Economics Quiz 1 (B.Tech. ECE 2023)

The first big economic questions concern all of the following except

• What goods and services are produced?

• How are goods and services produced?

• For whom are goods and services produced?

• What determines the standard of living?

Isoquants are convex to the origin. This is possible because

• Money outlay of the entrepreneur is constant

• Marginal rate of technical substitution between labor (L) and capital (K) is decreasing

• It is not possible to have infinite number of combinations of two outputs

• Both (a) and (b) above

Economic growth is the result of all of the following EXCEPT

• Investment in human capital.

• Technological change.

• Opportunity cost.

• Capital accumulation

Individual economic decisions are coordinated by

• Government through adjustments in sales taxes.

• Markets through adjustments in sales levels.

• Government through adjustments in income taxes.

• Markets through adjustments in prices.

The term "market" refers to

• Trading arrangements that have been approved by the government.

• Locations where buyers and sellers physically meet.

• Any arrangement that enables buyers and sellers to get information and trade with one another.

• Physical structures only.

If a country decreases current consumption to increase the amount of capital goods it produces today, then it

• Must not have private ownership of property and will have to follow planning authorities decisions today and in the future.

• Must be producing along the production possibilities frontier today and will see a shift outward of the frontier in the future if produces more capital goods.

• Must be using resources inefficiently today but will be more efficient in the future.

• Must be producing outside the production possibilities frontier and will continue to do in the future.

Assumptions of the Indifference Curve theory are:

• Rationality

• Ordinality

• Diminishing MRS

• All of the above

The arc elasticity formula is used to estimate elasticity when

• The product is thought to be inelastic.

• The product is thought to be elastic.

• The demand function is known.

• There are two observations of price and quantity.

• None of the above.

The price elasticity of demand is the same thing as the negative of the

• Slope.

• Reciprocal of slope.

• The first derivative of the demand function.

• Reciprocal of slope times the ratio of price to quantity.

• All of the above.

An elasticity coefficient of -1 means that

• The demand curve is perfectly inelastic.

• The demand curve is perfectly elastic.

• The relative changes in price and quantity are equal.

• Expenditures on the good would increase if prices were reduced.

• Expenditures on the good would decrease if prices