total revenue will rise. a) -1. 34 The economist’s objections to monopoly rest on which of the following grounds? a) Consumer price rises, producer price falls, and quantity increases. a) I and II only. Overall you need 80% to achieve a … I. C Elasticity of demand is infinite. b) Consumer price falls, producer price falls, and quantity increases. greater than one. d) Consumers will pay a price of $30, quantity sold will be 40 units, of which none are imported. II. The capital that is consumed by an economy or a firm in the production process is known as: 27. c) If demand is perfectly inelastic, then revenue is the same at any price. 30. A Floating exchange rate system works on the market mechanism, B Floating exchange rate breeds uncertainties and speculation, C Economic and political factors and value judgments influence the choice of the exchange rate system, D The system of floating exchange rate requires comprehensive government intervention, Answer: The system of floating exchange rate requires comprehensive government intervention. 35 In which of the following market structure is the degree of control over the price of its product by a firm very large? d) I, II and III. 12. Which of the following CANNOT reduce the equilibrium quantity sold in a market? If a tariff of $2 is introduced, then: a) Imports will decrease and social surplus will increase. Topic 1: Introductory Concepts and Models. c) I, II and III. Required fields are marked *. Use the demand curve diagram below to answer the following TWO questions. Assume no externalities, a) Consumer and producer surplus increase but social surplus decreases. Answer: If two demand curves are linear and intersecting each other then coefficient of elasticity would be same on different demand curves at the point of intersection. Which of the following correctly describes the resulting decrease in MARKET surplus? b) 1. b) The decrease in quantity will be smaller, if demand is D1 than if demand is D2. c) Both a) and b). c) Lower incomes for providers of medical services. c) One. Solutions: Case Study - The Housing Market, Topic 4 Part 2: Applications of Supply and Demand, Solutions: Case Study - Automation in Fast Food, Introduction to Environmental Protection and Negative Externalities, Solutions: Case Study - The Liberal Gas Tax, Introduction to Cost and Industry Structure, 7.4 The Structure of Costs in the Long Run. The elasticity of demand of durable goods is: 21. c) -1. 37 Which among the following is NOT correct? D)1.40. 7. 20. 100 a week on ice cream, we conclude that: 31 When cross elasticity of demand is a large positive number, one can conclude that: 32 Price and demand are positively correlated in case of: D Quantity of the good offered for sale at a particular price per unit of time, Answer: Quantity of the good offered for sale at a particular price per unit of time. a) The deadweight loss from the price floor will be greater than the deadweight loss from the price ceiling. 0. If government introduces a constant per-unit tax on socks, then which of the following statements is FALSE, given the after-tax equilibrium in the sock market? b) The availability (or lack thereof) of close substitutes for the good in question. Latest Economics MCQs. 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