Question : Marginal Rate of Transformation =
Option 1: Number of units sacrificed : Number of units gained
Option 2: Number of units gained : Number of units sacrificed
Option 3: Number of units sacrificed : Number of units foregone
Option 4: Number of units attainable : Number of units gained
Correct Answer: Number of units sacrificed : Number of units gained
Solution : Marginal Rate of Transformation (MRT) is the ratio of number of units of a commodity sacrificed to gain an additional unit of another commodity. Hence, the correct option is 1.
Question : Why Marginal Opportunity Cost (MOC) is increasing?
Option 1: More and more units of a commodity is sacrificed to gain an additional unit
Option 2: Less and less units of a commodity is sacrificed to gain an additional unit
Option 3: More and more units of a commodity is gained to sacrifice an additional unit
Option 4: Both 2 and 3
Question : The indifference curve's slope is calculated using:
Option 1: Marginal Rate of Substitution
Option 2: Marginal Opportunity Cost
Option 3: Marginal Rate of Transformation
Option 4: None of these
Question : According to the cardinal theory of consumer's equilibrium, utility is measured in:
Option 1: Marginal units
Option 2: Monetary terms
Option 3: Ordinal units
Option 4: Cardinal units
Question : As the number of investments made by the firm increases, its internal rate of return
Option 1: declines due to diminishing marginal productivity
Option 2: decline because the market rate of interest will fall, ceteris paribus
Option 3: increase to compensate the firm for the current consumption foregone
Option 4: increase because the level of savings will fall
Question : If the side of a square is $\frac{1}{2}(x+1)$ units and its diagonal is $\frac{3-x}{\sqrt{2}}$ units, then the length of the side of the square would be:
Option 1: $\frac{4}{3}$ units
Option 2: $\frac{1}{2}$ unit
Option 3: 1 unit
Option 4: 2 units
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