Business Economics and Business and Commercial Knowledge - 6 mtp MTP

1. Which aspect of taxation involves Normative Economics? (a) the incidence of the tax (b) the effect of the tax on incentives to work (c) the “fairness” of the tax (d) all the above.

2. When the price of a substitute of commodity X falls, the demand for X: (a) rises (b) falls (c) remains unchanged (d) any of the above

3. If the quantity of a commodity demanded remains unchanged as its price changes, the coefficient of price elasticity of demand is: (a) >1 (b) =1 (c) <1 (d) 0

4. Aconsumer who is below the personal budget line: (a) is not spending all personal income (b) is spending all personal income (c) may be spending all personal income (d) is in equilibrium 5. — If the income elasticity of demand is greater than 1, the commodity is: (a) anecessity (b) a luxury (c) an inferior good (d) anon-related good 398 10. 11.

The substitution effect for a fall in the price of a commodity (ceteris paribus) is given by: (a) amovement up a given IC (b) amovement from a higher to a lower IC (c) amovement down a given IC (d) any of the above If the MRTSLK equals 2, then the MPK/MPL is: (a) 2 (b) 1 (c) 2 (d) 4 The MC curve reaches its minimum point before the AVC curve and the AC curve. In addition, the MC curve…