American International University – Bangladesh
Home work 2 Section –A
Part I: Multiple Choice Questions
1. Answer: B. resources.
2. Answer: A. Its revenue is sufficient to cover variable costs.
3. Answer: B. Its variable costs.
4. Answer: A. Diminishing returns to a fixed factor.
5. Answer: A. Average cost is equal to average revenue.
6. Answer: B. The difference between total cost and total revenue is greatest.
7. Answer: D. Average cost is minimized 3 .
8. Answer: D. A lower price for the good.
9. Answer: B. A means of ensuring a ...view middle of the document...
4. Answer: There government sets the floor price. Before setting the flood price, price of sugarcane was ‘Pe’ and quantity was ‘Qe’ and that’s the equilibrium point. Than government sets flood price for consumer subsidy and than price of sugarcane is ‘Pmax’ and demand is ‘Q2’ and supply is ‘Q1’.
5. Answer: Economic condition and production capacity determines whether a country export or import.
Export: If we have a option that we can sell our products in other market in good price we will definitely go for that market. If that market is outside of our country and we do business than its becomes Export.
Import : If something we don’t have in our market and we have demand for it and if we bring that product in our market outside of our country then its import. Sometimes we have some kind of products that’s cost us more to produce in our country. Then we import that product from other market because it is very cheaper to import that products.
Part III: Broad Question
1.Answer: A. A price ceiling is a government-imposed price control or limit on how high a price is charged for a product. Governments intend price ceilings to protect consumers from conditions that could make necessary...