Business Economics
291. Consider a demand curve which takes the form of a straight line cutting both axes. Elasticity at the mid-point of the line would be:
- Zero
- One infinite
- infinite
- Can not be calculated
Correct answer: (B)
One infinite
292. In case of Giffen goods, demand curve will slope:
- Vertical
- Horizontal
- Upward
- Downward
Correct answer: (C)
Upward
293. In the real business cycle model, business cycles are
- Efficient and do not represent lost output
- Driven by technology shocks
- Occur when markets clear
- All of the above
Correct answer: (D)
All of the above
294. New Keynesian economics differs from real business cycle economics in that
- Markets are perfectly competitive in new Keynesian models
- Business cycles are fluctuations in the natural rate of unemployment in new Keynesian models
- Wages and prices are perfectly flexible
- Agents maximize utility in the new Keynesian model
- None of these
Correct answer: (E)
None of these
295. Which of the following cannot be used to justify efficiency wages
- Sticky price(menu cost) models
- Turnover costs
- Worker shirking
- Worker morale
Correct answer: (A)
Sticky price(menu cost) models
296. Which of the following models view changes in real supply-side factors as determinants of short-run fluctuations in output and employment?
- New classical models
- Political business cycle models
- Keynesian models
- Real business cycle models
- None of the above
Correct answer: (D)
Real business cycle models
297. Which of the following statements are correct? In the insider/outsider model there is
- Unemployment due to the real wage being set above the market clearing level
- Cyclical unemployment in response to changes in aggregate demand
- Structural unemployment in response to hysteresis
- Both a and b
- All of the above
Correct answer: (E)
All of the above
298. When average product is falling, it is
- Less than the marginal product
- Not measurable in this case
- Greater than the marginal product
- Equal to the marginal product
Correct answer: (C)
Greater than the marginal product
299. Protectionism in the international trade stands for:
- Semi-restricted Trade
- Free trade policy
- Restricted Trade policy
- All of the above
Correct answer: (C)
Restricted Trade policy
300. Monopsony is a form of market organization in which there is a:
- Single buyer of an input
- Single seller of an output
- Single buyer of an output
- Single seller of an input
Correct answer: (A)
Single buyer of an input