Description : Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its - (1) long-run marginal cost curve (2) long-run average cost curve (3) long-run average variable cost curve (4) long-run average revenue curve
Last Answer : (2) long-run average cost curve Explanation: Under perfect competition, the firms operate at the minimum point of long-run average cost curve. In this way, the actual longrun output of ... ideal output. This gives the mea-sure of excess capacity which lies unutilized under imperfect competition.
Description : Under perfect competition, the industry does not have any excess capacity because each firm produces at the minimum point on its (1) long-run marginal cost curve (2) long-run average cost curve (3) long-run average variable cost curve (4) long-run average revenue curve
Last Answer : long-run average cost curve
Description : Why does the Market tumble every time somebody somewhere sneezes?
Last Answer : Because traders are human beings subject to the same prejudices, gossip and herd think that the rest of us are.
Description : When does lowering taxes increase government revenue?
Last Answer : Economics is not an exact science. It is a lot of guesswork, There is no mutually agreed way to determine whether to raise or lower taxes; it is determined more by politics than by economics.
Description : Buoyancy of a tax is defined as - (1) percentage increase in tax revenue/ percentage increase in tax base (2) increase in tax revenue/ percentage increase in tax coverage (3) increase in tax revenue/increase in tax base (4) percentage increase in tax revenue/ increase in tax coverage
Last Answer : (3) increase in tax revenue/increase in tax base Explanation: Buoyancy means the growth/increase in tax collections. This is in line with the GDP growth within the economy, the industry profile and the tax ... rate and in the tax base in relation to the GDP is termed the buoyancy of the tax system.
Description : The difference between the GNP and the NNP is equal to the - (1) consumer expenditure on durable goods (2) direct tax revenue (3) indirect tax revenue (4) capital depreciation
Last Answer : (4) capital depreciation Explanation: Depreciation refers to two very different but related concepts: the decrease in value of assets (fair value depreciation), and the allocation of the cost of ... equal to capital depreciation. It is the wearing out, breaking down, or technological obsolescence.
Description : Equilibrium price in the market is determined by the - (1) equality between marginal cost and average cost. (2) equality between total cost and total revenue. (3) equality between average cost and average revenue. (4) equality between marginal cost and marginal revenue.
Last Answer : (4) equality between marginal cost and marginal revenue. Explanation: The equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded. This is the ... in equilibrium at the point of equality of marginal cost and marginal revenue. (MC = MR).
Description : The major objective of monetary policy is to - (1) increase government's tax revenue (2) revamp the Public Distribution System (3) Promote economic growth with price stability (4) weed out corruption in the economy
Last Answer : (3) Promote economic growth with price stability Explanation: The main objective of monetary policy is to control the supply of money, often targeting an inflation rate or interest rate ... usually to contribute to lower unemployment, and to maintain predictable exchange rates with other currencies.
Description : Which one of the following taxes is collected and utilized by the State Governments? (1) Personal income tax (2) Corporation tax (3) Land revenue (4) Custom duties
Last Answer : (3) Land revenue Explanation: The Constitution allocates the taxation of agricultural income to states. Lan revenue is a major source of revenue for states in India. For purpose of ... Commissioner, also known as Collector indicating his responsibility for the realization of all Government revenues.
Description : The sale proceeds of Government Bonds come under the budget head of - (1) Revenue Receipts (2) Current Expenditure (3) Capital Outlay (4) Capital Receipts
Last Answer : (4) Capital Receipts Explanation: Capital receipts are the funds received into the businesses that are not part of the operating activities of the establishment. Capital receipts primarily include external ... furniture, investment (long term) etc., which shall not be occurring all the time.
Description : Agricultural income tax is a source of revenue to - (1) Central Government (2) State Government (3) Local Administration (4) Centre and State Governments
Last Answer : (2) State Government Explanation: The Constitution of India allocates the taxation of agricultural income to states. Land revenue is a major source of revenue for states in India
Description : Taxes are as certain as the death, because - (1) They constitute the major source of government revenue. (2) Government have no other source of revenue. (3) Most PSUs are run inefficiently. (4) Government has its own budget constraints.
Last Answer : (1) They constitute the major source of government revenue. Explanation: Benjamin Franklin's utterance, "In this world nothing can be said to be certain, except death and taxes," when applied ... draws on the actual inevitability of death to highlight the difficulty in avoiding the burden of taxes.
Description : The 'break-even' point is where (1) marginal revenue equals marginal cost (2) average revenue equals average cost, (3) total revenue equals total cost (4) None of the above
Last Answer : (3) total revenue equals total cost Explanation: Break-even is the point of balance between making either a profit or a loss. In economics & business, specifically cost accounting, the break ... although opportunity costs have been "paid", and capital has received the riskadjusted, expected return.
Description : Which one of the following is not included in current revenue of the Union Government? (1) Tax revenue (2) Non-tax revenue (3) Loans (4) interest payments
Last Answer : (3) Loans Explanation: Loans are not included in the current revenue of the Union Government.
Description : An employer goes on employing more and more of a factor units until : (1) the Average Revenue Productivity becomes equal to Marginal Revenue Productivity. (2) the Marginal Revenue Productivity becomes ... into operation. (4) the Marginal Revenue Productivity of a factor becomes equal to its reward.
Last Answer : (4) the Marginal Revenue Productivity of a factor becomes equal to its reward. Explanation: 'According to the Marginal Productivity Theory, the reward or the price of a factor unit depends upon its ... marginal cost of the factor is greater than MRP, it will reduce employment to reduce its loss.
Description : Equilibrium output is deter-mined by: (1) the equality between total Variable cost and Marginal revenue. (2) the equality between Marginal cost and Marginal revenue. (3) the equality between Average cost and Average revenue. (4) the equality between total cost and total revenue.
Last Answer : (2) the equality between Marginal cost and Marginal revenue. Explanation: Equilibrium Output refers to the level of output where the Aggregate Demand is equal to the Aggregate Supply (AD = AS) in an ... because it adds to its profits. He stops producing more only when MC becomes equal to MR.
Description : The price of a commodity is the same as (1) Average revenue (2) Total cost (3) Average cost (4) Total revenue
Last Answer : (1) Average revenue Explanation: Average Revenue refers to revenue received per unit of output sold. It is the same as Price of the commodity. Average revenue can be obtained by dividing the total revenue by the number of units sold.
Description : Under Perfect Competition - (1) Marginal Revenue is less than the Average Revenue (2) Average Revenue is less than the Marginal Revenue (3) Average Revenue is equal to the Marginal Revenue (4) Average Revenue is more than the Marginal Revenue
Last Answer : (3) Average Revenue is equal to the Marginal Revenue Explanation: Perfect competition describes markets such that no participants are large enough to have the market power to set the price of a homogeneous ... , as output will always occur where marginal cost is equal to marginal revenue (MC=MR).
Description : A firm is in equilibrium when its (1) marginal cost equals the marginal revenue (2) total cost is minimum (3) total revenue is maximum (4) average revenue and marginal revenue are equal
Last Answer : (1) marginal cost equals the marginal revenue Explanation: A consumer is in a state of equilibrium when he achieves maximum aggregate satisfaction on the expenditure that he makes depending on the ... its production. In short run Marginal revenue = Marginal Cost is the condition of equilibrium.
Description : The 'breali-even point' is where - (1) marginal revenue equals marginal cost (2) average revenue equals average cost (3) total revenue equals total cost (4) None of these
Last Answer : (2) average revenue equals average cost Explanation: The break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one ... been made, although opportunity costs have been "paid", and capital has received the riskadjusted, expected return.
Description : The equilibrium of a firm under perfect competition will be determined when - (1) Marginal Revenue > Average Cost (2) Marginal Revenue > Average Revenue (3) Marginal Revenue = Marginal Cost (4) Marginal Cost > Average Cost
Last Answer : (3) Marginal Revenue = Marginal Cost Explanation: 173. (3) When the marginal revenue productivity of a factor is equal to the marginal- cost (MR=MC) of the factor, the firm will be in ... revenue and marginal revenue (P = AR = MR) is the standard condition for a perfectly competitive firm.
Description : The tax levied on gross sales revenue from business transactions is called - (1) Turnover Tax (2) Sales Tax (3) Capital Gains Tax (4) Corporation Tax
Last Answer : (1) Turnover Tax Explanation: A turnover tax is similar to a sales tax or a VAT, with the difference that it taxes intermediate and possibly capital goods. It is charged on gross ... turnover tax is levied on all intermediate transactions between businesses leading to and including the final sale.
Description : Exploitation of labour is said to exist when - (1) Wage = Marginal Revenue Product (2) Wage < Marginal Revenue Product (3) Wage > Marginal Revenue Product (4) Marginal Revenue Product =0
Last Answer : (2) Wage < Marginal Revenue Product Explanation: The term "exploitation" is used to denote the payment to labor of a wage less than its marginal revenue product. Under monopolistic competition, ... this sense. All firms hire labour until the marginal revenue product equals the marginal factor cost.
Description : If the average revenue is a horizontal straight line, marginal revenue will be - (1) U shaped (2) Kinked (3) Identical with average revenue (4) L shaped
Last Answer : (3) Identical with average revenue Explanation: The price of a good is also known as the Average Revenue of the firm. Average Revenue (AR) or Price and Marginal Revenue (MR) are identical. ... demand curve. Hence, the competitive demand curve is a horizontal straight line parallel to the OX axis.
Description : In equilibrium, a perfectly competitive firm will equate - (1) marginal social cost with marginal social benefit (2) market supply with market demand (3) marginal profit with marginal cost (4) marginal revenue with marginal cost
Last Answer : (4) marginal revenue with marginal cost Explanation: A perfectly competitive firm's supply curve is that portion of its marginal cost curve that lies above the minimum of the average variable cost ... marginal cost curve. The marginal cost curve is thus the perfectly competitive firm's supply curve.
Description : The duties levied on alcoholic liquors, narcotic drugs and opium come under— (1) Central Excise Duty (2) Land Revenue (3) State Excise Duty (4) General Sales Tax
Last Answer : (3) State Excise Duty Explanation: An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country (as opposed to customs ... paper, drugs and pharmaceuticals, alcoholic liquor, water filtration and purification devices, pan masala, etc.
Description : Average Revenue means - (1) the revenue per unit of commodity sold (2) the revenue from all commodities sold (3) the profit realised from the marginal unit sold (4) the profit realised by sale of all commodities
Last Answer : (1) the revenue per unit of commodity sold Explanation: Average revenue is the revenue per unit of the commodity sold. It can be obtained by dividing the TR by the number of units sold. Then, AR = ... of view. Therefore, average revenue curve of the firm is the same as demand curve of the consumer.
Description : The marginal revenue of a monopolist is: (1) more than price (2) equal to price (3) less than price (4) less than marginal cost
Last Answer : (3) less than price Explanation: A monopolist's marginal revenue is always less than or equal to the price of the good. Marginal revenue is the amount of revenue the firm receives for each additional unit ... - at the new level of output and total revenue at the previous output (one unit less).
Description : The situation in which total revenue is equal to total cost, is known as - (1) monopolistic competition (2) equilibrium level of output (3) break-even point (4) perfect competition
Last Answer : (3) break-even point Explanation: In economics and cost accounting, the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or ... made, although opportunity costs have been "paid", and capital has received the riskadjusted, expected return.
Description : In a perfectly competitive market, a firm's - (1) Average Revenue is always equal to Marginal Revenue (2) Marginal Revenue is more than Average Revenue (3) Average Revenue is more than Marginal Revenue (4) Marginal Revenue and Average Revenue are never equal
Last Answer : (1) Average Revenue is always equal to Marginal Revenue Explanation: Average revenue is the amount money received by a firm per unit of output sold. Marginal revenue is the change in total revenue ... . In a perfectly competitive market, a firm's Average Revenue is always equal to Marginal Revenue.
Description : If the main objective of the government is to raise revenue, it should tax commodities with (1) high elasticity of demand (2) low elasticity of supply (3) low elasticity of demand (4) high income elasticity of demand
Last Answer : (3) low elasticity of demand Explanation: The Ramsey rule states that commodities with low elasticities of demand should be taxed at higher rates than commodities with high elasticities of demand. ... the Ramsey rule may result in a regressive taxation scheme society may view as inequitable.
Description : In order to maximize profits, a monopoly company will produce that quantity at which the: a. marginal revenue equals average total cost b. price equals marginal revenue c. marginal revenue equals marginal cost d. total revenue equals total cost
Last Answer : c. marginal revenue equals marginal cost
Description : In pure monopoly, what is the relation between the price and the marginal revenue? a. the price is greater than the marginal revenue b. the price is less than the marginal revenue c. there is no relation d. they are equal
Last Answer : a. the price is greater than the marginal revenue
Description : 3. The demand for labor is the same as the a. marginal revenue product b. marginal physical product c. marginal cost d. wage
Last Answer : a. marginal revenue product
Description : 1. Which of the following concepts represents the extra revenue a firm receives from the services of an additional unit of a factor of production? a. total revenue b. marginal physical product c. marginal revenus product d. marginal revenue
Last Answer : c. marginal revenus product
Description : 1. The largest source of tax revenue for the federal government is: a. the personal income tax b. the social security tax c. the property tax d. the sales tax
Last Answer : a. the personal income tax
Description : Whenever the government spends more than it collects through revenue, the resulting imbalance is known as : a) Public deficit b) Market deficit c) Government deficit d) Budget deficit
Last Answer : d) Budget deficit
Description : The Government Budget consists of which main component/s? a) Revenue Budget and Capital Budget b) Capital Budget only c) Revenue Budget only d) None of the above
Last Answer : a) Revenue Budget and Capital Budget
Description : Demand curve is related to A.MU curve B.Marginal revenue C.Both (a) and (b)
Last Answer : C.Both (a) and (b)
Description : firm's marginal revenue A.is always negative B.can be positive C.is always positive D.is zero at point at which the total revenue is maximum
Last Answer : D.is zero at point at which the total revenue is maximum
Description : At elasticity of one, marginal revenue is equal to A.one B.zero C.infinity D.none
Last Answer : B.zero
Description : Average revenue is calculated by A.TRn - TRn-1 B.P x Q C.TR / MR D.TR / Q
Last Answer : D.TR / Q
Description : Laffer curve is related to (a) Tax rate and tax revenue. (b) Aggregate tax and aggregate non-tax revenue. (c) Total tax burden and total payment burden. (d) Total income and total expenditure.
Last Answer : (c) Total tax burden and total payment burden.
Description : The relationship between elasticity of demand (e), Average Revenue (AR) and Marginal Revenue (MR) is shown by which of the following formula ? (a) e = MR / (AR – MR) (b) e = AR/MR (c) e = MR/AR (d) e = AR / (AR – MR)
Last Answer : (d) e = AR / (AR – MR)
Description : The most important source of Public Revenue is (a) Taxation (b) Fees (c) Fines and Penalties (d) Subsidies
Last Answer : (a) Taxation
Description : A monopolist is able to maximise his profit when (a) his output is maximum (b) he charges higher prices (c) his average cost is minimum (d) his marginal cost is equal to marginal revenue
Last Answer : (d) his marginal cost is equal to marginal revenue
Description : Okun’s law shows the relationship between the following : (a) Unemployment and Growth (b) Employment and Growth (c) Tax rate and Tax revenue (d) Inflation and Employment
Last Answer : (a) Unemployment and Growth
Description : If total revenue rises when price falls, the demand curve is (a) Elastic (b) Unitary elastic (c) Inelastic (d) None of the above
Last Answer : (a) Elastic
Description : For getting total revenue, the formula is (a) TR/Q (b) MR+Q © AR/Q (d) AR X Q
Last Answer : (d) AR X Q
Description : Total revenue is maximum when elasticity of demand is (a) 3 (b) 1 © 0 (d) 0.5
Last Answer : (b) 1