Institute of Chartered Financial Analysts of India (ICFAI) University 2007 Certification Finance Economics (CFA520): - Question Paper

(a) Increasing marginal utility
(b) Decreasing marginal utility
(c) Zero marginal utility
(d) Negative marginal utility
(e) Indeterminate marginal utility.
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8. The difference ranging from the price an individual is willing to pay and the price he or she truly pays is
(1 mark)
(a) Producer cost
(b) Monopolist profit
(c) Economic profit
(d) Producer surplus
(e) Consumer surplus.
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9. Marginal utilities of goods A and B are 500 utils and 1,000 utils respectively. The price of good B is
Rs.200. If the consumer is in equilibrium, the price of good A is
(1 mark)
(a) Rs. 60
(b) Rs. 70
(c) Rs. 80
(d) Rs. 90
(e) Rs.100.
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10. If the avg. product of labor (APL) is 30L – L2, the maximum possible total product (TPL) is
(2 marks)
(a) 2,000 units
(b) 4,000 units
(c) 6,000 units
(d) 8,000 units
(e) 12,000 units.
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11. avg. productivity of labor for a firm is 50 when labor employed is 100 units. When labor employed
is increased to 104 units, avg. productivity of labor declines to 48 units. At current input level the
marginal productivity of labor is
(1 mark)
(a) –1 unit
(b) –2 units
(c) one unit
(d) two units
(e) five units.
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12. Production function for a firm is Q = 100L – 0.1L2. If 10 units of labor are used, avg. productivity of
labor is
(a) 90 units
(b) 99 units
(c) 100 units
(d) 200 units
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(1 mark)
(e) 220 units.
13. Which of the subsequent represents the Marginal Rate of tech. Substitution (MRTS)?
(1 mark)
(a) Slope of the isocost curve
(b) Slope of the indifference curve
(c) Slope of the isoquant curve
(d) Slope of the budget line
(e) Slope of the avg. cost curve.
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14. Maximum point on the avg. product curve is reached when
(1 mark)
(a) Marginal product is zero
(b) Marginal product is maximum
(c) Marginal product is minimum

Earning:   Approval pending.