Set 14

Marginal utility measures:
1. The slope of the indifference curve.
2. The addit ional satisfaction from consuming one more unit of a good.
3. The slope of the budget line.
4. The marginal rate of substitution.
Which of the following best expresses the law of diminishing marginal utility?
1. The more a person consumes of a product, the smaller becomes the utility which he receives from its consumption.
2. The more a person consumes of a product, the smaller becomes the
  additional utility which she receives as a result of consuming an additional
  unit of the product.
3. The less a person consumes of a product, the smaller becom es the utility which she receives from its consumption.
4. The less a person consumes of a product, the smaller becomes the additional utility which he receives as a result of consuming an additional unit of the product.
A curve that represents all combinations of market baskets that provide the
same level of utility to a consumer is called:
1. A budget line.
2. An isoquant.
3. An indifference curve.
4. A demand curve.
The marginal rate of substitution:
1. May rise or fall, depending on the slope of the budget line.
2. Rises as you move downward along an indifference curve.
3. Falls as you move downward along an indifference curve.
4. Remains the sam e along a budget line.
Which of the following is a characteristic of the indifference curves?
1. They are concave to the origin.
2. They are convex to the origin.
3. Curves closer to the origin have the highest level of total utility
4. Curves closer to the origin have the highest level of marginal utility
In the diagram given below, the budget line is best represented by the line
1. AB
2. AD
3. FG
4. DG
The endpoints (horizontal and vertical intercepts) of the budget line:
1. Measure its slope.
2. Measure the rate at which one good can be substituted for anouther.
3. Measure the rate at which a consumer is willing to trade one good for anouther.
4. Represent the quantity of each good that could be purchased if all of the
  budget were allocated to that good.
If prices and income in a two-good society double, what will happen to the
budget line?
1. The intercepts of the budget line will increase.
2. The intercepts of the budget line will decrease.
3. The slope of the budget line may either increase or decrease.
4. There will be no effect on the budget line.
If Px = Py, then when the consumer maximises utility,
1. X must equal Y
2. MU(X) must equal MU(Y) .
3. MU(X) may equal MU( Y) , but it is not necessarily so.
4. X and Y must be substitutes.
The difference between what a consumer is willing to pay for a unit of a good
and what must be paid when actually buying it is called:
1. Producer surplus.
2. Consumer surplus.
3. Cost-benefit analysis.
4. Net utility
Which of following is a key assumption of a perfectly competitive market?
1. Firms can influence market price
2. Commodities have few sellers.
3. It is difficult for new sellers to enter the market.
4. Each seller has a very small share of the market.
A firm maximizes profit by operating at the level of output where:
1. Average revenue equals average cost.
2. Average revenue equals average variable cost.
3. Total costs are minimized.
4. Marginal revenue equals marginal cost.
The demand curve facing a perfectly competitive firm is:
1. Downward-sloping and less flat than the market demand curve
2. Downward-sloping and more flat than the market demand curve.
3. Perfectly horizontal.
4. Perfectly vertical.
The monopolist has no supply curve because:
1. The quantity supplied at any particular price depends on the monopolist's demand curve.
2. The monopolist's marginal cost curve changes considerably over time.
3. The relationship between price and quantity depends on both marginal cost and average cost.
4. There is a single seller in the market.
A doctor sizes up patients' income and charges wealthy patients more than
poorer ones. This pricing scheme represents a form of:
1. First-degree price discrimination.
2. Second-degree price discrimination.
3. Third-degree price discrimination.
4. Pricing at each consumer ’s reservation price.
For which of the following market structures is it assumed that there are
barriers to entry?
1. Perfect competition
2. Monopolistic competition
3. Monopoly
4. All of the above
A market with few entry barriers and with many firms that sell differentiated
products is:
1. Purely competitive.
2. A monopoly
3. Monopolistically competitive.
4. Oligopolistic.
Welfare economics is a branch of economics dealing with:
1. Social issues.
2. Normative issues.
3. Political issues.
4. None of the given options.
___________________ are goods that people must get a flavour of before they
can consider buying them.
1. Experience goods.
2. Giffen goods.
3. Normal goods.
4. None of the given options.
Which of the following does not refer to macroeconomics?
1. The study of aggregate level of economic activity.
2. The study of causes of nemployment.
3. The study of causes of inflation
4. The study of the economic behavior of individual decision-making units
  such as consumers, resource owners and business firms.

Set 14

Quiz