0707 Eco (CFA520)1 - Question Paper Economics (CFA520) :...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Question Paper Economics (CFA520) : July 2007 Answer all questions. Marks are indicated against each question. 1. At a local supermarket, the price of Simla apples varies every week. Mr. Mishra, who is a regular buyer of apples, spends exactly Rs.50 on apples every week, irrespective of the price. For Mr. Mishra, the price elasticity of demand for apples is (1 mark) (a) Perfectly elastic (b) Perfectly inelastic (c) Unit elastic (d) Relatively elastic (e) Relatively inelastic. < Answer > 2. Which of the following statements are false ? I. Elasticity of demand is graphically represented by the slope of the demand curve. II. Elasticity of demand increases, as one goes down along the demand curve. III. If the demand is inelastic, a decrease in price increases the total revenue of the firm. IV. Elasticity of demand is measured by dividing change in quantity demanded with the change in the price of the good. (1 mark) (a) Both (I) and (II) above (b) Both (II) and (III) above (c) (I), (II) and (III) above (d) (I), (II) and (IV) above (e) All (I), (II), (III) and (IV) above. < Answer > 3. When the quantity supplied of a commodity exceeds the quantity demanded at a given price, the price (1 mark) (a) Remains the same (b) Increases (c) Decreases (d) First increases, then decreases (e) First decreases, then increase. < Answer > 4. The demand curve is usually (1 mark) (a) Downward sloping from left to right (b) Upward sloping from left to right (c) U-Shaped (d) Horizontal straight line (e) Vertical straight line. < Answer > 5. If the demand equation is given as Q d = 100 – 4P and price is Rs.10, the point elasticity of demand is (2 marks) (a) –4.00 (b) –0.67 (c) –0.06 (d) –0.10 (e) –0.60. < Answer > 6. A product priced at Rs.900 has price elasticity of demand equal to 6. What is the marginal revenue? < Answer
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(2 marks) (a) Rs.700 (b) Rs.750 (c) Rs.800 (d) Rs.850 (e) Rs.900. > 7. Which of the following is/are not true regarding consumer surplus? I. Consumer surplus is helpful to the government in fixing taxes. II. Consumer surplus helps the monopolists in fixing price of a commodity. III. In case of imported products which are cheaper than domestic products the consumer surplus is less. IV. A higher consumer surplus indicates that the economy is stable. (1 mark) (a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (III) above (e) Both (II) and (IV) above. < Answer > 8. Which of the following statements is not true ? (1 mark) (a) The concept of total utility is subjective so it is very difficult to measure it (b) Beyond the satiety point the marginal utility will be negative (c) In terms of calculus the marginal utility of a good is the slope of the total utility function (d) Total utility is the difference between the marginal utilities of current and preceding units of the product (e) Marginal utility analysis explains the inverse relationship between the price and quantity demanded.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 07/20/2010 for the course ICFAI CFA taught by Professor Cfa during the Fall '09 term at Indian School of Business.

Page1 / 26

0707 Eco (CFA520)1 - Question Paper Economics (CFA520) :...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online