FUNDAMENTALS OF COMMERCE UNIT-2

Contents

#1. If the price of a good falls and the quantity consumed increases, what is happening to the consumer's marginal utility and marginal cost?

#2. Which law of economics states that as a consumer consumes more units of a good, the additional satisfaction (marginal utility) from each successive unit will decrease?

#3. If the supply of a good is perfectly elastic, what does it mean?

#4. Which of the following is a component of GNP?

#5. The law of supply states that, all else being equal:

#6. Gross National Product (GNP) includes:

#7. Which of the following represents the total income earned by all factors of production in an economy?

#8. If a good is considered a superior good, what happens to its demand when consumer incomes increase?

#9. Which component of GDP includes spending by households on goods and services?

#10. Which of the following is NOT a characteristic of perfect competition?

#11. Which of the following is NOT a component of the income approach to calculating GDP?

#12. Which market structure typically results in the highest level of consumer choice and the lowest prices?

#13. If the price elasticity of supply is equal to 1, the supply is considered:

#14. If a 5% increase in the price of smartphones leads to a 10% decrease in the quantity demanded, what is the price elasticity of demand?

#15. What is the demand curve facing an individual firm in perfect competition?

#16. Which approach to measuring GDP focuses on the value-added by each firm in the production process?

#17. Who is known for defining macroeconomics as the study of the economy as a whole, including factors like inflation, unemployment, and economic growth?

#18. Which of the following is a microeconomic concept?

#19. The income elasticity of demand measures:

#20. If firms in a perfectly competitive market are earning economic profits in the long run, what will happen to the price in the industry?

#21. If the cross-price elasticity of demand for two goods is positive, it indicates that these goods are:

#22. If the price elasticity of supply is less than 1, the supply is considered:

#23. Which of the following is NOT included in the calculation of GDP?

#24. In which market structure do firms engage in non-price competition, such as advertising and product differentiation?

#25. In economics, luxury cars, high-end fashion, and fine dining are often classified as:

#26. What is the price elasticity of demand for a perfectly elastic demand curve?

#27. Which of the following is a characteristic of perfect competition?

#28. When a percentage change in price leads to more than percentage change in quantity demand is called _____:

#29. In perfect competition, what determines the price of the product?

#30. Marginal utility tends to:

#31. What is the formula for calculating GDP using the expenditure approach?

#32. What role do barriers to entry play in a perfectly competitive market?

#33. In a monopolistic competition market, products are:

#34. In the long run, what happens to the number of firms in a perfectly competitive industry if firms are earning economic profits?

#35. If the price of a product increases by 10%, and the quantity demanded decreases by 5%, what is the price elasticity of demand?

#36. In a perfectly competitive market, what is the level of market power that each individual firm possesses?

#37. Nominal GDP is:

#38. Which type of relationship exists between the prices of complementary goods and their demand?

#39. Macroeconomics often studies the relationships between:

#40. If a country's GDP grows by 3% from one year to the next, which of the following statements is true?

#41. In the calculation of GDP using the expenditure approach, what does "X - M" represent?

#42. Who is often referred to as the "father of national income accounting"?

#43. National income accounting measures the value of:

#44. What is a supply curve?

#45. What is the difference between GDP and GNP?

#46. Which of the following is an example of an oligopolistic industry?

#47. In the long run, a perfectly competitive firm will earn:

#48. Which market structure is characterized by a single seller with significant control over price and product?

#49. In the long run, what happens to the number of firms in a perfectly competitive industry if firms are incurring economic losses?

#50. Real GDP is:

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