MICRO ECONOMICS

in increasing returns to factor total production 

• increases
• increases with diminishing rate
• decreases
• increases with increasing rate

Economics is the study of

• how society manages its unlimited resources.
• how to reduce our wants until we are satisfied.
• how to fully satisfy our unlimited wants.
• how to avoid having to make trade-offs.

A rational person does not act unless a. the action is ethical.

• b. the action produces marginal costs that exceed marginal benefits.
• the action produces marginal benefits that exceed marginal costs.
• the action makes money for the person.
• none of these answers.

Which of the following is not part of the opportunity cost of going on holiday?

• the money you spent on a theatre show there
• the money you could have made if you had stayed at home and worked
• the money you spent on food
• the money you spent on airline tickets.

Economic growth is depicted by

• shift in the production possibilities frontier outward
• a movement from inside the curve toward the curve.
• a shift in the production possibilities frontier inward.
• a movement along a production possibilities frontier toward capital goods.

Which of the following statements is normative?

• a. Large government deficits cause an economy to grow more slowly.
• People work harder if the wage is higher.
• The unemployment rate should be lower.
• Printing too much money causes inflation.

Positive statements are

• macroeconomic.
• microeconomic.
• statements of description that can be tested.
• statements of prescription that involve value judgments.

What is the slope of PPC

• Downward  concave
• Downward  convex
•  Upward  concave
• Upward concave

The condition of consumer equilibrium under cardinal approach in case of one commodity is 

• price of commodity should be rising
• price of commodity should equal to be marginal utility
• price of commodity should be decreasing
• none of these

At equilibrium under ordinal approach the MRS should be equal to

• MRTS
• Price Ratio
• Price
• Income