Question

1) With regard to demand, Alfred Marshall

         a.      believed that the phenomenon known as diminishing marginal utility had little to do with downward-sloping demand curves.

         b.      stated that “the amount demanded increases with a fall in price, and diminishes with a rise in price.”

         c.       declared consumer surplus non-existent.

         d.      all of the above.

2) It was Alfred Marshall who pointed out that elasticity of demand tends to be great(er)

         a.      when a good has a high price relative to the size of the buyers’ incomes.

         b.      the more a good can serve as a substitute for other goods.

         c.       both of the above.

         d.      none of the above.

3) Alfred Marshall suggested that supply of a product may be close to perfectly inelastic

         a.      in the so-called immediate present.                 c.       in the so-called long run.

         b.      in the so-called short run.                      d.         during hard times.

4) Which of the following statements is NOT correct?

         a.      If y = f(x), then y is the dependent variable – and usually represented on the vertical axis.

         b.      If Q = f(P), then Q is the dependent variable – and usually represented on the horizontal axis, thanks to Alfred Marshall.

         c.       It was Alfred Marshall who compared the forces of supply and demand in determining price to the blades of a pair of scissors cutting paper.

         d.      Marshall denied the existence of producer surplus.

5) With regard to the demand for labor, Alfred Marshall

         a.      identified it as a “derived demand” (similar to Menger’s “theory of imputation”).

         b.      described it as being more elastic if there are few substitutes available.

         c.       both of the above.

         d.      none of the above.

6) Alfred Marshall theorized that

         a.      optimal firm size within a given industry may increase due to internal economies.

         b.      optimal firm size within a given industry may increase due to external economies.

         c.       increasing returns to scale can result in a downward-sloping long-run supply curve – and lower prices.

         d.      all of the above.

7) Alfred Marshall was known to have a sincere and profound interest in

         a.      presidential politics.

         b.      the problem of poverty.

         c.       hip-hop music.

Answer 1

Answer1: Option B. "stated that “the amount demanded increases with a fall in price, and diminishes with a rise in price.”

Reason: the amount demanded increases with a fall in price and diminishes with a rise in price" (Alfred Marshall).

Answer 2: Option D, None of the above

Reason: As per A Marshall : "The elasticity or responsiveness of demand in a market is great or small according as the amount demanded increases much or little for a given fall in price and diminishes much or little for a given rise in price.

Answer 3: Option B   in the so-called short run.    

Reason: Supply is likely to be price inelastic in the short run because it may be difficult for coffee farmers to expand output and to increase their use of factors of production such as land and capital. In the short run at least one factor input is assumed to be fixed, for example the available stock of capital equipment.

Answer 4: OPtion B " If Q = f(P), then Q is the dependent variable – and usually represented on the horizontal axis, thanks to Alfred Marshall."

Reason: In most disciplines, the independent variable appears on the horizontal axis. And here depedent variable "Q" and it is represented on the horizontal axis.

Answer 5: Option C " Both of the above"

Answer6: Option B " optimal firm size within a given industry may increase due to external economies."

Reason: External economies of scale happen because of larger changes within the industry, so when the industry grows, the average costs of business drop.

Answer7: Option B " The problem of poverty"

Reason:Marshall’s approach to poverty appears to be one of singular purpose, claiming on more than one occasion that resolving this social problem was his main focus as an economist. He regarded poverty as exerting negative influences throughout society –even to the extent of creating a new social class.