6. What arguments may be given against government intervention in the location of
industry?
a) Reduction in congestion
b) The achievement of balance regional development
c) Redistribution of income and wealth equitable
D) Increase in government expenditure
7. A firm cost function:TC = 225 + 5Q, where Q stands for the level of output. What
is the fixed cost of producing 10 units?
a) 250
b) 225
c) 275
d) Cannot be determined
8 In which of the following will you encourage a firm to continue producing at a lost in the short 7 run?
a) When its total revenue is less than total costs
b) When MR is more than MC
c) When its price is less than average variable cost
di When its price is more than average variable cost
9.What would a rational consumer do in order to return to equilibrium if he finds himself the followmg situation:
MUx/Px > MUy/Py Where MUx and Px are the marginal utiiity and price of goods x, and MUy and Py the marginal utility and price of good
y respectively.
a) Buy less of goods y
b) Reduce the purchase of goods x and increase good y
c) Buy more ofgood x and reduce purchase of goods y
d} Buy only good y
10. lf the demand for an agricultural product is more elastic than its supply, this will
give rise to a cobweb known as:
a) Constant cobweb
b) Exploding cobweb
c) Convergent cobweb
d) Divergent cobweb