- Individuals with concave utility function are said to be:
A) Risk lovers B) Risk aversion individuals
C) Risk neutral D) Neither risk loving nor risk aversion - Which of the following refers to the approach where the consumer chooses the
lowest budget line that touches a given indifference, rather than choosing the highest
indifference curve given a budget constraint?
A) Primal approach B) Compensating variation
C) Duality D) Consumer surplus - When α = 1/4 and β = 3/4 for the Cobb-Douglas production function, returns to
scale are:
A) Increasing B) Constant
C) Decreasing D) First decreasing and then increasing - —– refers to the driving of high-quality products out of the market by the
availability of low-quality products.
A) Lemon market problem B) Survival of the fittest
C) Market equilibrium D) Moral hazard - —– is a curve that describes the relationship between a firm’s cumulative output and
the amount of inputs needed to produce each unit of output.
A) Isocost curve B) Isoquant curve
C) Learning curve D) Expansion path - The production isoquants in engineering production functions are :
A) Kinked B) Straight lines with negative slopes
C) L shaped D) Convex to the origin - Consider a two-player game: a monopoly firm, D and a newly entering firm, C. Firm
C can challenge the monopoly by entering the market. If the challenger enters the
market, the monopoly can either yield by sharing the market, or set up a price war.
How many Nash equilibria does this game have?
A) 0 B) 1 C) 2 D) 3 - The duopoly model in which a continuous oscillation of the product price between
the monopoly price and the maximum output price of each firm takes place:
A) Edgeworth model B) Chamberlin model
C) Bertrand model D) Cournot model - The economist who assumed that profits depend on the degree of monopoly:
A) David Ricardo B) Karl Marx
C) Michał Kalecki D) Nicholas Kaldor
ECONOMICS KERALA SET
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