Q.1	Supply curve
a)	is vertical in long run		c)	is same in the long run and short run
b)	is flatter in long run		d)	is horizontal in both long and short run
Q.2	The cost of one thing in terms of the alternative given up is called:
a)	Real cost		c)	Physical cost
b)	Production cost		d)	Opportunity cost
Q.3	If the quantity supplied exceeds quantity demanded producers will increase the price of that commodity.  True/ False
Q.4	Slope of the indifference curve is equal to the slope of Budget line at  …………………..
Q.5	A concave indifference curve implies that marginal rate of substitution decreases along the curve.     True/ False  Why?
Q.6	What is the formula for measuring Point elasticity of demand?
Q.7	What do you mean by Veblen goods?
Q.8	Define accounting costs.
Q.9	In a perfectly competitive market a firm in the long run operates at:
a)	AC=MC		c)	MR=MC
b)	AR=MR		d)	P=AR=MR=AC=MC
Q.10	Which of the following is not a long run concept?
a)	Expansion Path		c)	Returns to scale
b)	Isoclines		d)	Law of variable proportions

Answers:

1.       B

2.       D

3.       False. As supply increase price will decline.

4.       Equilibrium

5.       False. In fact MRS increases in concave shape. 

6.      (Change in quantity demanded/ Change in Price) x original Price/ Original Quantity

7.       Veblen good are prestigious goods which is exception to the law of demand.

8.       Accounting costs are explicit costs written in the account Books and paid by the firm.

9.       D

10.   D