Classical

June 2015 - Paper 3

1:  

The demand function for commodity X, is QD=300-20P; where P is the price in rupees per unit and Qis the quantity demanded in units per period. Which of the following is the price level at which total revenue of a firm facing this demand function is maximized ?

A.

8.0

B.

7.5

C.

10.5

D.

12.5

 
 

Option: B

Explanation :


2:  

Match the production functions List - I with the return to scale List - II.

List – I
(Production function)

List – II

(Return to scale)

(a) Q = 10 K0.5L0.4E0.15M0.1

(i) increasing

(b) Q = 12 K0.5L0.5

(ii) constant

(c) Q = 100 K + 15 L

(iii) decreasing

(d) Q = 40 K0.3L0.5

 

 

A.

(ii) (ii) (i) (i)

B.

(i) (i) (ii) (ii)

C.

(ii) (i) (i) (iii)

D.

(i) (ii) (ii) (iii)

 
 

Option: D

Explanation :


3:  

It costs a firm Rs 90 per unit to produce product A, and Rs 60 per unit to produce B individually. If the firm can produce both products together at Rs 160 per unit of product A and B, this exhibits signs of:

A.

economies of scope

B.

diseconomies of scale

C.

diseconomies of scope

D.

economies of scale

 
 

Option: C

Explanation :


4:  

In the context of Prisoner's dilemma, which one of the following is correct?

A.

rational choices can lead to bad outcomes

B.

rational choices can lead to good outcomes

C.

co-operation can lead to sub - optimal results

D.

none of the above

 
 

Option: A

Explanation :


5:  

Find the most appropriate sequence of life-cycle of price for a product, from the initial stage to the mature stage.

A.

Target price→penetration prices→value - based price→limit price→niche price

B.

Penetration price→limit price→value - based price→target price→niche price

C.

Penetration price→target price→limit prices→value - based price→niche price

D.

Penetration price→niche price→target price→limit price→value - based price

 
 

Option: A

Explanation :




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