ECO232
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Question: Returns to scale of a production function describe how its output responds to ___________ increases in all of its inputs.
Answer: Proportional

Question: The price ceiling produces the quantity exchanged in the market and creates_____.
Answer: Shortages

Question: Marginal Revenue Elasticity formula is given as___
Answer: P(1- 1/e)


Answer: P(1-1/e)

Question: A concept used to quantify the response in one variable when another variable changes is referred to as ___?
Answer: Elasticity

Question: The quantity that consumers are willing and able to buy at each price is called_____at that price
Answer: Quantity demanded

Question: The marginal-average relationship states that when a marginal value is above its corresponding average value, the average value will rise. When the marginal is below the average, the average value will _____
Answer: Fall

Question: Change in costs, input prices, technology, or prices of related goods and services leads to change in______
Answer: Price

Question: The locus of Pareto optimal efficient points in an Edgeworth Box diagram is referred to as ___
Answer: Contract curve

Question: A table showing how much of goods firms will sell at different prices is called ___
Answer: Supply Schedule

Question: The law of supply states that an increase in market price will lead to an increase in quantity _____
Answer: Supplied

Question: The relationship between the quantity of goods supplied and price is said to be ___
Answer: Positive

Question: The study of the behaviour of individual decision-making units and of the workings of individual markets, viewed in isolation is known as  __________ equilibrium.
Answer: Partial

Question: A concept used to quantify the response in one variable when another variable changes is referred to as ___?
Answer: Elasticity

Question: The Marginal Rate of Transformation (MRTyx) can be viewed as the amount of Y that must be given up to obtain a one unit increase in X production. True or False? ____.
Answer: True

Question: The three conditions in general equilibrium are consistent with ____ optimality in production and consumption.
Answer: Pareto

Question: ____ economics deals with comparing alternative states of the economy in order to determine which is better and which are worse.
Answer: Welfare

Question: Costs that changes with a firm’s output level are termed ____
Answer: Variable cost

Question: Utility in economics means ____
Answer: Satisfaction

Question: A combination of Fixed Cost and Variable Cost gives  ___
Answer: Total Cost

Question: Q = K<sup>a</sup>L<sup>b </sup>is known as a___ production function 
Answer: Cobb Douglas

Question: When Total Product is 0, Marginal Product is = ___
Answer: 0

Question: The concept "Law of demand" was first used by ____ 
Answer: Alfred Marshall

Question: The firm's variable costs are all costs that do change with its level of ____
Answer: Output

Question: The returns to scale of a production function describe how its output responds to proportional increases in all of its ___
Answer: Inputs

Question: In the short run, a firm has at least one ____ input 
Answer: Fixed

Question: Along the ___ line lies all input combinations that the firm can buy when itspends every bit of her budget
Answer: Isocost

Question: ___costs are the costs of using firm-owned resources
Answer: Implicit

Question: Costs that firms have incurred and cannot be reversed is known as ___ cost
Answer: Sunk

Question: A statement relating how inputs can be combined to achieve various possible levels of output is known as ___ function.
Answer: Production

Question: ____ criterion welfare was developed by Professor Tibor Sciotovisky.
Answer: Double

Question: Pollution of air as a result of firm's production activities is known as a ____ cost
Answer: Social

Question: A typical total product curve for a variable input first has a range of ___ marginal product
Answer: Increasing

Question: Mathematically, marginal product of labour is represented as
Answer: dQ/dL


Answer: ΔQΔL

Question: The Marginal Rate of Technical Substitution  is the rate at which one input can be substituted for another, while ___ remains constant.
Answer: Output

Question: Upward-sloping isoquants imply a _____ marginal product of one of the two inputs.
Answer: Negative

Question: A proportionate change in the quantity demanded of good X due to a proportionate change in the price of good Y is referred to as ___
Answer: Cross Elasticity

Question: The theory that revolves around the concepts of
demand and supply and the workings of the price system is known as ___.
Answer: <span lang="EN-IE">Microeconomics

Question: A measure of the responsiveness of demand to changes in the commodity's own price is referred to as ___
Answer: Price elasticity of demand

Question: At the point where Total Product is at maximum, Marginal Product is __
Answer: Zero

Question: The Negative relationship between price and quantity demanded is often referred to as the ___
Answer: Law of demand 

Question: The Law of ___ states that the marginal product of a variable input will eventually fall, if that input is used with one or more fixed input
Answer: Law of Diminishing Return

Question: The Marginal Rate of Technical Substitution is ___
Answer: The rate at which one input can be substituted for another, while output remains constant

Question: Marginal Product of Labour is defined as___
Answer: The rate of change of output with respect to change in labour while the amount of all other inputs remains constant

Question: A frontier showing all possible combinations of utility for two consumers when the economy is efficient in both production and consumption is known as ___
Answer: Grand Utility Possibilities Frontier

Question: In production, a period of time in which all of the inputs in a firm’s production function can be changed in amount is referred to as ___
Answer: Long run Period

Question: A production firm’s cost that changes in proportion with its level of output is referred to as ___
Answer: Variable Cost

Question: The term law of demand was first used by economist Marshall in his ___ textbook
Answer: 1890

Question: The movement along a supply curve is caused the change in quantity supplied brought by a change in ___.
Answer: Technology

Question: If the supply curve of a commodity is positively sloped, a rise in the price of the commodity all thing being equal, result in ___
Answer: an increase in the quantity supplied 

Question: The market demand curve for a commodity is obtained by the _________  summation of all the individuals’ demand curves for the commodity
Answer: Horizontal

Question: The economic theory of production assumes  ____ consumer  behavior
Answer: Rational

Question: The difference between total sales revenue and total cost of production known as ___
Answer: Profit

Question: The process in which only part of the market is considered is known as ____.
Answer: Partial equilibrium

Question: When there is a decrease in income for both farmers and bankers is , the demand for egg may ___
Answer: Fall

Question: Isoquants are negatively sloped. Meaning they are ___
Answer: Downward Sloping

Question: The ___ curve shows the optimal combinations of utility for two consumers, given the product mix of the economy
Answer: Utility possibility

Question: A reduction in price will increase total revenue when demand is __
Answer: Inelastic

Question: If the economy is to be efficient, it must move from any point on Edge worth box to a point on a ____________
Answer: Contract curve

Question: In the long run, we noted in the concept of production theory, all of the inputs of the production function are ___
Answer: Variable

Question: ___ is used to calculate elasticity between two points on a demand schedule or curve?
Answer: Arc Elasticity

Question: The transformation curve is derived from  __
Answer: The production contract curve

Question: Goods and service for which consumption by some individuals does not reduce the amount available for other is known as __
Answer: Public good

Question: The various combinations of utilities of two individuals that give society the same level of satisfaction is called ____.
Answer: Social welfare function

Question: Given Qd = 45 + 10Px and Qs = - 25 + 15Px, find the value of Px
Answer: 14

Question: The combining and organizing of economic resources that transforms them into a different but useful output is referred to as ___
Answer: Production Possibility Frontier

Question: Marginal revenue is positive when elasticity is ___
Answer: Greater than 1

Question: In deriving the utility-possibility curve, we make interpersonal comparisons of utility.
Answer: Never

Question: For a given input price ratio <em>PL/PK</em>, the path of tangency points between isocost<em> </em>line and isoquants is called _________
Answer: Expansion path

Question: ___ costs are the costs of using firm-owned resources
Answer: Implicit

Question: The negative relationship between price and quantity demanded is referred to as ___
Answer: Law of Demand