ECO401 VU Quiz No 3 Spring 2012

Question # 1 of 10 ( Start time: 12:22:29 AM ) Total Marks: 1
————— is the rate at which a firm can substitute capital for labor and hold output constant.
Select correct option:

Diminishing marginal returns
Marginal rate of substitution
Marginal rate of production
Marginal rate of technical substitution

Question # 2 of 10 ( Start time: 12:23:48 AM ) Total Marks: 1
An increase in the total output of a country over time is called:
Select correct option:

Economic growth
Economic development

farm can produce 100 kilogram of apples per year with 2 workers and 400 kilogram of apples per year with 3 workers. The marginal product of the third worker is:
Select correct option:

100 kilogram.
300 kilogram.
400 kilogram.
500 kilogram.

Question # 4 of 10 ( Start time: 12:26:12 AM ) Total Marks: 1
According to the Real Business Cycles (RBC) School, fluctuations in output occur because of:
Select correct option:

Change in price level.
Change in technology.
Change in aggregate demand.
Unanticipated change in demand management policies.

Question # 5 of 10 ( Start time: 12:27:40 AM ) Total Marks: 1
Suppose the consumption function is C = 200 + 0.6 Yd. What is marginal propensity to consume?
Select correct option:


Question # 6 of 10 ( Start time: 12:29:08 AM ) Total Marks: 1
A risk neutral person always has ___________ marginal utility of income.
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Question # 7 of 10 ( Start time: 12:30:38 AM ) Total Marks: 1
ABC Company is running a business of car manufacturing and finds sharp increase in prices of spare parts which in turn increases cost of manufacturing cars. This increase in cost of production will:
Select correct option:

Shift demand curve for cars to the right.
Shift demand curve for cars to the left.
Shift supply curve for cars to the left.
Bring no change in demand or supply curves for cars.

Question # 8 of 10 ( Start time: 12:32:05 AM ) Total Marks: 1
The saving function is:
Select correct option:

The level of planned saving for every change in disposable income.
The level of planned saving at different levels of disposable income.
The ratio of total saving to total disposable income.
The ratio of a change in planned saving to a change in disposable income.

Question # 9 of 10 ( Start time: 12:33:31 AM ) Total Marks: 1
Suppose supply of agricultural products is price inelastic and government decides to increase taxes on agricultural products. More of the tax burden in this case would fall on:
Select correct option:

Both producers and consumers.

Question # 10 of 10 ( Start time: 12:35:00 AM ) Total Marks: 1
If marginal product is below average product:
Select correct option:

The total product will fall
The average product will fall
Average variable costs will fall
Total revenue will fall