ECO402 Current Spring 2011 Final Term VU Paper [July 2011] Virtual University of Pakistan
Tuesday, July 19, 2011 Posted In .Final Term Exam Spring 2011 (July) Edit This
ECO402 Current Spring 2011 Final Term VU Paper [July 2011] Virtual University of Pakistan
Q:Eliminating price supports for all US agricultural producers will hurt the farmers who cultivate products that have:
A high own price elasticity of demand and a high price elasticity of market supply.
A high own price elasticity of demand and a low price elasticity of market supply.
A low own price elasticity of demand and a high price elasticity of market supply.(nt sure)
A low own price elasticity of demand and a low price elasticity of market supply.
Q:Suppose a monopolist increases production from 10 units to 11 units.if the market price declines from $20 to $ 19 per unit,marginal revenue for the eleventh unit is:
$1
$9
$19
$20
Q:When people pay a monthly fee to have a hookup to the telephone company's line plus a fee for each call actually made,we would say that the telephone company is using:
Limit pricing
A two-part tariff
Two stage price discrimination
Second degree price discrimination
Q:A price starategy that requires consumers pay an up-front fee plus an additional fee for each unit of product purchased is a:
Tying contract
Two-part tariff
Form of perfect price discrimination
None of the given options
Q:which of the following is true of the output level produces a firm in long run equilibrium in a monopolistically competitive industry?
It produces at average cost
It does not produce at minimum average cost,and average cost is increasing
It does not produce at minimum average cost,average cost is decreasing
None of the given
Q:A market structure in which there is one large firm that has a major share of the market and many smaller firms supplying the remainder of the maket is called:
The stackelberg model
The dominant firm model
The cournot model
The Bertrand model
Q:If an individual's labor supply curve is backward bending,then:
The income effect associated with a higher wage is greater than the substitution effect
The substituition effect associated with a higher wage is greater than the income effect
The substituition effect associated with a higher wage encourages more leisure
None
Q:when the factor market is purely competitive,the firm's average expenditure curve for a factor or production is:
Upward sloping and to the right of marginal expenditure curve
Downward sloping and to the right of the marginal expenditure curve
Identical to the marginal expenditure curve
Downward sloping and to the left of the marginal expenditure curve
Q:A firm purchases a factor of production in acompetitive market.at the current purchase rate the MRP of the factor is greater than the marginal expenditure for the factor.Thus,the firm:
Can increase profit by reducing the employmet of the factor of production
Is now maximizing profit
Should not use this factor of production because it has no potential in generating a profit
Can increase profit by expanding the employment of the factor of production.
Q:A local restaurant offers an'all-you-can-eat'salad bar for $3.49.however,with any sandwich a customer can add the'all-you-can-eat' salad bar for $1.49.this is an example of:
Peak-load pricing
Second-degree price discrimination
A two part tariff
None
Q:the industry demand curve for labor is the:
Horizontol sum of individual firm labor(think so)
Vertical sum of individual firm demand curves
Representative firm's demand curve multiplied by the number of firms
None
Q:the market structure in which strategic considerations are most important is:
Monopolistic competition
Oligopoly
Pure competition
Pure monopoly
Q:which of the following can be thought of as barrier to entry?
Scale economics
Patents
Strategic actions by incumbent firms
All
Q:In stackelberg model,there is an advantage:
To wait until your competitor herself to a particular output level before deciding on your output level
To being the first competitor to commit to an output level
To the firm with a dominant strategy
To produce an output level which is identical to a monopolist's output level.
Q:whch oligopoly model have the same results as the competitive model?
Cornot
Bertrand
Stackelberg
Both cournot and stackelberg
Q:scarcity can be avoided by amking:
Needs unlimited
Wants unlimited
Resources limites
Wants and need limited
A high own price elasticity of demand and a high price elasticity of market supply.
A high own price elasticity of demand and a low price elasticity of market supply.
A low own price elasticity of demand and a high price elasticity of market supply.(nt sure)
A low own price elasticity of demand and a low price elasticity of market supply.
Q:Suppose a monopolist increases production from 10 units to 11 units.if the market price declines from $20 to $ 19 per unit,marginal revenue for the eleventh unit is:
$1
$9
$19
$20
Q:When people pay a monthly fee to have a hookup to the telephone company's line plus a fee for each call actually made,we would say that the telephone company is using:
Limit pricing
A two-part tariff
Two stage price discrimination
Second degree price discrimination
Q:A price starategy that requires consumers pay an up-front fee plus an additional fee for each unit of product purchased is a:
Tying contract
Two-part tariff
Form of perfect price discrimination
None of the given options
Q:which of the following is true of the output level produces a firm in long run equilibrium in a monopolistically competitive industry?
It produces at average cost
It does not produce at minimum average cost,and average cost is increasing
It does not produce at minimum average cost,average cost is decreasing
None of the given
Q:A market structure in which there is one large firm that has a major share of the market and many smaller firms supplying the remainder of the maket is called:
The stackelberg model
The dominant firm model
The cournot model
The Bertrand model
Q:If an individual's labor supply curve is backward bending,then:
The income effect associated with a higher wage is greater than the substitution effect
The substituition effect associated with a higher wage is greater than the income effect
The substituition effect associated with a higher wage encourages more leisure
None
Q:when the factor market is purely competitive,the firm's average expenditure curve for a factor or production is:
Upward sloping and to the right of marginal expenditure curve
Downward sloping and to the right of the marginal expenditure curve
Identical to the marginal expenditure curve
Downward sloping and to the left of the marginal expenditure curve
Q:A firm purchases a factor of production in acompetitive market.at the current purchase rate the MRP of the factor is greater than the marginal expenditure for the factor.Thus,the firm:
Can increase profit by reducing the employmet of the factor of production
Is now maximizing profit
Should not use this factor of production because it has no potential in generating a profit
Can increase profit by expanding the employment of the factor of production.
Q:A local restaurant offers an'all-you-can-eat'salad bar for $3.49.however,with any sandwich a customer can add the'all-you-can-eat' salad bar for $1.49.this is an example of:
Peak-load pricing
Second-degree price discrimination
A two part tariff
None
Q:the industry demand curve for labor is the:
Horizontol sum of individual firm labor(think so)
Vertical sum of individual firm demand curves
Representative firm's demand curve multiplied by the number of firms
None
Q:the market structure in which strategic considerations are most important is:
Monopolistic competition
Oligopoly
Pure competition
Pure monopoly
Q:which of the following can be thought of as barrier to entry?
Scale economics
Patents
Strategic actions by incumbent firms
All
Q:In stackelberg model,there is an advantage:
To wait until your competitor herself to a particular output level before deciding on your output level
To being the first competitor to commit to an output level
To the firm with a dominant strategy
To produce an output level which is identical to a monopolist's output level.
Q:whch oligopoly model have the same results as the competitive model?
Cornot
Bertrand
Stackelberg
Both cournot and stackelberg
Q:scarcity can be avoided by amking:
Needs unlimited
Wants unlimited
Resources limites
Wants and need limited
Q:land is best described as:
Produced factors of production
"organizational"resources
Physical and mental abilities of people
"naturally"occurring resources
Q:the constant dollar price is:
The real price
The nominal price of a good adjusted for inflation
The current dollar price adjusted for inflation
All
Q:The slope of the total product curve is the:
Average product
Marginal product
Marginal rate of technical substituition
None
Q:in the long-run which of the following is considered as a variable cost?
Expenditures for wages
Expenditures for raw material
Expenditures for capital machinery and equipment
All
Q:when a product transformation curve is bowed outward,there are:
Economies of scale
Economies of scope
Diseconomies of scope
Diseconomies of scale
Q:competitive firm will operate at …….in the long run
Its efficient scale
Minimum marginal cost
TR>TC
Maximum MR
Q:in a ………..industry an increase in demand will be followed by an increase in supply that will bring price down to the level it was before the demand shift.
Constant cost industry
Increasing cost industry
Decreasing cost industry
None
Q:marginal revenue for a monopolist is:
Less than price
Equal to average revenue
More than average revenue
Less than average revenue
Q:if market supply is elastic monosony will be…..and if the market supply is inelastic than monosony power will be…….
High,high
High,low
Low,high
Low,low
Q:ability to split consumers into different groups is the necessary condition of:
Price discrimination
Two part tariff
Bundling
All
Q:A monopoly can be temporary because of:
High barriers to entry
Priviliges granted by the government
Economies of scale
Economic profits,which attract rivals.
Q:lerner index for monopoly power can be written as:
L=(P-MC)/P
L=P-MC
LP-MC)P
L=P/MC
Q:in third degree price discrimination we give the discounts to the students not all the consumer because of:
Less affordability and more elasticity of demand
Less affordability and less elasticity of demand
More affordability and more elasticity of supply
More affordability and less elasticity of demand
Q:we make groups of consumers in …….price discrimination and….price discrimination.
First degree,second degree(nt sure)
Second degree,intertemporal
Third degree,interemporal
Second degree,third degree
Q:in two part tariff when there is only a single consumer,the shape of MCis:
Horizontal to x-axis
Vertical to Y-axis
Upward sloping
Downward sloping
Q:in the long-run …..both for perfectly competitive firm and monopolistically competitive firm.
P=MC
MC=ATC
P>MR
Economic profit equals zero
Q:a firm is in equilibrium when the marginal factor cost is
Less than the price of factor
Greater than the average product
Equal to the average product
Equal to the marginal revenue product
Q:if there are only two goods X and Y which are consumed by the individual which of the following expressions represents the utility maximizing market basket?
MRSxy is at maximum
Px/Py+money income
MRsxy + money income
MRSxy +Px/Py
Q:A line that shows all combinations of two goods a consumer can buy is called a ……in indifference curve analysis
Indifference curve
Utility line
Budget line
Income possibility line
Q:what does the positive slope of Engel curve show?
It shows that both goods are normal
It shows that the good on the horizontal axis is normal
It shows as the price of the good on the horizontal axis increases,more of both goods is consumed
It shows as the price of the good on the vertical axis is increases,more of the good on the horizontal axis is consumed.
Q: what will be the effect on consumer expenditures for the purchases of price inelastic good?
Increase when price increases
Decrease when price increases
Do not change when price increases
Are not related to price elasticity of demand
Q:the total cost of producing compact dis (Q) is given as :TC=+%Q what is fixed cost?
400
5Q
5+(400/Q)
None
Q:why there is no supply curve under the condition of monopoly?(3 marks)
Q:How can a firm check that its advertising-to-sales ratio is not too high or too low?what information does it need?(3 marks)
Q:which model is used to illustrate price competition in an oligopolistic industry?write down the basic assumptions of this model?(3 marks)
Q:suppose an automobile company produces cars and tractors jointly.what are the benefits for the company to produce both things jointly?(3 marks)
Q:differentiate between competitive and non-competitive markets with the help of suitable examples?(5 marks)
Q:suppose a firm can practice perfect first degree discrimination what is the lowest price it will charge and what will be its total output?(5 marks)
Q:If in a monopolistically competitive market,
P=20-Q,Q=4 and AC is $8 than find out the prift?(5 marks)
Q:Explain the relationship between the supply of an input and the marginal expenditure on it,in case of monopsonist?(5 marks)
Produced factors of production
"organizational"resources
Physical and mental abilities of people
"naturally"occurring resources
Q:the constant dollar price is:
The real price
The nominal price of a good adjusted for inflation
The current dollar price adjusted for inflation
All
Q:The slope of the total product curve is the:
Average product
Marginal product
Marginal rate of technical substituition
None
Q:in the long-run which of the following is considered as a variable cost?
Expenditures for wages
Expenditures for raw material
Expenditures for capital machinery and equipment
All
Q:when a product transformation curve is bowed outward,there are:
Economies of scale
Economies of scope
Diseconomies of scope
Diseconomies of scale
Q:competitive firm will operate at …….in the long run
Its efficient scale
Minimum marginal cost
TR>TC
Maximum MR
Q:in a ………..industry an increase in demand will be followed by an increase in supply that will bring price down to the level it was before the demand shift.
Constant cost industry
Increasing cost industry
Decreasing cost industry
None
Q:marginal revenue for a monopolist is:
Less than price
Equal to average revenue
More than average revenue
Less than average revenue
Q:if market supply is elastic monosony will be…..and if the market supply is inelastic than monosony power will be…….
High,high
High,low
Low,high
Low,low
Q:ability to split consumers into different groups is the necessary condition of:
Price discrimination
Two part tariff
Bundling
All
Q:A monopoly can be temporary because of:
High barriers to entry
Priviliges granted by the government
Economies of scale
Economic profits,which attract rivals.
Q:lerner index for monopoly power can be written as:
L=(P-MC)/P
L=P-MC
LP-MC)P
L=P/MC
Q:in third degree price discrimination we give the discounts to the students not all the consumer because of:
Less affordability and more elasticity of demand
Less affordability and less elasticity of demand
More affordability and more elasticity of supply
More affordability and less elasticity of demand
Q:we make groups of consumers in …….price discrimination and….price discrimination.
First degree,second degree(nt sure)
Second degree,intertemporal
Third degree,interemporal
Second degree,third degree
Q:in two part tariff when there is only a single consumer,the shape of MCis:
Horizontal to x-axis
Vertical to Y-axis
Upward sloping
Downward sloping
Q:in the long-run …..both for perfectly competitive firm and monopolistically competitive firm.
P=MC
MC=ATC
P>MR
Economic profit equals zero
Q:a firm is in equilibrium when the marginal factor cost is
Less than the price of factor
Greater than the average product
Equal to the average product
Equal to the marginal revenue product
Q:if there are only two goods X and Y which are consumed by the individual which of the following expressions represents the utility maximizing market basket?
MRSxy is at maximum
Px/Py+money income
MRsxy + money income
MRSxy +Px/Py
Q:A line that shows all combinations of two goods a consumer can buy is called a ……in indifference curve analysis
Indifference curve
Utility line
Budget line
Income possibility line
Q:what does the positive slope of Engel curve show?
It shows that both goods are normal
It shows that the good on the horizontal axis is normal
It shows as the price of the good on the horizontal axis increases,more of both goods is consumed
It shows as the price of the good on the vertical axis is increases,more of the good on the horizontal axis is consumed.
Q: what will be the effect on consumer expenditures for the purchases of price inelastic good?
Increase when price increases
Decrease when price increases
Do not change when price increases
Are not related to price elasticity of demand
Q:the total cost of producing compact dis (Q) is given as :TC=+%Q what is fixed cost?
400
5Q
5+(400/Q)
None
Q:why there is no supply curve under the condition of monopoly?(3 marks)
Q:How can a firm check that its advertising-to-sales ratio is not too high or too low?what information does it need?(3 marks)
Q:which model is used to illustrate price competition in an oligopolistic industry?write down the basic assumptions of this model?(3 marks)
Q:suppose an automobile company produces cars and tractors jointly.what are the benefits for the company to produce both things jointly?(3 marks)
Q:differentiate between competitive and non-competitive markets with the help of suitable examples?(5 marks)
Q:suppose a firm can practice perfect first degree discrimination what is the lowest price it will charge and what will be its total output?(5 marks)
Q:If in a monopolistically competitive market,
P=20-Q,Q=4 and AC is $8 than find out the prift?(5 marks)
Q:Explain the relationship between the supply of an input and the marginal expenditure on it,in case of monopsonist?(5 marks)
