Question

1. Suppose that the supply curve is given by P = 4Q. What is the price elasticity of supply?

A

A. 1/4

B

1/2

C

1

D

2

E

4

2. A pecuniary diseconomy occurs when

A

supply exceeds demand.

B

an expansion of industry output increases the price of an input.

C

the actions of one firm harm another.

D

a firm produces non-marketed pollutants as well as its marketed output.

3. In the long run, for a competitive firm in a constant cost industry,

A

the firm is at the lowest point on its short run average cost curve.

B

the firm is at the lowest point on its long run average cost curve.

C

marginal cost equals price.

D

all answers

4. If the mean of a random variable is 5, what is its expected value?

A

5

B

5/N

C

the sum of 5 divided by the number of observations.

D

cannot be determined.

5. If the expected value of a random variable X is 10, what is E(5+X)

A

10

B

15

C

35

D

We need the probability of X=10.

A discrete random variable follows a

A

probability mass function

B

probability density function

C

discrete density function

D

normal mass function

Answer 1

Q1 C) 1 Q2 Pecuniary diseconomies are diseconomies arising from increases in prices of inputs caused by expansion in demand of firms which use them

Therefore,the correct answer is b)an expansion of industry output increases the price of an input

Q3 In Perfect Competition under Constant Cost Industry,At the output , MC = AC = Price.

Therefore the Correct Answer is C) Marginal Cost equals Price

Q4

When there is random variable involved, Mean value is equal to the Expected Value.

Thus ,the answer is A) 5

Q5

We know, E( aX+b) = aE(X) + b

Therefore E( X+5) = E(X) + 5 = 10+5 = 15

Therefore,the correct answer is B) 15

Q6 A discrete Random variable follows the Probability Mass function

Therefore,the correct answer is A) Probability Mass function