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MGT613 GDB No. 1 solution-2

Sunday, November 07, 2010 Posted In Edit This

We have already uploaded 2 solutions, following is another for ur help, a excel file.

MGT613 GDB Solution, click & Download the file
.......

Total Marks 

20 Starting Date
Thursday, November 04, 2010 Closing Date
Monday, November 08, 2010 Status Open Question/Description

Question: Given the weekly demand data, what are the exponential smoothing forecasts for periods 2-05 using a=0.10?
Week Demand 0.1 1 980 2 825 3 760 4 650 5

Note: Calculation along with the formula is required for each period's forecast. Students who give answers without calculation will be given low marks/no marks.

Mid-Term Preparation Data (Short Notes)

Sunday, November 07, 2010 Posted In Edit This
Mgt503 Short Notes (1 to 22 Lectures):

Mid-Term Preparation Data (Short Notes)

Sunday, November 07, 2010 Posted In Edit This
Short Notes of Mgt501 (1 to 22 Lectures):

Short Notes of Mgt301 (1 to 22 Lectures):

Short Notes of Mgt101 (1 to 22 Lectures):

Short Notes of CS101 (1 to 22 Lectures):

Mgt411 Assignment No. 1 Solution

Sunday, November 07, 2010 Posted In Edit This
Solution:

..........
Semester "Fall 2010"
"Money & Banking (MGT411)"
Assignment No. 01                                                   Marks: 15
Question no 1

Part (a)
On 01 January 2010 JS Group want to issue bonds in the capital market having
face value Rs.1, 000 with coupon rate of 10% (semi annually and 15 years
maturity). Investor required rate of return in this scenario is 12%.
You are being the student of finance know the worth of fundamental methods of
valuation; therefore you are required to calculate the present value of the bond by
utilizing the fundamental methods.
Part (b)
The bond of JS Group is traded in the Karachi Stock exchange for Rs.950. The
par value of the bond is Rs.1, 000. The coupon rate is fixed at 12 % paid annually.
This bond will be matured after 03 year. What will be (YTM) of this bond?
Part (c)
EFU, an insurance company, wants to plan a new service to its policy holders.
During the meeting of executives, CEO offered a plan of house insurance. The
summary of estimated cash flows which were discussed in that meeting is:
· This project will need Rs.05 million as initial investment
· In the first year company will receive Rs.02 million as premium from the
policy holders.
· In second year, company expect to receive Rs.2.5 millions as premium
· In third year company estimated that it will have to receive only Rs. 01
million because there will be a earth quack in that period, as probability of
having earth quack is more than 80% as predicted by geologists.
· In the fourth year the company estimated to get Rs.1.5 million after clearing
the insurance claims of the policy holders.
· In fifth year they expect to receive only Rs. 0.5 million
Calculate the IRR of above mentioned plan by trail and error method?

MCM301 Solution

Sunday, November 07, 2010 Posted In Edit This
Importance of listening skills

Listening skills have not been given much importance like other aspects of communication skills, but it is true that listening skills play a major role in the success of one's communication skills. Only a good listener can be a good speaker. Nobody has been loaded or programmed with good speaking skills at the time of birth. A baby starts speaking, only by listening to the words spoken by his family members. So a child first learns to speak his mother tongue and then other languages like English, Spanish, French etc. But the curiosity found in a baby to learn the language does not last very long as he starts to grow up. Slowly a child develops an ego by thinking that he is a good speaker and thet he should speak and others should listen to him.

Unless one has been restricted to speak, people do not break their speech. In general people do not even mind interrupting in the middle when somebody else is speaking. So only we have the etiquettes defined for the official meetings. It is a shameful thing that an etiquettes list has to contain a cause for saying. Only one person should speak at a time, it is common sense that if two or more people speak at a time, the listeners cannot grasp anybody's words. But still the clause "Only one person should speak at a time" has been required to be mentioned even at the meetings of high profiled professionals.

Animals have a tendency of crying together, they have the purpose in it. Because they want to make a loud noise either to grab attention or to pass a message. But human beings make such noise without any purpose. So, human being making such noises can be compared with the animals. Animals stand a level up. Common sense has been defined as a sense which is not common amongst the common people. So the listening skill has been one amongst such common senses. So only the conscious effort to possess good listening skill would make a good listener.

..........
The importance of listening in communication is enormous. People often focus on their speaking ability believing that good speaking equals good communication. The ability to speak well is a necessary component to successful communication. The ability to listen is equally as important.

The importance of listening in communication is often well illustrated when we analyze our listening skills with those closest to us. In particular I am referring to our spouse, partner, children or friends. Pay attention to the everyday conversations we have with these people with whom we think we communicate well.

Do you ever find yourself mindlessly saying "uh huh" when one of these folks is trying to tell you something only to have say just after "I'm sorry what did you say?" Have you been in a conversation with one of them and you are not really listening completely to what they have to say because you are too busy formulating your response?

This is actually quite common and yet we think we are good communicators. In order to communicate effectively we have to be able to hear what the other person is saying. Not just hear because the acoustics are good or because the other person is speaking in a loud enough tone. It is important that we hear what the person is saying because we have taken the time to actively listen.

Listening takes work and when it comes to improving our communication there is no getting around that. When we are listening to music or watching T.V. we can certainly let our minds wander. If we want our communication skills to get stronger it is important that we not day dream in a conversation but instead concentrate fully on what the other person is saying.

No doubt this can be difficult. Not every conversation we are in is particularly interesting. If however, we want to improve these skills focus is important even when dealing with younger children and teenagers.

Allowing the person to completely finish their thought before you begin to form a response is also crucial to good listening. To take it even one step further wait a moment before you begin to reply. This gives the other person a chance to add anything else they may have thought of. By waiting an additional moment before you reply you also let the other person know they have been heard completely. If you practice this for a time people will relax when conversing with you because they will know that they don't have to rush to get their two cents in. They will appreciate the fact that they can communicate with you and be heard.

When having those important conversations with the people closest to you, try taking it one step further and repeating back what they said "what I heard you say is you are uncomfortable..." By doing this you give the other person the opportunity to correct any misconceptions that may have occurred or to clarify any points they were trying to make. This heightens the level of communication you are enjoying. And the person you are communicating with will certainly feel respected and important given the care you are taking with the conversation.

The technique of repeating back for clarity had been extremely useful when I have had conversations with my teenagers. It also comes in handy when speaking with a spouse or partner. Often times in those situations we begin to assume we know what the other person means. Allowing them to express themselves completely actually allows for greater intimacy, something we often desire in our relationships but wonder why we are not achieving.

The importance of listening in communication is something worthwhile to consider. Good listeners are often some of the best speakers because they have taken the time to find out what people are truly interested in. If you understand what is important to people than you understand how to reach them.

The strategies I spoke about are just as effective in the workplace especially in sales. If you are really listening to what your customer wants it will be that much easier to fulfill their needs. The customer will be impressed that you listened to what they were communicating instead of just going into sales mode. I have personally found in sales that the more I listened and the less I talked the better my sales ratio was and the more satisfied my clients were. That is a win-win situation for all involved.
..............
Listen From Your Heart

Nature gave us one tongue and two ears so we could hear twice as much as we speak.
Epictetus


Think of a time when you were listened to wholeheartedly. How did it feel? Perhaps you sensed a deep
acceptance of yourself and your feelings by the other person. Perhaps you experienced the expansiveness of
freedom to be yourself. For most of us, this experience is rare. Especially when we want to express difficult
feelings, we are afraid of being rejected or brushed aside. As children, we may have had our feelings negated
by an overwhelmed parent saying "Stop crying" or "You shouldn't get so upset about that." We may also have
experienced this as adults, perhaps from a defensive partner. If we think back honestly, we have all been
closed-hearted listeners at one time or another. Where does this inclination to block out what someone else is
saying come from?

I believe it is a defensive mechanism to protect our vulnerability. To the extent that we have trouble
expressing our own feelings, another person's expression of her feelings threatens us. We are afraid of being
overwhelmed or losing control. We sometimes don't hear what's being said because something in the
message triggers hurt, anger or fear. Perhaps we feel attacked by what our partner is saying, forced to look at
something in ourselves that we don't want to see. Perhaps they are trying to make us responsible for how
they feel. Perhaps what the other says challenges our truth and instead of listening all of our energy goes into
hacking at the validity of their truth.

This intellectual skill of discussion that we honed at school may be good for winning debates, but is destructive
in a relationship. The word discussion originates from the Latin verb discutire, to strike asunder, shake apart,
scatter. To discuss is to dissect meaning. We can speak of "winning" or "losing" a discussion. If we base our
communication in relationships on this model, we are headed for misunderstanding and conflict. A partnership
model for communication is dialogue. There are no individual winners or losers in dialogue. Dialogue comes
from the Greek roots dia meaning across or through, and logus meaning word or study. When we engage in
dialogue we let meaning emanate. We are not engaged in a battle of right and wrong but are striving for
mutual understanding. Martin Buber wrote: "Dialogue is a mode of exchange among human beings in which
there is a true turning to one another, and a full appreciation of another not as an object in a social function,
but as a genuine being." Listening wholeheartedly means letting the other be, just as he is. Doing this
requires me to let go of what's on my own mind in order to hear what's on the other person's mind, allowing
me to entertain the world from his point of view. As long as I want to change the other, I cannot really listen
to him.

Closed-hearted listening takes many forms from subtle to overt: ignoring, interpreting, qualifying, defending,
contradicting, denying, changing the subject, walking away. These reactions are all attempts to change or
negate the other's reality. One of the things that hinders us from acknowledging the other's feelings is that we
mistakenly think that acknowledging is agreeing. This comes from the limiting right/wrong duality paradigm.
The both/and paradigm allows our realities to stand side by side. Becoming aware of and accepting the other

Training and coaching for businesses and private individuals in all areas of personal development.

person's reality does not mean taking responsibility for it. Even when someone is blaming me, what he really
wants is to be understood. If I consistently deny him that, we will remain stuck. Even if I did not intend to be
hurtful, if my partner feels hurt, what do I lose by saying "I am sorry that I hurt your did not intend to be
hurtful, if my partner feels hurt, what do I lose by saying "I am sorry that I hurt your feelings?" Does a sincere
apology make me less worthy? Instead of trying to convince him that I didn't intend hurt, why not accept that
he feels hurt?

No matter how hard we try, we cannot force another person to change. I can tell you from failed attempts of
my own at reforming others that this applies to bosses, children, spouses and parents. However, if we change
our way of relating to them, approaching them with a true curiosity and willingness to understand the world
from their point of view, we open the space for dramatic shifts in the relationship to occur. Listening is a magic
wand. A workshop participant asked in an exasperated tone how she could finally get her mother to listen to
her. I think you can guess my response: listen more to her. When we have the sense that someone isn't
listening to us, we usually attribute it to a shortcoming of theirs: "he's inconsiderate" or "she's just stubborn"
and so we try harder by repeating, insisting and speaking louder. You know how you react to those strategies.
Communication is a give and take process. If I am not open to my partner's opinion, then why should I expect
him to be open to mine? My working hypothesis for life is what I call the 50% rule. I am always at least 50%
responsible for what happens to me and my 50% is the only part I have any influence over. So if I have
difficulties communicating with someone else I need to change my behavior.

Listening is not a passive activity and cannot be reduced to holding your tongue (though that is a place to
start). Feigned attention will not work, nor will feigned acknowledgment. If you are genuinely interested in
wanting to understand the other person, you will naturally apply the skills of active listening: asking questions
to clarify that you really understand how she sees things, reflecting back the sense you have of how she feels
about them, partnering with her to ensure that you truly understand what's going on with her. As long as you
focus your energy on making the other wrong, you will never discover who she really is and you are blocking
the relationship from going anywhere. If you are not authentically open to the other person's reality, all the
active listening phrases in the world won't have an effect. Similarly, if you assume that you already know what
she is going to say or cut her off with an "I know just what you mean" only to launch into your own story, you
are hijacking the conversation. "Oh I know exactly how you feel" is essentially a slap in the face. Sympathy is
about your own feelings. Empathy is a bridge to the other person's experience. Empathy is when I just listen
and then respond by acknowledging the other's reality. I am willing to partner on equal ground, accepting that
each of our realities is valid and we are equally worthy of respect.

The Chinese character for listening includes the characters for ear, eyes and heart. Listening not only with
your ears, but with all of your senses, your intuition, your mind and your heart will help you reach mutual
understanding with others.

Eco401 Online Quiz

Sunday, November 07, 2010 Posted In Edit This

For solved online Quizzes & Papers pls visit Solved Online Quizzes & Past Papers

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.

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