ECO 232 (CBT 2)

Long-run __________ is a measure of the cost per unit of output produced.

Average cost

Marginal cost

Total cost

Variable cost

Which of the following industries most closely approximates the perfectly competitive model?

Automobile

Cigarette

Newspaper

Wheat farming

In deriving the utility-possibility curve, we make interpersonal comparisons of utility _______

Always

Sometimes

Never

Often

Which of the following factors would least likely to appear as a variable in the demand function?

Price of inputs

Income

Tastes

Expectations

The law of demand implies that __________

As quantity increases, price increases

As price increases, quantity increases

Everyone needs a certain number of items that are classified as necessities

Price and quantity are inversely related on a demand curve

A change in which of the following items will not cause a shift in the demand curve tyres.

The price of tyres

The price of automobiles

The price of petrol

Consumers resolve to drive fewer miles per year

Which of the following is not a property of the demand curve?

Positively slope

Snapshot at one point in time

An inverse relationship between price and quantity

A shift in the curve when one of the ceteris paribus variables changes

In general equilibrium ___________

All prices are assumed to be variable

Some prices are assumed to be fixed or constant

Most prices are assumed to constant (partial equilibrium)

Most prices are assumed to variable

If the supply curve of a commodity is positively sloped, a rise in the price of the commodity ceteris paribus, results in and is referred to as _________

An increase in supply

An increase in the quantity supplied

A decrease in supply

A decrease in the quantity supplied

A perfectly competitive economy will yield a Pareto efficient allocation of resources because __________

Prices adjust to clear each market

All participants are price taker

All participants optimize

All of the options

ECO 232 (CBT 2)

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