ECO 401 MCQs from Real Quiz (Chapter 1-12)
Question # 1 of 15 ( Start time: 01:24:42 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 # 2 of 15 ( Start time: 01:25:51 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 # 3 of 15 ( Start time: 01:26:44 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 # 4 of 15 ( Start time: 01:28:09 PM ) Total Marks: 1
Due to capacity constraints, the price elasticity of supply for most products is:
Select correct option:
The same in the long run and the short run.
Greater in the long run than in the short run.
Greater in the short run than in the long run.
Too uncertain to be estimated.
Question # 5 of 15 ( Start time: 01:29:48 PM ) Total Marks: 1
An indifference curve is:
Select correct option:
A collection of market baskets that are equally desirable to the consumer.
A collection of market baskets that the consumer can buy.
A curve whose elasticity is constant for every price.
A curve which passes through the origin and includes all of the market baskets that the consumer regards as being equivalent.
Question # 6 of 15 ( Start time: 01:31:10 PM ) Total Marks: 1
If a sales tax on beer leads to reduced tax revenue, this means:
Select correct option:
Elasticity of demand is < 1.
Elasticity of demand is > 1.
Demand is upward-sloping.
Demand is perfectly inelastic.
Question # 7 of 15 ( Start time: 01:32:53 PM ) Total Marks: 1
The numerical measurement of a consumer's preference is called:
Select correct option:
Satisfaction
Use
Pleasure
Utility
Question # 8 of 15 ( Start time: 01:34:15 PM ) Total Marks: 1
It is expected that the sign of cross elasticity between two complementary goods would be:
Select correct option:
Positive
Negative
Zero
None of the given options.
Question # 9 of 15 ( Start time: 01:35:45 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 # 10 of 15 ( Start time: 01:36:56 PM ) Total Marks: 1
A Demand Curve is price inelastic when:
Select correct option:
Changes in demand are proportionately smaller than those in price
Changes in demand are proportionately greater than those in price
Changes in demand are equal than those in price
None of the given options.
Reference: http://cepfe.nmsu.edu/?q=node/413
Question # 11 of 15 ( Start time: 01:38:42 PM ) Total Marks: 1
The production possibilities curve:
Select correct option:
Shows all combinations of goods that society most desires
Indicates that any combination of goods lying outside the curve is attainable
Separates all combinations of two goods that can be produced from those that cannot
Shows only those combinations of two goods that reflect "full production"
Reference: The production possibilities curve is a frontier, indicating the maximum amount of one good achievable for a given amount of the other good. Only one of these combinations represents the combination society most desires and therefore represents "full production."
Question # 12 of 15 ( Start time: 01:39:59 PM ) Total Marks: 1
The demand for chicken is downward-sloping. Suddenly the price of chicken rises from $130 per kilo to $140 per kilo. This will cause:
Select correct option:
The demand curve to shift to the left
The demand curve to shift to the right
Quantity demanded to increase
Quantity demanded to decrease
Question # 13 of 15 ( Start time: 01:41:46 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: 01:43:01 PM ) Total Marks: 1
A nation's production possibilities curve is "bowed out" from the origin because:
Select correct option:
Resources are not perfectly shiftable between productions of the two goods
Capital goods and consumer goods utilize the same production technology
Resources are scarce relative to human wants
Opportunity costs are decreasing
