Top 80+ Solved MicroEconomics, Theory and Applications 2 MCQ Questions Answer
Q. Which of the following statements is correct about behavioural economics
a. it builds upon the standard economic model
b. it does not use the methodology of positive economics
c. it rejects the standard economic model
d. it is the same as economic psychology
Q. What is a Nash equilibrium
a. a strategy for each player such that total payoffs are maximized
b. a strategy for a person such that the person maximizes payoff given the strategies of others
c. a strategy that maximizes payoff
d. a strategy for each person such that everyone maximizes payoff given the strategies of others
Q. An outcome is Pareto efficient if
a. no person can be made better off without making someone worse off
b. everybody can be made better off
c. at least one person can be made better off
d. every person maximizes payoff given the payoff of others.
Q. The permanent increment to future consumption expressed as a fraction of the initialconsumption forgone is.....
a. rate of return
b. perpetual rate of return
c. expected return
d. all the above
Q. Diversifiable risk can be eliminated by
a. investing in many projects.
b. by holding the stocks of many companies.
c. both a and b
d. none of them
Q. Non diversifiable risk affects I. the opportunity cost of capital II. should enter into the risk premium
a. only i
b. only ii
c. both i &ii
d. none of them
Q. Several combination of commodities x and y that the economy can produce by fully utilizingall of the fixed amounts of labour and capital with the best technology available is depicted by I. production possibility frontier II. transformation curve III. production possibility curve
a. both i & ii
b. both ii & iii
c. both i & iii
d. all the above
Q. Who opined that economic growth meant bringing W closer to W*
a. walras
b. adamsmith
c. bentham
d. pareto
Q. Who argued that welfare is improved when ‘the greatest good (is secured) for the greatestnumber’
a. walras
b. adamsmith
c. bentham
d. pareto
Q. Which criterion refers to economic efficiency which can be objectively measured
a. ‘cardinalist’ criterion
b. bentham’s criterion
c. the pareto-optimality criterion
d. the kaldor-hicks ‘compensation criterion’
Q. The sum of forgone interest and depreciation costs the machine’s owner must pay is the
a. competitive rental rate
b. capital asset pricing
c. risk premium
d. all of the above
Q. The marginal conditions must be satisfied for the attainment of a Pareto-efficient situation inan economy :
a. efficiency in exchange
b. efficiency of production
c. efficiency in the product-mix, or composition of output
d. all the above
Q. Points where the slopes of the isoquants are equal
a. indifference curve
b. contract curve
c. production possibility curve
d. edgewoth box
Q. The set of all Pareto efficient allocations in an Edgeworth box diagram is called the
a. indifference curve
b. contract curve
c. production possibility curve
d. edgewoth box