B. The Russian budget deficit has reached alarming levels due to crisis.

C. 10% of the population in Russia lives below poverty level.

D. Moscow had a budget surplus in 2007.

E. The students have paid $10000 as a tuition fee in ICEF.

19. Indifference curves that are convex to the origin reflect:

A. An increasing marginal rate of substitution

B. A decreasing marginal rate of substitution

C. A constant marginal rate of substitution

D. A negative marginal rate of substitution

E. A marginal rate of substitution that first decreases, then increases

20. The consumer's choice is optimal if his Marginal Rate of Substitution

A. Is equal to one

B. Equals the ratio of prices in case of interior equilibrium

C. Is zero

D. Equals the product of prices

E. Equals the ratio of prices

21. A firm's production is technologically efficient whenever:

A. Average total costs are minimized

B. Average variable costs are minimized

C. Marginal costs equal to marginal revenue

D. Costs are minimized for a given output level

E. All available resources are utilized

22. Vasya opens up his own economic consulting practice. The fee he charges per hour is $100. In order to start his own business Vasya quit his job which was paying $50,000 per year and cashed in a $10,000 certificate of deposit that would have yielded him 5% interest this year. During the first year, expenses for items such as paper and utilities totaled $5,000. If Vasya provides 1,000 hours of consulting services in his first year, then his economic profit equals:

A. $44,500

B. $35,000

C. $85,000

D. $94,500

E. $45,000

23. The rate at which a firm can substitute one factor for another while still producing the same level of output is known as the:

A. Degree of returns to scale

B. Marginal rate of substitution

C. Marginal rate of technical substitution

D. Marginal physical product

E. Marginal value product

24. A firm increases the number of hours its workers are employed from 7,000 to 8,000, and output increases from 140,000 bushels to 155,000 bushels. The marginal product of an extra hour is

A. 5

B. 10

C. 15

D. 20

E. 100

25. Refer to the figure below. Consider the isoquant for an output level of 300 units. The firm's amount of capital is 100 units in the short run. The user cost of capital is $200 per day, and the wage rate is $80 per day per worker. The variable cost of producing 300 units is equal to

A. $20,000 per day

B. $36,000 per day

C. $16,000 per day

D. $24,000 per day

E. $30,000 per day

26. In which of the following situations will a competitive firm be willing to produce?

A. SR; TR > VC for some Q > 0

B. LR; TR = TC for some Q > 0

C. LR; min(AC) < MR

D. All of the above

E. None of the above

27. Which of the following is NOT a defining feature of perfect competition?

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