Economics Question Paper

QUIZ 2

Post Graduate Programme in Management (Section ‘E’) 2009-10 Time 1 hour
Instructions Total Marks 40

1. Exam is closed book
2. All questions in Part A and in Part B are compulsory
3. Each question in Part A carries 1 mark & each Question in Part B carries 10 marks
4. All Questions to be answered in the Question Booklet

1. In the diagram above, d and MR represent, respectively, the demand curve and the marginal revenue curve of an oligopolist. The kink in the demand curve means that the firm will
a. match any price increase above P1, but will not match any price decrease below P1.
b. not match any price increase above P1, but will match any price decrease below P1.
c. match any price increase above P2, but will not match any price decrease below P2.
d. not match any price increase above P2, but will match any price decrease below P3.
e. match any price increase above P2, but will not match any price decrease below P3.

ANS: B

2. In the diagram above, d and MR represent, respectively, the demand curve and the marginal revenue curve of an oligopolist. The firm producing Q units of output is earning profits equal to the area
a. 0P1 times 0Q.
b. P1P3 times 0Q.
c. P1P2 times 0Q.
d. P2P3 times 0Q.
e. cannot be determined

ANS: E

3. In the diagram above, d and MR represent, respectively, the demand curve and the marginal revenue curve of an oligopolist. Q0 is the output level at which
a. total revenue is maximized.
b. total revenue is minimized.
c. marginal revenue is minimized.
d. total output is maximized.

ANS: A

4. In the diagram above, d and MR represent, respectively,