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Question # 1 of 10

The law of diminishing marginal utility refers to the:

Units of a good.

Idea that total utility is negative.

Decrease in total satisfaction as more units of the good are consumed. Fall in additional satisfaction created by consumption of more and more.

Question # 2 of 10

In case of economies of scale long run total cost (LRTC) curve is:

Upward sloping with falling slope

Upward sloping with rising slope

Downward sloping with falling slope

Downward sloping with rising slope

Question # 3 of 10

For a firm, which of the following is considered to be a fixed cost?

Labor cost

Electricity cost

Rental cost

Depreciation cost

Question # 4 of 10

If inputs used in the production of wheat are increased by 30 percent and wheat production increases by 40 percent, then there must be:

Increasing returns to factor.

Constant returns to scale.

Increasing returns to scale.

Decreasing returns to scale.

Question # 5 of 10

Suppose firm A is producing bicycles. If demand for bicycles is increased and firm A has enough time to increase supply by employing all factors of production, then one can say that:

Firm A is operating in the short run.

Firm A is operating in the long run.

Firm A has inelastic supply curve for bicycles.

Firm A has inelastic demand curve for bicycles.

Question # 6 of 10

If population of a country is increasing but output remains constant, it implies that:

Production/consumption can be expected to fall Production/consumption can be expected to increase Production/consumption can be expected to remains constant None of the given options is true

Question # 7 of 10

Suppose Atif is willing to give up 10 units of apple (on the vertical axis) for 10 units of oranges (on the horizontal axis), and his level of satisfaction is unchanged, the marginal rate of substitution is:

0.5.

1.

2.

5.

Question # 8 of 10

Procter & Gamble Pakistan (Pvt) Ltd is producing 500 units of soap. To produce these units company bears Rs.8000 for total fixed cost and Rs.2000 for total variable cost. What will be the average variable cost in this case?

Rs.4

Rs.10

Rs.16

Rs.20

Question # 9 of 10

If total revenue function of a firm is

TR=180Q−Q2

, slope of average revenue function will be:

1

-1

1Q

-1Q

Question # 10 of 10

In case of decreasing returns to scale isoquants:

Are equally spaced

Become further and further apart from each other

Become closer and closer to each other

Undergo no changeDisscussion Group