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 : 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 : When a firm enters the law of diminishing returns to scale (a) TVC curve begins to fall at an increasing rate (b) TVC curve begins to increase at an increasing rate (c) TVC curve begins to fall at an decreasing rate (d) TVC curve begins to increase at an decreasing rate
Last Answer : (a) TVC curve begins to fall at an increasing rate
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 : 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 : 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 : 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 : 4. The demand for labor slopes down and to the right because of a. the law of demand b. the iron law of wages c. the law of diminishing marginal returns d. economies of scale
Last Answer : c. labor is a large percent of the total cost of production
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
Last Answer : (d) All the three
Description : Which of the following statement is true (a) Monopolist are price takers ; (b) Monopoly firm earn abnormal profits; (c) A Monopoly firm faces straight demand line ; (d) Supply curve of a monopoly firm is positive sloped
Last Answer : (a) Monopolist are price takers ;
Description : TVC curve begins to……….with the onset of diminishing returns (a) Rise at an Increasing rate ; (b) Rise at an decreasing rate; (c) Fall at an Increasing rate ; (d) Stabilize
Last Answer : (a) Rise at an Increasing rate ;
Description : The law of diminishing returns applies in……………. (a) Short run ; (b) Long run ; (c) Very short run ; (d) All the time period
Last Answer : (a) Short run ;
Description : Under increasing returns the supply curve is - (1) positively sloped from is to right (2) negatively sloped from left to right (3) parallel to the quantity-axis (4) parallel to the price -axis
Last Answer : (1) positively sloped from is to right Explanation: Supply curve, in economics, is a graphic representation of the relationship between product price and quantity of product that a seller is willing and ... i.e as the price of a commodity increases in the market, the amount supplied increases).
Description : Under increasing returns the supply curve is (1) positively sloped from left to right (2) negatively sloped from left to right (3) parallel to the quantity-axis (4) parallel to the price -axis
Last Answer : positively sloped from left to right
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 : Demand curve of a firm under perfect competition is : (1) horizontal to ox-axis (2) negatively sloped (3) positively sloped (4) U - shaped
Last Answer : (1) horizontal to ox-axis Explanation: Under Perfect Competition, the firm faces a horizontal demand curve. It can sell any quantity desired at the market price, but cannot sell anything above the market price.
Description : Demand curve of a firm under perfect competition is : (1) horizontal to ox-axis (2) negatively sloped (3) positively sloped (4) U – shaped
Last Answer : horizontal to ox-axis
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 : 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
Description : Promotion efforts are subject to a. economies of scale. b. increasing returns. c. diminishing returns. d. promotion expenditure. e. customer awareness.
Last Answer : c. diminishing returns.
Description : The law of diminishing marginal utility is most useful for explaining the (a) Law of supply (b) Law of demand © Shape of production possibility curve (d) curvature of total cost curve
Last Answer : (b) Law of demand
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
Description : Which of the following statement is true (a) For a monopoly firm AR can be zero (b) For a monopoly firm MR can be zero or even negative (c) For monopoly firm MR and AR are identical (d) For a monopoly firm MR and AR are positive sloped
Last Answer : (b) For a monopoly firm MR can be zero or even negative
Description : A positive sloped supply curve for a product represents (a) Supply will move with movement in the price in the opposite direction; (b) Supply will move with the movement in the price in the same direction; (c) Both ; (d) None
Last Answer : (b) Supply will move with the movement in the price in the same direction;
Description : Put into chronological order on the basis of development: l. Law of demand 2. Law of indifference 3. Law of diminishing marginal utility 4. Revealed preference curve 5. Indifference curve A.1 3 4 2 5 B.1 5 3 4 2 C.1 3 2 5 4 D.1 2 3 4 5
Last Answer : C.1 3 2 5 4
Description : PPF is negative sloped due to (a) Scarcity of production resources ; (b) Unlimited wants ; (c) Improvement in technology; (d) Increasing opportunity cost
Last Answer : (a) Scarcity of production resources ;
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 ;
Description : If an industry is characterized by economies of scale then - (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) ... of the large scale operation (4) the costs of entry into the market are likely to be substantial
Last Answer : (2) long run unit costs of production decreases as the quantity the firm produces increases Explanation: In microeconomics, economies of scale are the cost advantages that an enterprise obtains due to expansion ... in unit cost as the size of a facility and the usage levels of other inputs increase.
Description : If an industry is characterised by economies of scale then (1) barriers to entry are not very large (2) long run unit costs of production decreases as the quantity the firm produces increases (3) ... of the large scale operation (4) the costs of entry into the market are likely to be substantial
Last Answer : long run unit costs of production decreases as the quantity the firm produces increases
Description : In a pure monopoly firm a firm can make abnormal profit at the long run equilibrium level due to (a) Price discrimination;(b)Cost effectiveness ; (c) Banned entry of new firms ; (d) Sales promotion
Last Answer : (c) Banned entry of new firms ;
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 : 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 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 : In short run a monopolistic competition firm will be in equilibrium where (a) MR = curve intersect SMC curve from above (b) MR curve intersect SMC curve from below (c) MC = AR ; (d) MR curve intersect SMC from below and P is equal to or more than AVC
Last Answer : ; (d) MR curve intersect SMC from below and P is equal to or more than AVC
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 : 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 : Law of returns to scale applies when……… (a) All inputs cost are variable ; (b) All input cost are fixed; (c) All cost are partly fixed and partly variable ; (d) None
Last Answer : (a) All inputs cost are variable ;
Description : 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 ... the firm for the current consumption foregone. (4) increases because the level of savings will fall.
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.
Description : 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 ... firm for the current consumption foregone. (4) increases because the level of savings will fall.
Last Answer : increases to compensate the firm for the current consumption foregone.
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 : 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 : The ideal level of operation for a pure monopoly firm is the level where (a) TR and STC curve are parallel to each other ; (b) TR = TC ; (c) TR = Total variable cost; (d) TR is less than STC
Last Answer : (a) TR and STC curve are parallel to each other ;
Description : TVC curve begins to………with the onset of increasing returns (a) Rise at an increasing rate ; (b) Rise at an decreasing rate; (c) Fall at an Increasing rate ; (d) Stabilize
Last Answer : (b) Rise at an decreasing rate;
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 : 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 : 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
Last Answer : the Marginal Revenue Productivity of a factor becomes equal to its reward.
Description : Law of diminishing marginal utility is based on the assumption that a. Tastes change over time b. Consumption is continuous c. Different units of goods consumed are homogeneous Of these statements: A.Only a is true B.a and c are true C.b and c are true D.All are true
Last Answer : D.All are true