income, prices and rate of interest(c) Average cost and Marginal cost (d) Total cost and Marginal cost

Producers’ surplus is equal to the difference between
(a) Price and Marginal cost curve
(b) Price and Marginal (c) Average cost and Marginal cost
(d) Total cost and Marginal cost curve
by

1 Answer

Answer :

) Price and Marginal cost curve
by

Related questions

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

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

According to monetary approach of Balance of Payments, the demand for money is a stable function of (a) income, prices and rate of interest (b) income and prices (c) prices and rate of interest (d) income, prices and foreign exchange reserves

Description : According to monetary approach of Balance of Payments, the demand for money is a stable function of (a) income, prices and rate of interest (b) income and prices (c) prices and rate of interest (d) income, prices and foreign exchange reserves

Last Answer : income, prices and rate of interest

An increase in investment is caused by (a) Lower interest rates (b) Expectations of lower national income © A decrease in the marginal propensity to consume (d) An increase in withdrawals

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Last Answer : (a) Lower interest rates

Diamonds are priced higher than water because : (1) they are sold by selected firms with monopolistic powers. (2) their marginal utility to buyers is higher than that of water. (3) their total utility to buyers is higher than that of water. (4) consumers do not buy them at lower prices.

Description : Diamonds are priced higher than water because : (1) they are sold by selected firms with monopolistic powers. (2) their marginal utility to buyers is higher than that of water. (3) their total utility to buyers is higher than that of water. (4) consumers do not buy them at lower prices.

Last Answer : (2) their marginal utility to buyers is higher than that of water. Explanation: The water diamond paradox or puzzle was a mystery of Adam Smith who observed that the price of diamonds was much higher ... is very high and so consumers are willing to pay higher prices for diamond, than for water.

Diamonds are priced higher than water because : (1) they are sold by selected firms with monopolistic powers. (2) their marginal utility to buyers is higher than that of water. (3) their total utility to buyers is higher than that of water. (4) consumers do not buy them at lower prices.

Description : Diamonds are priced higher than water because : (1) they are sold by selected firms with monopolistic powers. (2) their marginal utility to buyers is higher than that of water. (3) their total utility to buyers is higher than that of water. (4) consumers do not buy them at lower prices.

Last Answer :  their marginal utility to buyers is higher than that of water.

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.

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).

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

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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.

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.

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.

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

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.

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

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.

Which of the following is an inverted `U' shaped curve? (1) Average cost (2) Marginal cost (3) Total cost (4) Fixed cost

Description : Which of the following is an inverted `U' shaped curve? (1) Average cost (2) Marginal cost (3) Total cost (4) Fixed cost

Last Answer : (1) Average cost Explanation: In economics, a cost curve is a graph of the costs of production as a function of total quantity produced. Both the Short-run average total cost curve (SRAC) and Long ... typically expressed as U-shaped. However, the shapes of the curves are not due to the same factors.

The addition to total cost by producing an additional unit of out-put by a firm is called - (1) Variable cost (2) Average cost (3) Marginal cost (4) Opportunity cost

Description : The addition to total cost by producing an additional unit of out-put by a firm is called - (1) Variable cost (2) Average cost (3) Marginal cost (4) Opportunity cost

Last Answer : (3) Marginal cost Explanation: The addition to total cost by producing an additional unit of output by a firm is called Marginal cost. Average cost is the total cost of producing a given output divided by that output.

Under hill cost pricing, price is determined - (1) by adding a margin to the average cost (2) by comparing marginal cost and marginal revem (3) by adding normal profit to the marginal cost (4) by the total al cost of production

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Last Answer : (1) by adding a margin to the average cost Explanation: Full cost pricing is a practice where the price of a product is calculated by a firm on the basis of its direct costs per unit of output ... is known as 'full-cost' pricing. The price is equal to 'full' cost, including an acceptable profit.

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

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Last Answer : c. marginal revenue equals marginal cost

Difference between average cost and average revenue is (a) total profit (b) net profit © average profit (d) marginal profit

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Equilibrium output is determined by: (1) the equality between total Variable cost and Marginal revenue. (2) the equality betweem Marginal cost and Marginal revenue. (3) the equality between Average cost and Average revenue. (4) the equality between total cost and total revenue.

Description : Equilibrium output is determined by: (1) the equality between total Variable cost and Marginal revenue. (2) the equality betweem 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 : the equality betweem Marginal cost and Marginal revenue.

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.

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Last Answer : equality between marginal cost and marginal revenue.

The addition to total cost by producing an additional unit of output by a firm is called (1) Variable cost (2) Average cost (3) Marginal cost (4) Opportunity cost

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Which of the following is an inverted ‘U’ shaped curve ? (1) Average cost (2) Marginal cost (3) Total cost (4) Fixed cost

Description : Which of the following is an inverted ‘U’ shaped curve ? (1) Average cost (2) Marginal cost (3) Total cost (4) Fixed cost

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Under full cost pricing, price is determined (1) by adding a margin to the average cost (2) by comparing marginal cost and marginal revenue (3) by adding normal profit to the marginal cost (4) by the total cost of production

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Last Answer :  by adding a margin to the average cost

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

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Last Answer : total revenue equals total cost

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Last Answer : marginal cost equals the marginal revenue

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 these

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 these

Last Answer : average revenue equals average cost

If average cost falls, marginal cost - (1) increases at a higher rate (2) falls at the same rate (3) increases at a lower rate (4) falls at a higher rate

Description : If average cost falls, marginal cost - (1) increases at a higher rate (2) falls at the same rate (3) increases at a lower rate (4) falls at a higher rate

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If average cost falls, marginal cost (1) increases at a higher rate (2) falls at the same rate (3) increases at a lower rate (4) falls at a higher rate

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Last Answer : falls at the same rate

As the number of investments made by a firm increases, its internal rate of return - (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will fall, ceteris paribus. (3) increases to compensate the firm for the current consumption foregone. (4) increases because the level of savings will fall.

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Last Answer : (3) increases to compensate the firm for the current consumption foregone. Explanation: Internal rates of return are commonly used to evaluate the desirability of investments or projects. The higher a ... of return is greater than an established minimum acceptable rate of return or cost of capital.

'Marginal efficiency of capital' is - (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

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Last Answer : (1) expected rate of return on new investment Explanation: The volume of investment depend upon the following two factors: (1) rate of interest: and (2) marginal efficiency of capital. Before ... partly on expectations of future yields and partly on the actual price of the capital good concerned.

‘Marginal efficiency of capital’ is (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Description : ‘Marginal efficiency of capital’ is (1) expected rate of return on new investment (2) expected rate of return of existing investment (3) difference between rate of profit and rate of interest (4) value of output per unit of capital invested

Last Answer :  expected rate of return on new investment

As the number of investments made by a firm increases, its internal rate of return (1) declines due to diminishing marginal productivity. (2) declines because the market rate of interest will fall, ceteris paribus. (3) increases to compensate the firm for the current consumption foregone. (4) increases because the level of savings will fall.

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Last Answer :  increases to compensate the firm for the current consumption foregone.

Which of the following are not characteristics of Keynesian consumption function? (a) The main influence on consumption in the short run is current disposable income (b) The marginal propensity to consume is less than one © The average propensity to consume decreases as income increases (d) The average propensity to consume increases as income increases

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Last Answer : d) The average propensity to consume increases as income increases

What is "mpc"• or the 'marginal propensity to consume'? a) the proportion of total additional planned savings to total additional income b) the proportion of total additional income to total additional planned savings c) the fraction of total additional income that is used for consumption d) none of the above

Description : What is "mpc" or the 'marginal propensity to consume'? a) the proportion of total additional planned savings to total additional income b) the proportion of total additional income to total additional ... c) the fraction of total additional income that is used for consumption d) none of the above

Last Answer : : c) the fraction of total additional income that is used for consumption

What is "mps"• or the 'marginal propensity to save'? a) the proportion of total additional planned savings to total additional income b) the proportion of total additional income to total additional planned savings c) the fraction of total additional income that is used for consumption d) none of the above

Description : What is "mps" or the 'marginal propensity to save'? a) the proportion of total additional planned savings to total additional income b) the proportion of total additional income to total additional ... c) the fraction of total additional income that is used for consumption d) none of the above

Last Answer : a) the proportion of total additional planned savings to total additional incom

The marginal propensity to consume is equal to (a) Total spending/Total consumption (b) Total consumption/ Total income. © Change in consumption/ Change in income (d) Change in consumption/ Change in savings.

Description : The marginal propensity to consume is equal to (a) Total spending/Total consumption (b) Total consumption/ Total income. © Change in consumption/ Change in income (d) Change in consumption/ Change in savings.

Last Answer : © Change in consumption/ Change in income

Marginal Propensity to Consume is (a) Increase in consumption due to one unit increase in income. (b) Total consumption divided by total income. © Both (a) and (b). (d) Neither (a) nor (b).

Description : Marginal Propensity to Consume is (a) Increase in consumption due to one unit increase in income. (b) Total consumption divided by total income. © Both (a) and (b). (d) Neither (a) nor (b).

Last Answer : (a) Increase in consumption due to one unit increase in income.

The Keynesian consumption function shows a relation between - (1) aggregate consumption and total population. (2) aggregate consumption and general price level. (3) aggregate consumption and aggregate income (4) aggregate consumption and interest rate

Description : The Keynesian consumption function shows a relation between - (1) aggregate consumption and total population. (2) aggregate consumption and general price level. (3) aggregate consumption and aggregate income (4) aggregate consumption and interest rate

Last Answer : (3) aggregate consumption and aggregate income Explanation: According to Keynesian Theory of consumption, the current real disposable income is the most important determinant of consumption in the short run. It bases consumption on current income.

The Keynesian consumption function shows a relation between (1) aggregate consumption and total population. (2) aggregate consumption and general price level. (3) aggregate consumption and aggregate income (4) aggregate consumption and interest rate

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Last Answer : aggregate consumption and aggregate income

When my income was $100,000, I paid $10,000 in taxes. When my income became $200,000, I paid $40,000 in taxes. My marginal tax rate is: a. 10% b. 20% c. 30% d. 40%

Description : When my income was $100,000, I paid $10,000 in taxes. When my income became $200,000, I paid $40,000 in taxes. My marginal tax rate is: a. 10% b. 20% c. 30% d. 40%

Last Answer : c. 30%

When my income was $100,000, I paid $10,000 in taxes. When my income became $200,000, I paid $40,000 in taxes. My marginal tax rate is: a. 10% b. 20% c. 30% d. 40%

Description : When my income was $100,000, I paid $10,000 in taxes. When my income became $200,000, I paid $40,000 in taxes. My marginal tax rate is: a. 10% b. 20% c. 30% d. 40%

Last Answer : c. 30%

If total product is at its maximum then: (AP= Average product) (MP= Marginal product) (1) AF = 0 (2) AP < 0 (3) MP = 0 (4) AP = MP = 0

Description : If total product is at its maximum then: (AP= Average product) (MP= Marginal product) (1) AF = 0 (2) AP < 0 (3) MP = 0 (4) AP = MP = 0

Last Answer : (3) MP = 0 Explanation: Total product (TP) is the total output a production unit can produce, using different combination of factors of production. When marginal product =0 (at point D in ... figure given below). Then en as the marginal product becomes negative, the total product starts going down.

The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point: a. Total physical product begins to fall b. The marginal physical product rises c. The marginal physical product falls d. The average physical product falls

Description : The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor, beyond some point: a. Total physical product begins ... The marginal physical product rises c. The marginal physical product falls d. The average physical product falls

Last Answer : c. The marginal physical product falls

Total utility is maximum, when (a) marginal utility is maximum (b) marginal utility is zero © marginal utility increases (d) average utility is maximum

Description : Total utility is maximum, when (a) marginal utility is maximum (b) marginal utility is zero © marginal utility increases (d) average utility is maximum

Last Answer : (b) marginal utility is zero

If total product is at its maximum then: (AP= Average product) (MP= Marginal product) (1) AP = 0 (2) AP < 0 (3) MP = 0 (4) AP = MP = 0

Description : If total product is at its maximum then: (AP= Average product) (MP= Marginal product) (1) AP = 0 (2) AP < 0 (3) MP = 0 (4) AP = MP = 0

Last Answer : MP = 0

When the total product rises at an increasing rate, the - (1) marginal product is zero (2) marginal product is rising (3) marginal product is falling (4) marginal product remains constant

Description : When the total product rises at an increasing rate, the - (1) marginal product is zero (2) marginal product is rising (3) marginal product is falling (4) marginal product remains constant

Last Answer : (2) marginal product is rising Explanation: Marginal product of an input (factor of production) is the extra output that can be produced by using one more unit of the input (for instance ... from total product. The other is average product. Marginal product is directly proportional to total product.

When the total product rises at an increasing rate, the (1) marginal product is zero (2) marginal product is rising (3) marginal product is falling (4) marginal product remains constant

Description : When the total product rises at an increasing rate, the (1) marginal product is zero (2) marginal product is rising (3) marginal product is falling (4) marginal product remains constant

Last Answer : marginal product is rising

Which of the following cost curve is never `U' shaped ? (1) Marginal cost curve (2) Average variable cost curve (3) Average fixed cost curve (4) Average cost curve

Description : Which of the following cost curve is never `U' shaped ? (1) Marginal cost curve (2) Average variable cost curve (3) Average fixed cost curve (4) Average cost curve

Last Answer : (3) Average fixed cost curve Explanation: Average fixed cost curve is never 'U' shaped. Since total fixed costs are unchanged as output rises, the average fixed cost curve falls continuously as output is increased.

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

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.

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

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.

When average cost production (AC) falls, marginal cost of production must be - (1) rising (2) Falling (3) Greater than the average cost (4) Less than the average cost

Description : When average cost production (AC) falls, marginal cost of production must be - (1) rising (2) Falling (3) Greater than the average cost (4) Less than the average cost

Last Answer : (4) Less than the average cost Explanation: Average cost is the total cost per unit of output. Marginal cost, on the other hand, is the addition to the total cost by producing one more ... where marginal cost is higher than average cost, and average cost is an increasing function of output.

Why is the law of diminishing marginal returns true? a. specialization and division of labor b. spreading the average fixed cost c. limited capital d. all factors being variable in the long-run

Description : Why is the law of diminishing marginal returns true? a. specialization and division of labor b. spreading the average fixed cost c. limited capital d. all factors being variable in the long-run

Last Answer : c. limited capital

Marginal cost curve cuts the average cost curve from below at A.its lowest point B.the left of the lowest pointC.right of the lowest pointD.All of the above

Description : Marginal cost curve cuts the average cost curve from below at A.its lowest point B.the left of the lowest point C.right of the lowest point D.All of the above

Last Answer : A.its lowest point