Start discussion for Economics P-32(doubtful questions and answers posted)

[dielectric constant]

1. GOVT. INCREASES THE MINIMUM WAGE FROM 350 PESOS TO 450 PESOS. WHICH REASON MIGHT EXPLAIN WHY THERE IS A RISE IN EMPLOYMENT FROM SUCH A WAGE RISE?

ANS: INVESTMENT GROWS AT A RAPID RATE THAN CONSUMPTION.

2. WHEN OUTPUT INCREASES, SRAC DECREASES AND OUPTUT INCREASES LRAC INCREASES.

ANS:- SRAC: ECONOMIES OF SCALE AND LRAC: DIMINISHING RETURNS.

3. GOVT REDUCES THE SPECIFIC TAX ON CIGARETTES. AS A RESULT, TAX REVENUE INCREASES.

ANS: CONSUMER SWITCHES TO DEARER BRANDS.

4. DUE TO ECONOMIC RECESSION, THERE IS A RISE IN UNEMPLOYMENT. WHAT MIGHT CAUSE A FALL IN LONG TERM RATE OF GROWTH?

ANS: THE LOSS ON CONSUMPTION DUE TO RECESSION WHICH CANNOT BE REGAINED.

5. DEADWIEGHT LOSS?

ANS: NLK

6. MINIMUM EARNINGS OF A LABOUR?

ANS: V+X

7. PPC CURVE?

ANS: F IS PRODUCTIVELY INEFFICIENT.

8. MAXIMUM AMOUNT OF LOANS THAT A BANK CAN CREATE?

ANS: $180000

9. BY HOW MUCH INVESTMENT HAVE TO BE INCREASED TO REACH FULL EMPLOYMENT?

ANS: $4 MILLION.

10. LOW INCOME, UPPER INCOME AND HIGH INCOME TABLE QUESTION?

ANS: INCOME INEQUALITY OF THE COUNTRY INCREASED BETWEEN THE PERIOD 2000 AND 2010.

11. BAR CHART QUESTION RELATED TO THE COMPONENTS OF AGGREGATE DEMAND?

ANS: GREATEST CONTRIBUTION: PRIVATE CONSUMPTION AND LEAST CONTRIBUTION: NET EXPORTS.

12. GOVT OF DEVELOPED COUNTRIES FORCED THEIR CITIZENS TO PAY A HIGHER PRICE FOR THE FARMING PRODUCTS OF DEVELOPED COUNTRIES. WHY MIGHT THIS POLICY BE HARMFUL FOR DEVELOPING COUNTRIES?

ANS: THIS WILL SLOWDOWN THE ECONOMIC DIVERSIFICATION OF DEVELOPING COUNTRIES.

13. HIGH PRESENT GROWTH OF A COUNTRY RESULTS IN THE EXCESSIVE DEPLETION A ND EXTRACTION OF MINERAL OIL AND RESERVES. WHAT THIS “FAILED” TO TAKE INTO ACCOUNT?

ANS: THE EFFECTS OF INCREASING PRICES ON THE DISCOVERY AND EXTRACTION OF NEW RESERVES.

14. WHAT CAN INCREASE IN MARGINAL TAX RATES ESULT?

ANS: STRENGTHEN THE OPERATION OF AUTOMATIC STABILISERS TO WORK MORE EFFECTIVELY.

15. DEVALUATION OF POUND STERLING? WHAT IS THE RESULT?

ANS: INCREASE IN THE SUPPLY OF FOREIGN WORKERS WHO SEEK PAID EMPLOYMENT IN THE UK DURING THE SUMMER TIME.

16. WHAT MIGHT RESULT IN FALL IN THE LEVEL OF INVESTMENT ACCORDING TO THE ACCELERATOR MODEL?

ANS: A DECREASE IN THE RATE OF GROWTH OF NATIONAL INCOME.

17. WHAT COULD CAUSE A DECREASE IN AGGREGATE DEMAND?

ANS: A DECREASE IN GOVT. BUDGET DEFICIT.

18. RISE IN INTEREST RATES?

ANS: INCREASE IN EXCHANGE RATE.

19. TOTAL COST(GIVEN MARGINAL COSTS AND AFC)?
ANS: $190.

20. WHAT WILL CAUSE A DECREASE IN THE SURVIVAL OF SMALL FIRMS?
ANS: GROWING TECHNICAL ECONOMIES OF SCALE IN MANUFACTURING.

 

[acer786]

8

1. GOVT. INCREASES THE MINIMUM WAGE FROM 350 PESOS TO 450 PESOS. WHICH REASON MIGHT EXPLAIN WHY THERE IS A RISE IN EMPLOYMENT FROM SUCH A WAGE RISE?

ANS: INVESTMENT GROWS AT A RAPID RATE THAN CONSUMPTION.

2. WHEN OUTPUT INCREASES, SRAC DECREASES AND OUPTUT INCREASES LRAC INCREASES.

ANS:- SRAC: ECONOMIES OF SCALE AND LRAC: DIMINISHING RETURNS.

3. GOVT REDUCES THE SPECIFIC TAX ON CIGARETTES. AS A RESULT, TAX REVENUE INCREASES.

ANS: CONSUMER SWITCHES TO DEARER BRANDS.

4. DUE TO ECONOMIC RECESSION, THERE IS A RISE IN UNEMPLOYMENT. WHAT MIGHT CAUSE A FALL IN LONG TERM RATE OF GROWTH?

ANS: THE LOSS ON CONSUMPTION DUE TO RECESSION WHICH CANNOT BE REGAINED.

5. DEADWIEGHT LOSS?

ANS: NLK

6. MINIMUM EARNINGS OF A LABOUR?

ANS: V+X

7. PPC CURVE?

ANS: F IS PRODUCTIVELY INEFFICIENT.

8. MAXIMUM AMOUNT OF LOANS THAT A BANK CAN CREATE?

ANS: $180000

9. BY HOW MUCH INVESTMENT HAVE TO BE INCREASED TO REACH FULL EMPLOYMENT?

ANS: $4 MILLION.

10. LOW INCOME, UPPER INCOME AND HIGH INCOME TABLE QUESTION?

ANS: INCOME INEQUALITY OF THE COUNTRY INCREASED BETWEEN THE PERIOD 2000 AND 2010.

11. BAR CHART QUESTION RELATED TO THE COMPONENTS OF AGGREGATE DEMAND?

ANS: GREATEST CONTRIBUTION: PRIVATE CONSUMPTION AND LEAST CONTRIBUTION: NET EXPORTS.

12. GOVT OF DEVELOPED COUNTRIES FORCED THEIR CITIZENS TO PAY A HIGHER PRICE FOR THE FARMING PRODUCTS OF DEVELOPED COUNTRIES. WHY MIGHT THIS POLICY BE HARMFUL FOR DEVELOPING COUNTRIES?

ANS: THIS WILL SLOWDOWN THE ECONOMIC DIVERSIFICATION OF DEVELOPING COUNTRIES.

13. HIGH PRESENT GROWTH OF A COUNTRY RESULTS IN THE EXCESSIVE DEPLETION A ND EXTRACTION OF MINERAL OIL AND RESERVES. WHAT THIS “FAILED” TO TAKE INTO ACCOUNT?

ANS: THE EFFECTS OF INCREASING PRICES ON THE DISCOVERY AND EXTRACTION OF NEW RESERVES.

14. WHAT CAN INCREASE IN MARGINAL TAX RATES ESULT?

ANS: STRENGTHEN THE OPERATION OF AUTOMATIC STABILISERS TO WORK MORE EFFECTIVELY.

15. DEVALUATION OF POUND STERLING? WHAT IS THE RESULT?

ANS: INCREASE IN THE SUPPLY OF FOREIGN WORKERS WHO SEEK PAID EMPLOYMENT IN THE UK DURING THE SUMMER TIME.

16. WHAT MIGHT RESULT IN FALL IN THE LEVEL OF INVESTMENT ACCORDING TO THE ACCELERATOR MODEL?

ANS: A DECREASE IN THE RATE OF GROWTH OF NATIONAL INCOME.

17. WHAT COULD CAUSE A DECREASE IN AGGREGATE DEMAND?

ANS: A DECREASE IN GOVT. BUDGET DEFICIT.

18. RISE IN INTEREST RATES?

ANS: INCREASE IN EXCHANGE RATE.

19. TOTAL COST(GIVEN MARGINAL COSTS AND AFC)?
ANS: $190.

20. WHAT WILL CAUSE A DECREASE IN THE SURVIVAL OF SMALL FIRMS?
ANS: GROWING TECHNICAL ECONOMIES OF SCALE IN MANUFACTURING.

Are u sure about these answers ?

 

[dielectric constant]

90% except the first three!!!!

 

[acer786]

Whats your source of authenticity ?

 

[acer786]

And btw économies of scale are always in long run NOT in short run ...plus ..your ans regarding rax on cig doesnt rig à bell to me because specific tax e.g of $2 is same whether à dearer or cheaper brand of cig ..ur ans would have made sensé if there was ad valorem tax..
And the mcq about total Cost ..we were given afc so we could find out fc ...and add the marginal Cost in it to get total cost..ans would be 70..

 

[omerjawaid]

Many of the answers are not correct..

 

[acer786]

Please refrain from blunt and unreliable answers. (À humble request)

 

[acer786]

Many of the answers are not correct..

I second that

 

[dielectric constant]

And btw économies of scale are always in long run NOT in short run ...plus ..your ans regarding rax on cig doesnt rig à bell to me because specific tax e.g of $2 is same whether à dearer or cheaper brand of cig ..ur ans would have made sensé if there was ad valorem tax..
And the mcq about total Cost ..we were given afc so we could find out fc ...and add the marginal Cost in it to get total cost..ans would be 70..

increasing returns or decreasing returns definitions contains that percentage change in input to percentage change in output. but do u have any information about inputs in question. of course not!!!

 

[dielectric constant]

And btw économies of scale are always in long run NOT in short run ...plus ..your ans regarding rax on cig doesnt rig à bell to me because specific tax e.g of $2 is same whether à dearer or cheaper brand of cig ..ur ans would have made sensé if there was ad valorem tax..
And the mcq about total Cost ..we were given afc so we could find out fc ...and add the marginal Cost in it to get total cost..ans would be 70..

AFC=TFC/Q. so TFC = 6*5=30. TFC is fixed. so if u need to find the total cost of 5 units u have add up all the MC and lastly add a 30 to ur answer(coz TFC is independent of output). then answer comes 190.

TC changes only bcoz of rising MC.and TFC is fixed.

btw, TC of 5 units means the cost of producing 1,2,3,4 and the 5th unit+ TFC....

 

[Gibzy Khan]

 

[Gibzy Khan]

I think most answers are wrong!

 

[acer786]

AFC=TFC/Q. so TFC = 6*5=30. TFC is fixed. so if u need to find the total cost of 5 units u have add up all the MC and lastly add a 30 to ur answer(coz TFC is independent of output). then answer comes 190.

TC changes only bcoz of rising MC.and TFC is fixed.

btw, TC of 5 units means the cost of producing 1,2,3,4 and the 5th unit+ TFC....

increasing returns or decreasing returns definitions contains that percentage change in input to percentage change in output. but do u have any information about inputs in question. of course not!!!

Output was given as Well as short run Cost as Well as long run Cost which were the inputs Cost

 

[acer786]

Cis

AFC=TFC/Q. so TFC = 6*5=30. TFC is fixed. so if u need to find the total cost of 5 units u have add up all the MC and lastly add a 30 to ur answer(coz TFC is independent of output). then answer comes 190.

TC changes only bcoz of rising MC.and TFC is fixed.

btw, TC of 5 units means the cost of producing 1,2,3,4 and the 5th unit+ TFC....

t



Marginal Cost for 5 units was already given .all u had to do was to find fc and add it in mc

 

[dielectric constant]

Cis

t



Marginal Cost for 5 units was already given .all u had to do was to find fc and add it in mc

MC was given for each level of output, so to find TC of 5 units of output u have to add all the MC's and the TFC(30).

 

[dielectric constant]

Output was given as Well as short run Cost as Well as long run Cost which were the inputs Cost

have u seen any thing like change in the inputs(quantity) in the question. so how com increasing return be the answer!!!

 

[dielectric constant]

Cis

t



Marginal Cost for 5 units was already given .all u had to do was to find fc and add it in mc

tell me what do u mean by TC of producing 5 units of output? does ur answer comes like this: TC of producing first, second, third, fourth and fifth units of output....MC was given for 1,2,3,4 and 5 units. TC=mc1+mc2+mc3+mc4+mc5+TFC.

 

[dielectric constant]

how do

I think most answers are wrong!

u know!!!

 

[Gibzy Khan]

tell me what do u mean by TC of producing 5 units of output? does ur answer comes like this: TC of producing first, second, third, fourth and fifth units of output....MC was given for 1,2,3,4 and 5 units. TC=mc1+mc2+mc3+mc4+mc5+TFC.

 

[Gibzy Khan]

how do

u know!!!

my friend told me