PakQuizHub

1.What is the typical shape of a demand curve?

Flat (horizontal) lineStraight vertical lineSlopes downward from left to rightSlopes upward from left to right

2.What term describes a company earning profits beyond its normal profit level?

Profit calculated after considering opportunity costsRevenue minus explicit costsMinimum profit required to keep resources employedExcess profit over and above normal profitNone of the above

3.How does an increase in marginal cost affect output, and how does an increase in marginal revenue impact output?

4.Marginal revenue refers to the resulting from producing an additional of output.

Variation in average revenue when output risesChange in total revenue from selling one more unitDifference in average revenue after increasing output by one unitIncrease in total revenue as output growsChange in fixed costs with an increase in production

5.What are firms generally assumed to do with their costs and profits?

6.What term describes the added satisfaction gained from consuming an additional unit of a product?

7.What does the opportunity cost for a student represent?

The expenses for tuition and accommodationMoney borrowed from a financial institutionThe income foregone from the best possible job by choosing to study insteadThe salary expected after completing the degree

8.What is the expected effect on your demand for goods if both your income and the prices of those goods double?

9.Which term describes the responsiveness of the quantity demanded to changes in consumer income?

Demand sensitivity to price changesElasticity measuring demand response to related goods' pricesElasticity related to consumer budget adjustmentsElasticity reflecting demand variation with income shiftsNone of the above

10.What is the effect of a rise in consumption levels on aggregate supply or demand?

Cause aggregate supply to increaseCause aggregate supply to decreaseCause aggregate demand to increaseCause aggregate demand to decreaseNo effect on aggregate supply or demand

11.What is the effect of enhancing employee training on the aggregate supply curve?

Cause the aggregate supply curve to move rightwardCause the aggregate supply curve to move leftwardCause the aggregate demand curve to shift rightwardCause the aggregate demand curve to shift leftward

12.Which factor would lead to a rise in aggregate demand?

13.Which of the following scenarios would cause aggregate demand to rise?

A decrease in consumer spendingA reduction in business investmentA decline in export levelsA drop in the volume of importsAn increase in government taxes

14.If the price elasticity of supply is +4 and the price rises by 15%, what will be the new quantity supplied given the initial sales were 200 units?

15.What is the expected effect of increased productivity on the supply curve?

Cause the supply to decreaseResult in a growth of supplyCause the supply curve to shift outward, meaning more quantity supplied at every priceResult in a higher price equilibrium but a reduced equilibrium quantityHave no impact on supply

16.What is the effect of a rise in production costs on the supply curve?

Cause the demand curve to shift outwardCause the demand curve to shift inwardCause the supply curve to shift outward, increasing quantity supplied at every priceCause the supply curve to shift inward, reducing quantity supplied at every price

17.What is the price elasticity of supply for a supply curve that originates from the origin?

The price elasticity of supply is more than oneThe price elasticity of supply equals oneThe price elasticity of supply is less than oneThe price elasticity of supply is positiveThe price elasticity of supply is zero

18.When the price rises by 4% and the quantity supplied increases by 8%, how would you describe the supply elasticity?

The supply is elastic with respect to priceThe supply responds to changes in incomeThe price elasticity of demand equals -2The price elasticity of supply equals -2None of the above

19.Which of the following correctly describes the price and income elasticity of demand for a normal good?

Demand's price elasticity is negative, and income elasticity is also negative.Demand's price elasticity is positive, while income elasticity is negative.Demand's price elasticity is negative, and income elasticity is positive.Both price elasticity and income elasticity of demand are positive.None of the above.

20.What happens to total revenue when the demand for a product is price inelastic and the price is raised?

Raising the price will definitely increase profitsIncreasing the price causes total revenue to fallRaising the price leads to higher total revenueLowering the price results in fewer sales

Supply and Demand – MCQs