Eco401 Online Quiz

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Question # 1 of 15 ( Start time: 07:45:05 PM ) Total Marks: 1 
Which of the following is true about the entrepreneur? 
Select correct option: 

An entrepreneur is an innovator. 
An entrepreneur is someone who brings resources together and produces a product. 
An entrepreneur is a risk taker. 
All of the given options are correct.

Question # 2 of 15 ( Start time: 07:46:04 PM ) Total Marks: 1 
Goods X and Y are complements while goods X and Z are substitutes. If the supply of good X increases: 
Select correct option: 

The demand for both Y and Z will increase. 
The demand for Y will increase while the demand for Z will decrease. 
The demand for Y will decrease while the demand for Z will increase. 
The demand for both Y and Z will decrease.

Question # 3 of 15 ( Start time: 07:47:05 PM ) Total Marks: 1 
If the income elasticity of demand for boots is 0.2, a 10% increase in consumer income will lead to a: 
Select correct option: 

20% increase in the quantity of boots demanded. 
20% decrease in the quantity of boots demanded. 
2% increase in the quantity of boots demanded. 
0.2% increase in the quantity of boots demanded.

Question # 4 of 15 ( Start time: 07:48:27 PM ) Total Marks: 1 
A person with a diminishing marginal utility of income: 
Select correct option: 

Will be risk averse. 
Will be risk neutral. 
Will be risk loving. 
Cannot decide without more information.

Question # 5 of 15 ( Start time: 07:49:13 PM ) Total Marks: 1 
Assume Leisure is a normal good. If income effect equals substitution effect then a wage rate increase will lead a person to: 
Select correct option: 

Increase hours of work 
Decrease hours of work 
Not change hours of work 
None of the given options


Question # 6 of 15 ( Start time: 07:50:10 PM ) Total Marks: 1 
The substitution effect of a price decrease for a good with a normal indifference curve pattern: 
Select correct option: 

Is always inversely related to the price change. 
Measures the change in consumption of the good that is due to the consumer's feeling of being richer. 
Is measured by the horizontal distance between the original and the new indifference curves. 
Is sufficient information to plot an ordinary demand curve for the commodity being considered.

Question # 7 of 15 ( Start time: 07:51:25 PM ) Total Marks: 1 
More output could be produced with available resources if: 
Select correct option: 

Resources are allocated efficiently. 
Resources are imperfectly shiftable among alternative uses. 
Prices are reduced. 
The economy is operating at a point inside the production possibilities curve.

Question # 8 of 15 ( Start time: 07:52:09 PM ) Total Marks: 1 
A new technology which reduces costs for firms: 
Select correct option: 

Shifts the supply curve to the right. 
Shifts the supply curve to the left. 
Reduces the equilibrium quantity. 
Raises the equilibrium price.

Question # 9 of 15 ( Start time: 07:52:57 PM ) Total Marks: 1 
If consumer incomes increase, the demand for product Y: 
Select correct option: 

Will necessarily remain unchanged. 
Will shift to the right if Y is a complementary good. 
Will shift to the right if Y is a normal good. 
Will shift to the right if Y is an inferior good.

Question # 10 of 15 ( Start time: 07:54:07 PM ) Total Marks: 1 
The study of economics basically focuses on: 
Select correct option: 

For whom resources are allocated to increase efficiency. 
How society spends the income of individuals. 
How scarce resources are allocated to fulfill society's goals. 
What scarce resources are used to produce goods and services.

Question # 12 of 15 ( Start time: 07:55:15 PM ) Total Marks: 1 
A partial explanation for the inverse relationship between price and quantity demanded is that a: 
Select correct option: 

Lower price shifts the supply curve to the left. 
Higher price shifts the demand curve to the left. 
Lower price shifts the demand curve to the right. 
Higher price reduces the real incomes of buyers.
Question # 13 of 15 ( Start time: 07:56:31 PM ) Total Marks: 1 
Demand is elastic when the elasticity of demand is: 
Select correct option: 

Greater than 0. 
Greater than 1. 
Less than 1. 
Less than 0.


Question # 14 of 15 ( Start time: 07:57:34 PM ) Total Marks: 1 
Which of the following is not an assumption of ordinal utility analysis? 
Select correct option: 

Consumers are consistent in their preference. 
Consumers can measure the total utility received from any given basket of good. 
Consumers are non-satiated with respect to the goods they confront. 
All are necessary.

Question # 15 of 15 ( Start time: 07:58:17 PM ) Total Marks: 1 
Suppose we find that the cross-price elasticity of demand for two products is a negative number. We know that: 
Select correct option: 

The two goods are normal goods. 
The two goods are inferior goods. 
The two goods are substitutes. 
The two goods are complements.

.........

Question # 1 of 15 ( Start time: 08:00:58 PM ) Total Marks: 1 
Assume that the government sets a ceiling on the interest rate that banks charge on loans. If the ceiling is set below the market equilibrium interest rate, the result will be: 
Select correct option: 

A surplus of credit. 
A shortage of credit. 
Greater profits for banks issuing credit. 
A perfectly inelastic supply of credit in the market place.

Question # 2 of 15 ( Start time: 08:02:05 PM ) Total Marks: 1 
Suppose the price of railway ticket decreases, what will happen in the market for airline travel? 
Select correct option: 

The demand curve for airline travel shifts left. 
The demand curve for airline travel shifts right. 
The supply curve of airline travel shifts left. 
The supply curve of airline travel shifts right.

Question # 3 of 15 ( Start time: 08:03:18 PM ) Total Marks: 1 
Our economy is characterized by: 
Select correct option: 

Unlimited wants and needs. 
Unlimited material resources. 
No energy resources. 
Abundant productive labor.

Question # 4 of 15 ( Start time: 08:04:05 PM ) Total Marks: 1 
Which of the following is a characteristic of a mixed economy? 
Select correct option: 

In mixed economy, resources are governed by both government and individuals. 
Mixed economy utilizes the characteristics of both market economy and planned economy to allocate goods and services. 
People are free to make their decisions and government controls the Defence. 
All of the given options are true.

Question # 5 of 15 ( Start time: 08:04:47 PM ) Total Marks: 1 
The total utility curve for a risk neutral person will be: 
Select correct option: 

Straight line. 
Convex. 
Concave. 
None of the given options.

Question # 6 of 15 ( Start time: 08:05:35 PM ) Total Marks: 1 
The short run, as economists use the phrase, is characterised by: 
Select correct option: 

All inputs being variable. 
At least one fixed factor of production and firms neither leaving nor entering the industry. 
No variable inputs - that is, all of the factors of production are fixed. 
A period where the law of diminishing returns does not hold.

Question # 7 of 15 ( Start time: 08:06:43 PM ) Total Marks: 1 
In pure capitalism, freedom of enterprise means that: 
Select correct option: 

Businesses are free to produce products that consumers want. 
Consumers are free to buy goods and services that they want. 
Resources are distributed freely to businesses that want them. 
Government is free to direct the actions of businesses.

Question # 8 of 15 ( Start time: 08:07:04 PM ) Total Marks: 1 
A market is said to be in equilibrium when: 
Select correct option: 

Supply equals Price. 
There is downward pressure on price. 
The amount consumers wish to buy at the current price equals the amount producers wish to sell at that price. 
All buyers are able to find sellers willing to sell to them at the current price.

Question # 9 of 15 ( Start time: 08:07:54 PM ) Total Marks: 1 
The correlation between an asset's real rate of return and its risk (as measured by its standard deviation) is usually: 
Select correct option: 

Positive. 
Strictly linear. 
Flat. 
Negative.

Question # 10 of 15 ( Start time: 08:09:01 PM ) Total Marks: 1 
The cross elasticity of demand of complements goods is: 
Select correct option: 

Less than 0. 
Equal to 0. 
Greater than 0. 
Between 0 and 1.

Question # 11 of 15 ( Start time: 08:10:02 PM ) Total Marks: 1 
Indifference curves that are convex to the origin reflect: 
Select correct option: 

An increasing marginal rate of substitution. 
A decreasing marginal rate of substitution. 
A constant marginal rate of substitution. 
A marginal rate of substitution that first decreases then increases.

Question # 12 of 15 ( Start time: 08:10:44 PM ) Total Marks: 1 
We know that the demand for a product is elastic if: 
Select correct option: 

When price rises, revenue rises. 
When price rises, revenue falls. 
When price rises, quantity demanded rises. 
When price falls, quantity demanded rises.

Question # 13 of 15 ( Start time: 08:11:35 PM ) Total Marks: 1 
Goods X and Y are complements while goods X and Z are substitutes. If the supply of good X increases: 
Select correct option: 

The demand for both Y and Z will increase. 
The demand for Y will increase while the demand for Z will decrease. 
The demand for Y will decrease while the demand for Z will increase. 
The demand for both Y and Z will decrease.

Question # 14 of 15 ( Start time: 08:12:40 PM ) Total Marks: 1 
When an industry's raw material costs increase, other things remaining the same: 
Select correct option: 

The supply curve shifts to the left. 
The supply curve shifts to the right. 
Output increases regardless of the market price and the supply curve shifts upward. 
Output decreases and the market price also decrease.

Question # 15 of 15 ( Start time: 08:13:06 PM ) Total Marks: 1 
The numerical measurement of a consumer's preference is called: 
Select correct option: 

Satisfaction. 
Use. 
Pleasure. 
Utility.

...........

Question # 1 of 15 ( Start time: 08:15:23 PM ) Total Marks: 1
The extra value that consumers receive above what they pay for that good is called:
Select correct option:
Producer surplus.
Utility.
Marginal utility.
Consumer surplus.

Question # 2 of 15 ( Start time: 08:16:11 PM ) Total Marks: 1
Consider two commodities X and Y. If the cross-elasticity of demand is positive, it means the goods are:
Select correct option:
Independent.
Complements.
Substitutes.
Inferior.

Question # 3 of 15 ( Start time: 08:16:54 PM ) Total Marks: 1
At any given point on an indifference curve, the the slope is equal to:
Select correct option:
Unity.
The marginal rate of substitution.
The consumer's marginal utility.
None of the given options.

Question # 4 of 15 ( Start time: 08:18:17 PM ) Total Marks: 1
When the price of petrol rises by 8%, the quantity of petrol purchased falls by 6%. This shows that the demand for petrol is:
Select correct option:
Perfectly elastic.
Unit elastic.
Price elastic.
Price inelastic.

Question # 5 of 15 ( Start time: 08:16:54 PM ) Total Marks: 1
If the cost of computer components falls, then
Select correct option:
The demand curve for computers shifts to the right.
The demand curve for computers shifts to the left.
The supply curve for computers shifts to the right.
The supply curve for computers shifts to the left.

Question # 6 of 15 ( Start time: 08:21:02 PM ) Total Marks: 1
The correlation between an asset's real rate of return and its risk (as measured by its standard deviation) is usually:
Select correct option:
Positive.
Strictly linear.
Flat.
Negative.

Question # 7 of 15 ( Start time: 08:22:18 PM ) Total Marks: 1
We know that the demand for a good or service is inelastic if:
Select correct option:
When price rises, quantity demanded rises.
When price rises, quantity demanded falls.
When price rises, total revenue rises.
When price rises, total revenue falls.

Question # 8 of 15 ( Start time: 08:23:12 PM ) Total Marks: 1
Which of the following is not an assumption of ordinal utility analysis?
Select correct option:
Consumers are consistent in their preference.
Consumers can measure the total utility received from any given basket of good.
Consumers are non-satiated with respect to the goods they confront.
All are necessary.

Question # 9 of 15 ( Start time: 08:24:38 PM ) Total Marks: 1
If your demand price for one unit of a good is Rs. 100 and the market price is Rs. 75, your consumer's surplus will be:
Select correct option:
Rs.25.
Rs.50.
Rs.75.
Rs.100.

Question # 10 of 15 ( Start time: 08:26:02 PM ) Total Marks: 1
A market is said to be in equilibrium when:
Select correct option:
Supply equals Price.
There is downward pressure on price.
The amount consumers wish to buy at the current price equals the amount producers wish to sell at that price.
All buyers are able to find sellers willing to sell to them at the current price.

Question # 11 of 15 ( Start time: 08:26:32 PM ) Total Marks: 1
Which of the following does NOT refer to macroeconomics?
Select correct option:
The study of the aggregate level of economic activity.
The study of the economic behavior of individual decision-making units such as consumers, resource owners, and business firms.
The study of the cause of unemployment.
The study of the cause of inflation.

Question # 12 of 15 ( Start time: 08:27:39 PM ) Total Marks: 1
Which of the following defines the opportunity cost?
Select correct option:
It is measured only in rupees.
It is the cost to society of producing the goods.
It is the difficulty associated with using one good in place of another.
It is the cost of next best alternative forgone.

Question # 13 of 15 ( Start time: 08:28:37 PM ) Total Marks: 1
The law of increasing opportunity costs states that:
Select correct option:
The more one is willing to pay for resources, the larger will be the possible level of production.
Increasing the production of a particular good will cause the price of the good to rise.
In order to produce additional units of a particular good, it is necessary for society to sacrifice increasingly larger amounts of alternative goods.
Only by keeping production constant can rising prices be avoided.

Question # 14 of 15 ( Start time: 08:30:03 PM ) Total Marks: 1
The marginal rate of substitution is equal to the:
Select correct option:
Magnitude of the slope of the indifference curve
Relative price
Marginal cost of each good
Slope of the budget line

Question # 15 of 15 ( Start time: 08:31:02 PM ) Total Marks: 1
If the income elasticity of demand is 1/2, the good is:
Select correct option:
A luxury.
A normal good (but not a luxury).
An inferior good.
A Giffen good.