Description : The slope of the consumption curve connotes (a) Average propensity to save ; (b) Marginal Propensity to consume ; (c) Marginal propensity to save ; (d) Level of consumption in the economy.
Last Answer : (b) Marginal Propensity to consume ;
Description : Consumption demand does not depend upon the level of (a) Income ; (b) Propensity to consume ; (c) Consumer spending ; (d) Marginal efficiency of investment.
Last Answer : (d) Marginal efficiency of investment.
Description : 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 ... consume decreases as income increases (d) The average propensity to consume increases as income increases
Last Answer : d) The average propensity to consume increases as income increases
Description : An increase in marginal propensity to consume will (a) Lead to the consumption function becoming steeper. (b) Shift the consumption function upwards. © Shift the consumption function downwards. (d) Shift the savings function upwards.
Last Answer : d) Lead to the consumption function becoming steeper.
Description : A profit maximizing firm will invest up to the level of investment where (a) The cost of borrowing equals marginal efficiency of capital (b) The cost of borrowing is greater than marginal ... marginal efficiency of capital (d) The cost of borrowing is equal to marginal propensity to consume.
Last Answer : (a) The cost of borrowing equals marginal efficiency of capital
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
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
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.
Description : The cost of borrowing is equal to marginal propensity to consume. 21. Investment is (a) An injection that increases aggregate demand (b) An withdrawal that increases aggregate demand © An injection that decreases aggregate demand (d) An withdrawal that decreases aggregate demand
Last Answer : a) An injection that increases aggregate demand
Description : .An increases in investment is most likely to be caused by (a) Lower interest rates (b) Expectations of lower national incomes © A decrease in the marginal propensity to consume (d) An increase in withdrawals.
Last Answer : (a) Lower interest rates
Description : 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
Description : The marginal propensity to consume lies between (1) 0 to 1 (2) 0 to ¥ (3) 1 to ¥ (4) ¥ to ¥
Last Answer : 0 to 1
Description : According to traditional approach the factor responsible for operation of downward slope of demand curve are (a) Change in number of consumers ; (b) Law of decreasing marginal utility (c) Alternative uses of goods ; (d) All the three
Last Answer : (d) All the three
Description : Average propensity to consume is defined as - (1) Aggregate consumption +Total population (2) Aggregate income ÷ Aggregate consumption (3) Change in consumption ÷ Change in income (4) Aggregate consumption +Aggregate income
Last Answer : (4) Aggregate consumption +Aggregate income Explanation: In economics, the average propensity to consume (APC) is defined as the ratio of aggregate or total consumption to aggregate income in a given ... propensity to consume, for any income level, may be found by dividing consumption by income.
Description : A competitive firm maximizes its total profit when ……………… (a) Average cost equal average realization ; (b) Marginal cost equals Price; (d) Total revenue is the maximum ; (d) MR = AR
Last Answer : (d) Total revenue is the maximum ;
Description : Decreases in price of a product results in increased consumption of the product as the product becomes cheaper compared to other products. This effect is known as (a) Substitution effect ; (b) Income effect ; (c) Diminishing marginal utility concept; (b) Law of diminishing returns
Last Answer : (a) Substitution effect ;
Description : The slope of total variable cost curve equals…………….. (a) AVC ; (b) MC ; (c) AC ; (d) MPP
Last Answer : (b) MC ;
Description : According to Keynes, business cycles are due to variation in the rate of investment caused by fluctuations, in the - (1) Marginal efficiency of capital (2) Marginal propensity to save (3) Marginal propensity to consumption (4) Marginal efficiency to investment
Last Answer : (1) Marginal efficiency of capital Explanation: According to Keynes' General Theory of Employment, Interest, and Money,' business cycles are caused by variations in the rate of investment ... efficiency of capital. Marginal efficiency of capital means the expected profits from new investments.
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
Description : According to Keynes, business cycles are due to variation in the rate of investment caused by fluctuations , in the (1) Marginal efficiency of capital (2) Marginal propensity to save (3) Marginal propensity to consumption (4) Marginal efficiency to investment
Last Answer : Marginal efficiency of capital
Description : Total variable cost curve is explained by (a) Law of the diminishing marginal returns ; (b) The price of the variable inputs; (c) Production function ; (d) All the three
Last Answer : ; (d) All the three
Description : The relationship between aggregate consumption expenditure and aggregate income of household sector is known as ………………………. function. (a) Consumption ; (b) Saving ; (c) Expenditure ; (d) Income
Last Answer : (a) Consumption
Description : Over short period, when income rises, average propensity to consume usually - (1) rises (2) falls (3) remains constant (4) fluctuates
Last Answer : (2) falls Explanation: Keynes postulated that aggregate consumption is a function of aggregate current disposable income. The Keynesian consumption function is written as: C = a + eY a > 0, 0 < c < 1; ... the disposal in-come. So as income increases, average propensity to consume (APC = C/Y) falls.
Description : The average propensity to consume is measured by (a) C/Y (b) C=Y © Y/C (d) C+Y
Last Answer : a) C/Y
Description : Over short period, when income rises, average propensity to consume usually (1) rises (2) falls (3) remains constant (4) fluctuates
Last Answer : falls
Description : Disguised unemployment refers to the situation when (a) Marginal Productivity of the surplus workers is zero (b) Marginal productivity of the surplus workers is less than average productivity ( ... surplus workers is falling sharply (d) Marginal productivity of the surplus workers is falling sharply
Last Answer : (a) Marginal Productivity of the surplus workers is zero
Description : Total profit of a firm in a perfect competitive market is – (a) Total revenue less total cost ; (b) Marginal revenue less marginal cost; (c) Total revenue less marginal cost ; (d) Total revenue less variable cost
Last Answer : (a) Total revenue less total cost ;
Description : Average Revenue of a monopolist firm is (a) Always more than the Marginal revenue ; (b) Always less than the Marginal revenue; (c) Equal to marginal revenue ; (d) Any of the above three possible
Last Answer : (a) Always more than the Marginal revenue ;
Description : For a monopoly firm market demand curve is (a) Marginal revenue curve itself ; (b) Average Revenue curve itself ; (c) Marginal cost curve (d) None
Last Answer : (b) Average Revenue curve itself ;
Description : Which of the following statement is true (a) In perfect competition Average and Marginal revenue are identical (b) In perfect competition Average and Marginal cost are identical (c) In perfect competition ... cost are identical (d) In perfect competition only normal profit can be earned by a firm
Last Answer : (a) In perfect competition Average and Marginal revenue are identical
Description : A natural monopoly has declining – over large range of output (a) Long run average cost ; (b) Short run average cost ; (c) Long run total cost; (d) Long run marginal cost
Last Answer : (a) Long run average cost ;
Description : In the long run price is governed by …………. (a) Cost of Production ; (b) Demand supply forces ; (c) Marginal utility ; (d) None
Last Answer : (a) Cost of Production ;
Description : If in question No. 286 the price is reduced to `9 But the demand goes to 26 units what is the marginal revenue from sale of 26th unit (a) `7.4 ; (b) `(-16) ; (c) `16 ; (d) `257.4
Last Answer : (b) `(-16) ;
Description : The demand for a product is 25 units when the price is `10, however the demand rises to 26 when the price is reduced to `9.9 per unit. The marginal revenue from production and sale of additional unit from 25 to 26 is (a) `7.4 ; (b) `(16) ; (c) `10 ; (d) `257.6
Last Answer : (a) `7.4 ;
Description : Increase in price of a product reduces the purchasing power as a result of which demand for a product goes up. This effect is known as (a) Substitution effect ; (b) Income effect ; (c) Diminishing marginal utility concept (d)Law of diminishing returns
Last Answer : ; (b) Income effect ;
Description : Marginal cost can be equal to Average variable cost when (a) Average variable cost is falling ; (b) Average variable cost is increasing; (c) Average variable cost is constant ; (d) Under any of the above situations
Last Answer : (c) Average variable cost is constant ;
Description : Marginal cost curve is (a) Positively sloped ; (b) Negatively sloped ; (c) Parallel to X axis ; (d) Parallel to Y axis
Last Answer : (a) Positively sloped
Description : In the short run, diminishing marginal returns is implied by (a) Rising MC ; (b) Falling MC ; (c) Rising AVC ; (d) Constant TC
Last Answer : (a) Rising MC ;
Description : Variable cost is also known as (a) Incremental cost ; (b) Marginal cost ; (c) Differential cost ; (d) All the three
Description : Total cost is the arithmetic sum of (a) AFC and AVC ; (b) FC and Variable cost ; (c) Marginal cost and variable cost; (d) Sunk cost and fixed cost
Last Answer : (b) FC and Variable cost ;
Description : The negatively sloped part of long run cost curve of a firm is due to (a) Increase in production due to specialization and division of labour; (b) Diseconomies of scale ; (c) Diminishing returns to scale ; (d) Marginal utility theory
Last Answer : (a) Increase in production due to specialization and division of labour;
Description : The positively sloped part of long run cost curve of a firm is due to (a) Economies of scale ; (b) Diseconomies of scale; (c) Diminishing returns to scale ; (d) Marginal utility theory
Last Answer : (b) Diseconomies of scale;
Description : Marginal cost is defined as……………………. (a) Change in total cost due to addition of one unit ; (b) Total cost divided by additional unit; (c) Total cost divided by total units produced ; (d) Total sales / Total production
Last Answer : (a) Change in total cost due to addition of one unit ;
Description : If a firms cost of raw material decreases then (a) Marginal cost curve will shift downward ; (b) Marginal cost curve will shift upward (c) Market price will go down ; (d) Market price will go up
Last Answer : (a) Marginal cost curve will shift downward ;
Description : If a firms cost of raw material increases then (a) Market price of the final product will also increase (b) Equilibrium level of quantity also increases ; (c) Marginal cost curve will shift upward (d) Marginal cost curve will shift downward
Last Answer : ; (c) Marginal cost curve will shift upward
Description : Which of these costs will increase or decrease with increase in production (a) Marginal cost ; (b) Financial costs ; (c) Fixed costs ; (d) All the three
Last Answer : (a) Marginal cost ;
Description : Marginal product is…………. (a) Rate at which total production changes with change in variable input; (b) Rate at which total production changes with change in total cost; (c) Rate at which total production changes with change in fixed cost ; (d) None
Last Answer : (a) Rate at which total production changes with change in variable input;
Description : Disguised unemployment means (a) Unemployment in agriculture ; (b) Unemployment due to recession ;(c) Unemployment due to downturn in business activity ; (d) Marginal Productivity of Labor (MPL) is zero.
Last Answer : ;(c) Unemployment due to downturn in business activity ;
Description : The law of indifference is/are also know by- (a) Law of substitution ; (b) law of equimarginal utility ; (c) Law of diminishing marginal utility (d) All the three
Description : The paradox of Diamond is more costly than water is explained by (a) Marginal utility concept ;(b) Scarcity ; (c) Relative cost of production ; (d) All the three
Last Answer : ;(b) Scarcity ;