vu eco402 Final Term - Quiz No.4
vu eco402 Microeconomics Quiz
This quiz belongs to book/course code vu eco402 Microeconomics of vu organization. We have 8 quizzes available related to the book/course Microeconomics. This quiz has a total of 10 multiple choice questions (MCQs) to prepare and belongs to topic Final Term. NVAEducation wants its users to help them learn in an easy way. For that purpose, you are free to prepare online MCQs and quizzes.
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Question 1: Which of the following costs always increase(s) as output increases?
Fixed Cost
Average Fixed Cost
Total Variable Cost
Average Variable Cost
Question 2: Which of the following statements is correct?
Butter and margarine are examples of complement goods
Car and petrol are substitute goods
Butter and margarine are examples of substitute goods
Tea and coffee are complementary goods
Question 3: In the long run, which of the following is considered a variable cost?
Expenditures for wages
Expenditures for raw materials
Expenditures for capital machinery and equipment
All of the given
Question 4: When a price floor is above the equilibrium price,
quantity demanded will exceed quantity supplied.
quantity supplied will exceed quantity demanded.
the market will be in equilibrium.
This is a trick question because price floors generally exist below the equilibrium price.
Question 5: If the demand for a good increases, which of the following will generally occur in a market setting?
The price of the good will decrease.
The supply of the good will increase.
The quantity supplied will increase.
Producer profits will fall.
Question 6: Amount of one good that a consumer gives up to obtain more of another good is known as marginal rate of:
Utility
Disutility
Substitution
Technical substitution
Question 7: When demand is inelastic, an increase in price will result in
An increase in quantity demanded
An increase in consumer expenditures
A decrease in consumer expenditures
No change in consumer expenditures
Question 8: The price of chicken increases as the result of higher beef prices. This indicates that
chicken and beef are substitutes.
chicken and beef are complements.
the market demand for beef is inelastic.
the market demand for chicken is elastic.
Question 9: The primary benefit that results when a nation employs its resources in accordance with the principle of comparative advantage is
an expansion in capital investment resulting from a reallocation of resources away from consumption.
a larger output resulting from a more efficient use of resources.
greater equality of income resulting from an increase in the number of workers.
an increase in the profitability of business enterprises resulting from an increase in capital formation.
Question 10: A reduction in gasoline prices caused the demand to increase. The lower prices led to an increase in demand for large cars, causing their prices to rise. These statements
are essentially correct.
contain one error; the lower gasoline prices would cause a reduction in demand for large cars, not an increase.
contain one error; the lower gasoline prices would increase the quantity of gasoline demanded by consumers, not the demand for large cars.
contain two errors; the lower gasoline prices would cause the quantity of gasoline demanded (rather than demand for large cars) to increase, and the lower gasoline price would reduce (rather than increase) the demand for large cars.
