eco401midterm2010paperssolvedbyafaaqshanibhainadeel

8/9/2019 ECO401MIDTERM2010PAPERSSolvedbyAfaaqShanibhainAdeel..

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Solved by afaaq shani bhai adeelAsslam O Alikum

ECO 401 MIDTERM PAPERS Solved by Afaaq Shani bhai n AdeelRemember Us In Your PrayersBes re!ar"#sMu$amma" A%aa&Mba ' r" (inan)e *rou+A%aa&,Tari&-ya$oo.)omO/ner /ebly)eum-!oo!le!rou+.)omA"min ///. /ebly)eum.)omMana!er ulearnin!+k-!oo!le!rou+s.)omSu+er Mo"eraor in $+233///.irualins+ire.)om3Islamaba"0'45'6764I% u like me $an raise your $an" /i$ me

I% no $an raise ur san"ar"T$a#s abou me 8 9

ECO401 current paper (May 2010)

Today Paper (26-05-2010)

MIDTERM EXAMINATION

Spring 2010

EO!01- E"ono#i"$ (Se$$ion - 2)Ti#e% 60 #in

Mar&$%'e$ion No% 1 ( Mar&$% 1 ) - P*ea$e "+oo$e one

,+i"+ o +e o**o.ing i$ a nor#ai/e $ae#en

► Intermediate microeconomics should be required of all economics

majors in order to build a solid foundation in economic theory.

► The minimum wage should not be increased, because to do sowould increase unemployment.

► Smoking should be restricted on all airline flights.

► A** o +e gi/en opion$

'e$ion No% 2 ( Mar&$% 1 ) - P*ea$e "+oo$e one

eeri$ pari$ #ean$%

► Equal access to public transportation.

► O+er +ing$ eing e3a*

► Other things not being equal.

► ll things considered.

http://vusolutions.blogspot.com/2010/05/eco401-current-paper-may-2010.htmlhttp://vusolutions.blogspot.com/2010/05/eco401-current-paper-may-2010.html


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A$ *ong a$ a** pri"e$ re#ain "on$an an in"rea$e in #oneyin"o#e re$*$ in%

► An in"rea$e in +e $*ope o +e dge *ine

► decrease in the slope of the budget line.

► An in"rea$e in +e iner"ep o +e dge *ine.► decrease in the intercept of the budget line.

'e$ion No% < ( Mar&$% 1 ) - P*ea$e "+oo$e one

T+e in"o#e ee" o a pri"e "+ange%

► Is always positi!e.

► Is always negati!e.

► May e po$ii/e or negai/e

► Is associated with a change in nominal income.


,+i"+ o +e o**o.ing i$ "on$idered o e a /aria*e "o$ in +e*ong rn

► E(penditures for wages.

► E(penditures for research and de!elopment.

► E(penditures for raw materials.

► A** o +e gi/en opion$


=============== ari$e$ .+en an in"rea$e in a** inp$ *ead$

o a #ore-+an-proporiona* in"rea$e in +e *e/e* o op ============= #ean$ +a a$ inp$ are added o +e

prod"ion pro"e$$ op in"rea$e$ proporiona**y

► E"ono#ie$ o $"a*e> "on$an rern$ o $"a*e

► )onstant returns to scale* decreasing returns to scale.

► #ecreasing returns to scale* economies of scale.

► Economies of scale* decreasing returns to scale.'e$ion No% 12 ( Mar&$% 1 ) - P*ea$e "+oo$e one

I i$o3an$ are $raig+ *ine$ i #ean$ +a%

► Only one combination of inputs is possible.

► There is constant returns to scale.

► Inputs ha!e fi(ed costs at all use rates.► T+e #argina* rae o e"+ni"a* $$iion o inp$ i$"on$an


o$$ deer#ine a** o +e o**o.ing EXEPT%

► De#and or a prod"


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► +irms beha!iour.

► -ow firms should e(pand

► +irms profitability.'e$ion No% 1! ( Mar&$% 1 ) - P*ea$e "+oo$e one

A +e proi-#ai#i?ing *e/e* o op #argina* proi%

► Is positi!e.► I$ in"rea$ing

► Is /ero.

► Is also ma(imi/ed.


A pere"*y "o#peii/e ir# #ai#i?e$ proi y inding +e*e/e* o prod"ion a .+i"+%

► Pri"e @ Margina* o$

► $rice 0 !erage Total )ost.

► !erage Total )ost 0 1arginal )ost.► $rice 23


A$ "o#pared o ei$ing ir#$ a ne. ir# enering in

#onopo*i$ #ar&e +a$%

► ig+ "o$$

► 4ow costs.

► Equal costs.

► &one of the gi!en options.


are*$ are *i&e*y o ai* .+en%

► The members adhere to their output quotas.

► The non5cartel members increase output.

► The members charge identical prices.

► None o +e gi/en opion$

'e$ion No% 1; ( Mar&$% 1 ) - P*ea$e "+oo$e one

,+i"+ o +e o**o.ing e$ epre$$e$ +e *a. o de#and

► higher price reduces demand.

► lower price reduces demand.

► A +ig+er pri"e red"e$ 3aniy de#anded► lower price shifts the demand cur!e to the right.'e$ion No% 1< ( Mar&$% 1 ) - P*ea$e "+oo$e one

I +e "ro$$ pri"e e*a$i"iy o de#and e.een .o good$ Xand B i$ po$ii/e> i #ean$ +a good$ are%


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► Independent.

► )omplements.

► S$ie$

► Inferior.


I +e in"o#e e*a$i"iy o de#and i$ 1C2 +e good i$%

► lu(ury.

► A nor#a* good ( no a *ry)

► n inferior good.

► %iffen good.'e$ion No% 21 ( Mar&$% 1 ) - P*ea$e "+oo$e one

I +e de#and "r/e or a good i$ do.n.ard $*oping +en +egood%

► 1ust be inferior.

► 1ust be giffen.► an e nor#a* or inerior.

► 1ust be normal.'e$ion No% 22 ( Mar&$% 1 ) - P*ea$e "+oo$e one

,+a i$ #ean y reedo# o enerpri$e in pre "apia*i$#

► I #ean$ +a $ine$$e$ are ree o prod"e prod"$ +a"on$#er$ .an

► It means that consumers are free to buy goods and ser!ices thatthey want.

► It means that resources are distributed freely to businesses.

► It means that go!ernment is free to direct the actions of businesses.


,+a 3e$ion$ are re*aed .i+ ep*anaion ,+a 3e$ion$are re*aed .i+ .+a og+ o e

► $ositi!e, negati!e.

► &egati!e, normati!e.

► Nor#ai/e po$ii/e

► $ositi!e, normati!e.

'e$ion No% 2! ( Mar&$% 1 ) - P*ea$e "+oo$e one

,+i"+ o +e o**o.ing .i** +appen i +e "rren #ar&e pri"ei$ $e e*o. +e #ar&e "*earing *e/e*

► T+ere .i** e a $rp*$ o a""#*ae► T+ere .i** e do.n.ard pre$$re on +e "rren #ar&epri"e

► There will be upward pressure on the current market price.

► There will be lower production during the ne(t time period.


,+a i$ #ean y +e er# i*iy


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► "seless.

► 6equire.

► &ecessary.

► Sai$a"ion


T+e oa* "o$ (T) n"ion i$ gi/en a$% T @ 200 5' ,+a i$+e /aria*e "o$

► 78.

► 7.

► 5 (200C')

► 9::.'e$ion No% 28 ( Mar&$% 1 ) - P*ea$e "+oo$e one

,+i"+ o +e o**o.ing i$ NOT in"*ded in +e pere"inor#aion a$$#pion o pere" "o#peiion

► )onsumers know their preferences.

► )onsumers know their income le!els.► )onsumers know the prices a!ailable.

► on$#er$ "an ani"ipae pri"e "+ange$'e$ion No% 2; ( Mar&$% 1 ) - P*ea$e "+oo$e one

,+i"+ o +e o**o.ing i$ TR7E or +ird-degree pri"e

di$"ri#inaion

► +arging dieren pri"e$ o dieren grop$ a$ed pon

dieren"e$ in e*a$i"iy o de#and

► )harging each consumer the same two part tariff.

► The use of increasing block rate pricing.

► )harging lower prices the greater the quantity purchased.

'e$ion No% 2< ( Mar&$% 1 ) - P*ea$e "+oo$e one

T+e go/ern#en "an reg*ae #onopo*ie$ o en$re +a +ey$e a pri"e .+ere +e AR "r/e iner$e"$ +e

► Margina* re/ene "r/e

► !erage !ariable cost.

► 1arginal cost cur!e.



A red"ed pri"e #ay e oered i yo y .o -$+ir$ in$eado $ one T+i$ i$ an ea#p*e o

► $erfect competition.► +irst5degree price discrimination.

► 1onopoly.

► Se"ond-degree pri"e di$"ri#inaion'e$ion No% 41 ( Mar&$% 1 ) - P*ea$e "+oo$e one

,+en dieren pri"e$ are "+arged o "$o#er$ .+o pr"+a$edieren 3aniie$ +i$ i$ an ea#p*e o


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► Se"ond-degree pri"e di$"ri#inaion

► +irst5degree price discrimination.

► 1onopoly.

► $erfect competition.

'e$ion No% 42 ( Mar&$% 1 ) - P*ea$e "+oo$e oneT+e de#and "r/e or egg$ i$ do.n.ard-$*oping Sdden*y +e

pri"e o egg$ de"rea$e$ ro# R$60C- per do?en o R$50C- perdo?en T+i$ .i** "a$e%

► The demand cur!e for eggs to shift leftward.

► 8uantity demanded of eggs to decrease.

► T+e de#and "r/e or egg$ o $+i rig+.ard

► 8uantity demanded of eggs to increase.


S*ope and e*a$i"iy o de#and +a/e

► direct relation.

► An in/er$e re*aion$+ip

► &o relation between slope and elasticity.


'e$ion No% 4! ( Mar&$% 1 ) - P*ea$e "+oo$e one

I yo $# +e #argina* i*iie$ oained y "on$#pion ro#

one ni o i/e ni$ o any "o##odiy yo .i** ge%► T+e #argina* i*iy or +e "on$#pion o +e i+ ni

► The marginal utility for the consumption of the si(th unit.

► The total utility for the consumption of the first fi!e units.

► The a!erage utility for the consumption of the first fi!e units.

'e$ion No% 45 ( Mar&$% 4 )

,+y +e #onopo*i$$ prod"e *o.er 3aniie$ a +ig+er pri"e$

"o#pared o pere"*y "o#peii/e ir#$

An$%1) 4arge initial fi(ed cost is in!ol!ed

2) $roduct differentiation or drabd loyalty4) 1onopolistic controls the supply of key factors of production

'e$ion No% 46 ( Mar&$% 5 )

,rie do.n any i/e $iaion$ in .+i"+ "are* "an $r/i/e

An$%


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1) )artel can sur!i!e when number of firms is small.2) ;hen the collusion is tacit or hidden not e(plicit.

4) The products are homogeneous.!) Industry is sable

5) There is opening among the firms regarding their production

process.6) %o!ernment's strictness in implementing antitrust law.

'e$ion No% 48 ( Mar&$% 5 )

Diereniae e.een eerna* e"ono#ie$ o $"a*e and eerna*di$e"ono#ie$ o $"a*e .i+ +e +e*p o ea#p*e$

An$%

Eerna* e"ono#ie$% These are the benefits which are accured toany firm in the presence of other firms. +or e(ample setting of credit

information bureaus by bank , ad!ertising by industry such as ri!alindustry.

#isco!ery of new techniques.

This type of economy occurs when an industry is hea!ily concentratedin a particular area.

Economies is a!ailable to all firms for e(ample construction of roads

Eerna* di$e"ono#ie$ o $"a*e %

These are the forces which causes the large firms to produce goods

and ser!ices at increased per unit costs.This type of scale occurs when an industry grows larger and shortageof skilled laor taking place and shortage of raw materials are the types

of e(ternal diseconomies.;hen a firm become large then super!ision of workers become difficult

and problem is created for management is taking place which cause

ad!erse effect on efficiency.

ECO 401 MIDTERM PAPERS Solved by Afaaq Shani bhai n AdeelRemember Us In Your PrayersBes re!ar"#s

Mu$amma" A%aa&Mba ' r" (inan)e *rou+A%aa&,Tari&-ya$oo.)omO/ner /ebly)eum-!oo!le!rou+.)omA"min ///. /ebly)eum.)omMana!er ulearnin!+k-!oo!le!rou+s.)omSu+er Mo"eraor in $+233///.irualins+ire.)om3Islamaba"


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0'45'6764I% u like me $an raise your $an" /i$ meI% no $an raise ur san"ar"T$a#s abou me 8 9

eco401midterm2010paperssolvedbyafaaqshanibhainadeel

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