sacrifice cost(d) Implicit cost
71. The MC curve cuts the AC curve at
(a) The maximum point(b) The initial Point
(c) The minimum Point(d) Any point
72. The minimum point of ATC is at ...................position of the minimum point of AVC
(a) Right(b) Left
(c) Same(d) All of above can be
73. If the long run cost curve shifts down wards it is an indication of
(a) Technological progress(b) Lower factor prices
(c) Both of these(d) Reserve capacity
74. The U shape of the LAC reflects
(a) Law of Variable proportions(b) Laws of returns to scale
(c) Reserve capacity(d) None of these
75. The responsiveness of quantity demanded of one commodity to the changes in the
price of another commodity is called
(a) Price Elasticity(b) Income Elasticity
(b) Cross Elasticity(c) Point Elasicity
76. The value of price elasticity of demand ranges from
(a) One to zero(b) Zero to infinity
(b) One to infinity(c) All the above
77. A production possibility curve is concave to the point of origin because of
(a) Increasing marginal rate of transformation (MRT)(b) Increasing marginal opportunity cost (MOC)(c) Both of the above
(d) Decreasing marginal rate of transformation
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Micro Economics Page 1
UNIVERSITY OF CALICUT
SCHOOL OF DISTANCE EDUCATION
BA Economics - MICRO ECONOMICS - I
(Core Course ? 2019 admission onwards (CBCSS)) QUESTION BANK
1. Total utility is maximum when
(a) Marginal utility is zero(b) Marginal utility is maximum
(c) Marginal utility increases(d) Average utility is maximum
2. Which of the following is called gossans first law
(a) Law of substitution(b) Law of equi marginal utility
(c) Law of diminishing marginal utility(d) None of the above
3. When individuals income falls (everything remain the same) his demand for
an inferior good
(a) Rises(b) Falls
(c) Remains the same(d) We cannot say without additional information
4. If negative income effect is greater than positive substitution effect : the
product will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
5. Which of the following statement is FALSE with regard to marginal utility
(a) Marginal utility is the utility derived from last unit
(b) As consumption increases Marginal utility goes on diminishing
(c) At saturation point marginal utility is Zero
(d) Marginal utility increases at a diminishing range
6. According to Marshall consumer surplus is:
(a) Total utility ? marginal utility(b) Total utility + Marginal utility
(c) Total utility derived ? Price(d) Price ? Marginal utility
7. If both the products X & Y are normal goods
(a) Slopes down towards right(b) Slopes up towards right
(c) Slopes up towards left(d) Slopes down towards left
Micro Economics Page 2
8. Which of the following statement is TRUE with regard to total utility
(a) Total utility is the utility derived from last unit
(b) Total utility increases at a diminishing range
(c) As consumption increases total utility goes on diminishing
(d) At saturation point total utility is negative
9. If negative income effect is less than positive substitution effect : the product
will be
(a) A normal good(b) An inferior good
(c) A giffen good(d) A complementary good
10. Which of the following statements is true
(a) Hicksian substitution effect is greater than Slutsky substitution effect
(b) Slutsky substitution effect is greater than Hicksian substitution effect
(c) Hicksian substitution effect is same and equal to Slutsky substitution effect
(d) Hicksian substitution effect is the reverse of Slutsky substitution effect
11. According to Hicks substitution effect is
(a) The movement to a higher indifference curve
(b) The movement to a lower indifference curve
(c) The movement along an indifference curve
(d) The movement to a decreased consumption
12. Strong ordering means
(a) Absence of indifference
(b) Presence of indifference
(c) No difference between different combinations
(d) None of the above
13. In the fundamental theorem of consumption and to prove the law of demand,
Samualson uses
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
14. If negative income effect is greater than positive substitution effect : price
effect will be
(a) Zero(b) Negative
(c) Positive(d) Positive and greater than one
Micro Economics Page 3
15. As per indifference curve analysis consumer equilibrium is attained when
(a) Slope of indifference curve is constant
(b) Slopes of both indifference curve and income price line are equal
(c) Slopes of both indifference curve and income price line are opposite
(d) Both income price line and indifference curve are parallel.
16. The slope of a budget line is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
17. At the point of tangency the slope of indifference curve is
(a) Differ from point to point
(b) Is equal on the other side of the mid point
(c) Is the same
(d) Is increasing
18. The slope of a budget line throughout its length is
(a) The satisfaction level of both the commodities
(b) The income level of the consumer
(c) The price ratio of both the commodities under consideration
(d) Price level of a country
19. The income effect for a commodity is
(a) Is always positive(b) Is always negative
(c) Depends upon price effect(d) Determines the nature of the commodity
20. The substitution effect for a commodity is
(a) Is always positive
(b) Depends upon the nature of the commodity
(c) Depends upon price effect
(d) Sometimes negative and sometimes positive
21. Price effect is
(a) Income effect ? substitution effect
(b) Substitution effect ? income effect
(c) Income effect + substitution effect
(d) Income effect + substitution effect- negative effects
Micro Economics Page 4
22. For a giffen good, when price falls
(a) Demand increases at a faster rate(b) Demand decreases
(c) Demand remains constant(d) Demand curve has a negative slope
23.Inferior goods are the goods with
(a) Falling Income effect(b) Rising Income effect
(c) Negative income effect(d) Positive Marshallian effects
24. Indifference curves are
(a) Always parallel(b) May be parallel
(c) May not be parallel(d) Both b and c
25. Revealed preference theory assumes
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
26. Hicks Allen indifference theory is based on
(a) Weak ordering(b) Strong ordering
(c) Constant ordering(d) Multiple ordering
27. Income consumption curve of an inferior commodity is
(a) Positively sloped(b) Backward bending
(c) Downward slopping straight line(d) Showing constant income effect
28. In case of a convex indifference curve
(a) MRS xy is constant(b) MRS xy is increasing
(c) MRS xy is negligible(d) MRS xy is diminishing
29. ?Higher the indifference curve higher will be level of satisfaction?. The
statement is
(a) Always true(b) Always false
(c) Sometimes true and sometimes false(d) True only if price effect is positive
30. As per indifference curve analysis, consumer always try to reach
(a) Higher indifference(b) Lower indifference curve
(c) Middle indifference curve(d) Lower income price line
31. Which method is used by Hicks to eliminate the income effect when price of a
product is changed
(a) Compensating variation in income(b) The cost difference
(c) The over compensation effect(d) Substituting variation in price
Micro Economics Page 5
32. The basic doctrine of consumers? surplus is based on
(a) Indifference curve analysis(b) Revealed preference theory
(c) Law of substitution(d) Law of diminishing marginal utility
33. According to Marshall, The law of diminishing marginal utility
(a) Applies on money in the manner in which it applies on commodity
(b) Do not applies on money except bank money
(c) Does not applies on bank money but applies on cash
(d) Applies on all commodities except money
34. An indifference curve represent
(a) Four commodities(b) Less than two commodities
(c) Only two commodities(d) Only one commodity
35. Indifference curve is always
(a) Concave to the origin(b) Convex to the origin
(c) L shaped(d) A straight line
36. Engel curve for giffen good is
(a) Positively sloped(b) Negatively sloped
(c) Horizontal straight line(d) Vertical straight line
37. Marginal utility is
(a) Always zero(b) Increases at a diminishing rate
(c) The utility derived from last unit(d) All the above
38. Total utility is
(a) The sum total of marginal utilities
(b) Entire utility derived from whole consumption
(c) Increases at a diminishing rate
(d) All the above
39. When Total utility is increasing at an decreasing rate, marginal utility is
(a) Constant(b) Negative
(c) Increasing(d) Decreasing
40. Other things being equal a decrease in demand can be caused by
(a) A fall in price of the commodity(b) A fall in income of the consumer
(c) A rise in price of the substitute(d) None of these
Micro Economics Page 6
41. When price of a product falls, more of it is purchased because of
(a) The substitution effect
(b) The income effect
(c) Neither substitution effect nor income effect
(d) Both the substitution and income effects
42. ?Utility or satisfaction is a subjective concept; therefore it could only be
ranked?. The statement supports
(a) Cardinal utility theorist(b) Ordinal utility theorist
(c) Behavioral theorist of the firm(d) None of the above
43. Ordinal utility analysis is otherwise known as
(a) Gossens second law(b) Cardinality approach
(c) Indifference curve analysis(d) Rationality approach
44. Ordinal utility analysis Was developed by
(a) J.R.Hicks & R.J.D. Allen(b) Samualson
(c) Marshall and Jevons(d) Slutsky
45. Total utility curve
(a) Always rises(b) First falls then rises
(c) Always falls(d) First rises and then falls after reaching its maximum
46. At saturation point MU of a commodity is
(a) Positive(b) Negative
(c) Zero(d) Increasing
47. A consumer reaches equilibrium when
(a) Marginal utility is equal to price(b) Marginal utility greater than price
(c) Marginal utility less than price(d) Total utility is equal to price
48. Marshalian cardinal utility analysis assumes
(a) Marginal utility of money is zero
(b) Marginal utility of money is decreasing
(c) Marginal utility of money is increasing
(d) Marginal utility of money is constant
49. When individuals income rises (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
Micro Economics Page 7
50. When individuals income falls (everything remain the same) his demand for
a normal good
(a) Rises(b) Falls
(c) Remains the same(d) negative
51. The concept of utility was introduced by
(a) Marshall(b) Hicks and allen
(c) Geremy Bentham(d) Gossen
52. Cardinal utility analysis to consumer equilibrium was developed by
(a) Marshall(b) Hicks and Allen
(c) Geremy Bentham(d) Gossen
53. MC at any level of output is given by
(a) Slope of TC curve(b) Slope of TVC curve
(c) Slope of either TC or TVC(d) Slope of TFC
54. If a firm?s average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which
one among the following is the marginal cost of producing the 7
th
unit
(a) 46(b) 2
(c) 36(d)42
55. The cost that cannot be recovered once spent
(a) Accounting cost(b) Fixed cost
(c) Implicit cost(d) Sunk cost
56. The saucer-type of modern Short run Average Variable Cost (SAVC) represents
(a) Excess capacity(b) Managerial costs
(c) Load factors(d) Reserve capacity
57. The Long run Average Cost curve (LAC) in modern cost theory is
roughly
(a) U shaped(b) Saucer shaped
(c) L shaped(d) Rectangular hyperbola
58. Under increasing returns to scale, which of the following is the nature of the
long run average cost curve?
(a) Downward sloping
(b) Upward rising
(c) Parallel to output axis
(d) Identical to short run average cost curve
Micro Economics Page 8
59. Which of the following has a U shape?
(a) Average fixed cost curve(b) Total cost curve
(c) Average variable cost curve(d) Total variable cost curve
60. AFC curve will always be
(a) Rectangular hyperbola(b) U shaped
(c) Horizontal(d) Downward sloping
61. Implicit cost of a factor of production is determined by its
(a) Sunk cost(b) Variable cost
(c) Fixed cost(d) Opportunity cost
62. Economic cost include both
(a) Explicit cost and implicit cost(b) Fixed cost and variable cost
(c) Explicit cost and prime cost(d) Money cost and sunk cost
63. The U shape of MC curve reflects
(a) Economies of scale(b) Law of increasing returns
(c) Reserve capacity(d) Law of variable proportion
64. Envelope curve is
(a) Long run marginal cost curve(b) Long run average cost curve
(c) Total cost curve(d) None of the above
65. In long run, which factor of production is fixed?
(a) Labour(b) Capital
(c)Building(d) None of the above
66. The U shape of the average total cost curve reflects
(a) LDMU(b) The Law of Variable Proportions
(c) Consumer?s Surplus(d) Reserve capacity
67. The total fixed cost is a
(a) Horizontal straight line(b) Vertical
(c) Hyperbola(d) U shaped
68. When AC minimum in short run
(a) AC < MC(b) AC > MC
(c) AC = MC(d) Any of above is possible
Micro Economics Page 9
69. The shape of TVC and TC are
(a) Rectangular hyperbola(b) Inverse ?S? shape
(c) Horizontal straight line(d) L shaped
70. The cost expressed not in terms of money but in terms of efforts of workers
undergone for making the commodity
(a)Opportunity cost(b) Real cost
(c) Sacrifice cost(d) Implicit cost
71. The MC curve cuts the AC curve at
(a) The maximum point(b) The initial Point
(c) The minimum Point(d) Any point
72. The minimum point of ATC is at ...................position of the minimum point of AVC
(a) Right(b) Left
(c) Same(d) All of above can be
73. If the long run cost curve shifts down wards it is an indication of
(a) Technological progress(b) Lower factor prices
(c) Both of these(d) Reserve capacity
74. The U shape of the LAC reflects
(a) Law of Variable proportions(b) Laws of returns to scale
(c) Reserve capacity(d) None of these
75. The responsiveness of quantity demanded of one commodity to the changes in the
price of another commodity is called
(a) Price Elasticity(b) Income Elasticity
(b) Cross Elasticity(c) Point Elasicity
76. The value of price elasticity of demand ranges from
(a) One to zero(b) Zero to infinity
(b) One to infinity(c) All the above
77. A production possibility curve is concave to the point of origin because of
(a) Increasing marginal rate of transformation (MRT)(b) Increasing marginal opportunity cost (MOC)(c) Both of the above
(d) Decreasing marginal rate of transformation
Micro Economics Page 10
78. The deductive method is also called
(a) Abstract(b) Analytical
(c) priori method(d) All the above
79. An Essay on the Nature and Significance of Economic Science was written by
(a) Adamsmith(b) Alfred marshall
c) Lord Robbins(d) Samuelson
80. The word ?Micro Economics and Macro Economics? were first coined by
(a) Adamsmith(b) Ragnar Frisch
(c ) Alfred marshall(d) Lord Robbins
Answer Key
1. A 11. C 21. C 31. A 41. D 51. C 61. A 71. B
2. C 12. A 22. B 32. D 42. B 52. A 62. A 72. B
3. A 13. C 23. C 33. D 43. C 53. C 63. D 73. C
4. C 14. B 24. D 34. C 44. A 54. A 64. D 74. A
5. D 15. B 25. B 35. B 45. D 55. B 65. B 75. C
6. C 16. C 26. A 36. B 46. C 56. B 66. A 76. B
7. B 17. C 27. B 37. C 47. A 57. D 67. A 77. C
8. B 18. C 28. D 38. D 48. D 58. D 68. B 78. D
9. B 19. D 29. A 39. D 49. A 59. C 69. A 79. C
10. B 20. A 30. A 40. B 50. B 60. D 70. C 80. B
Prepared by
1. Ajesh Babu K. P.(Assistant Professor, SDE, University of Calicut) 2. Dr. Shiji O.(Assistant Professor, SDE, University of Calicut)
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This post was last modified on 26 December 2019