ECO401 Quiz No 1 Fall 2012

ECO401 VU Quiz No 1 Fall 2012
Question # 1 of 15 ( Start time: 11:12:32 PM ) Total Marks: 1
The law of diminishing marginal utility indicates that the demand curve is:
Select correct option:
Vertical.
U shaped.
Upward sloping.
Downward sloping.
Question # 2 of 15 ( Start time: 11:13:37 PM ) Total Marks: 1
A normative economic statement:
Select correct option:
Is a statement of fact.
Is a hypothesis used to test economic theory.
Is a statement of what ought to be, not what is.
Is a statement of what will occur if certain assumptions are true.
Question # 3 of 15 ( Start time: 11:14:09 PM ) Total Marks: 1

Oligopoly differs from monopolistic competition in that an oligopoly includes:
Select correct option:
Product differentiation.
No barriers to entry.
Barriers to entry.
Downward sloping demand curves facing the firm.
Question # 4 of 15 ( Start time: 11:14:49 PM ) Total Marks: 1
Which of the following shows the condition for consumer’s equilibrium?
Select correct option:
It can be expressed as marginal utility per dollar spent on each good being equalized across all goods.
It can be expressed as the ratio of (marginal utility per unit of the good)/(price per unit of the good) being equalized across all goods.
It can be expressed as the ratio of marginal utilities being equated to the ratio of prices for all possible pairs of goods.
All of the given options.
Question # 5 of 15 ( Start time: 11:15:20 PM ) Total Marks: 1
If one firm increases its price, in the kinked demand curve model then:
Select correct option:
Other firms will also reduce their price.
Other firms will compete on a non-price basis.
Other firms will not increase their price.
Other firms will not change their price.
Question # 6 of 15 ( Start time: 11:16:18 PM ) Total Marks: 1
Which of the following is considered to be a variable cost in the long run?
Select correct option:
Expenditures for wages.
Expenditures for research and development.
Expenditures for raw materials.
All of the given Costs.
Question # 7 of 15 ( Start time: 11:16:55 PM ) Total Marks: 1
Why the economy does not self correct quickly, one explanation for this is:
Select correct option:
With less consumption and more savings the interest rate will drop.
In the short run workers are fully employed and cannot produce enough to get to long run equilibrium.
Wages and prices are flexible
Wages and prices are sticky.
Question # 8 of 15 ( Start time: 11:18:21 PM ) Total Marks: 1
Which of the following can be thought of as a barrier to entry?
Select correct option:
Scale economies.
Patents.
Strategic actions by incumbent firms.
All of the given options are true.
Question # 9 of 15 ( Start time: 11:18:59 PM ) Total Marks: 1
Marginal utility is best described as:
Select correct option:
The additional satisfaction gained by consumption of the last good.
The per unit satisfaction of the good consumed.
The total satisfaction gained from the total consumption of the good.
The change in satisfaction from consuming one additional unit of the good.
Question # 10 of 15 ( Start time: 11:19:47 PM ) Total Marks: 1
According to the model of aggregate supply and aggregate demand, in the long run, an increase in the money supply should cause
Select correct option:
Prices to rise and output to rise.
Prices to fall and output to remain unchanged
Prices to fall and output to fall.
Prices to rise and output to remain unchanged
Question # 11 of 15 ( Start time: 11:20:23 PM ) Total Marks: 1
If Competitive markets do not achieve equitable outcomes, then it is called:
Select correct option:
Imperfect market structure.
Market failure.
Not rational consumers.
None of the given options.
Question # 12 of 15 ( Start time: 11:21:42 PM ) Total Marks: 1
In a production process, all inputs are increased by 10%; but output increases more than 10%. This means that the firm experiences:
Select correct option:
Decreasing returns to scale.
Constant returns to scale.
Increasing returns to scale.
Negative returns to scale.
\Question # 13 of 15 ( Start time: 11:22:29 PM ) Total Marks: 1
The output level in long run is determined by:
Select correct option:
Aggregate demand.
Aggregate supply.
The government.
Money supply.
Question # 14 of 15 ( Start time: 11:23:38 PM ) Total Marks: 1
If the price elasticity of demand for beans is estimated to be -0.4, then a 20% increase in price will decrease the quantity demanded by:
Select correct option:
14%.
8%.
16%.
20%.
Question # 15 of 15 ( Start time: 11:24:10 PM ) Total Marks: 1
What is the reason of leftward shift in the demand curve for product A?
Select correct option:
A decrease in income if A is an inferior good.
An increase in income if A is a normal good.
An increase in the price of a product that is a close substitute for A.
An increase in the price of a product that is complementary to A.