**A. 1.4**

B. 0.66

C. 0.75

D. 2.0

### Related Mcqs:

- Suppose that at a price of Rs 30 per month there are 30000 subscribers to cable television in small Town. If small Town Cablevision raise its price to Rs 40 per month the number of subscribers will fall to 20000 At which of the following price does small Town Cablevision earn the greatest total revenue ?
A. Rs 0 per month

**B. Rs 30 per month**

C. Rs 40 per month

D. Either Rs 30 or Rs 40 per month because the price elasticity of demand is 1.0 - When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?
A. supply-side economics

B. None of these answers

**C. The crowding-out effect**

D. The multiplier effects - Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The accounting profit at Naila’s pottery factory is ?
A. Rs30,000

B. Rs35,000

**C. Rs75,000**

D. Rs70,000 - Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The economics profit at Naila’s pottery factory is ?
A. Rs80,000

**B. Rs30,000**

C. Rs75,000

D. Rs70,000 - If the price elasticity of demand is unit then a fall in price ?
A. Reduces revenue

**B. Leaves revenue unchanged**

C. Increase revenue

D. Reduces costs - Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The income effect is represented by the movement from point ?
**A. X to point Y**

B. X to point Z

C. Y to point X

D. Z to point X - Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect is represented by the movement from point ?
**A. Z to point X**

B. X to point X

C. X to point Z

D. Y to point X - Suppose there is an increase in the both the supply and demand for personal computers Further, suppose the supply of personal computer increase more than demand for personal computers In the market for personal computers i the market for personal computers, we would expect ?
A. the change in the equilibrium quantity to be ambiguous and the equilibrium price to fall.

B. the equilibrium quantity to rise and the equilibrium price to rise

C. the equilibrium quantity to rise and the change in the equilibrium price to be ambiguous

**D. the equilibrium quantity to rise and the equilibrium price to fall**

E. the equilibrium quantity to rise and the equilibrium price to remain constant - Suppose the price level falls but suppliers only notice that the price of their particular product has fallen Thinking there has been a fall in the relative price of their product they cut back on production, This is a demonstration of the ?
**A. misperceptions theory of the short run aggregate supply curve**

B. classical dichotomy theory of the short run aggregate supply curve

C. sticky price theory of the short run aggregate supply curve

D. sticky wage theory of the short run aggregate supply curve - Suppose that ABC publishing sells an economics textbook and accompanying study guide. Raheel is willing to pay Rs75 for the text and Rs15 for the study guide. Mariam is willing to spend Rs60 for the text and Rs25 for the study guide. Suppose both the book and study guide have a zero-marginal cost of study production. If ABC publishing charges separate price for both products its best strategy is to charge price that when combined, total ?
A. Rs 85

**B. Rs 75**

C. Rs 80

D. Rs 60