A firm considering what type of new plant to build is involved in a:
Immediate-run decision
Market period decision
Short-run decision
Long-run decision
Correct Answer :
D. Long-run decision
Related Questions
Profits of a firm will be calculated taking into account the units produced and the difference between:
Real cost and money cost
Variable cost and fixed cost
Average cost and average revenue
Marginal cost and average cost
The coefficient of the price elasticity of demand is computed as the absolute value of the percentage change in quantity demanded divided by:
The change in price
The change in supply
The percentage change in supply
The percentage change in price
The basic subject matter of economics is:
Money
Capital resources
Scarcity
Inflation
The cost of firms in cournot model are:
identical
differential
very high
very low
In a socialist (communist) economy the invisible hand:
Guides most resource allocation decisions
Operates effectively only in the labor market
Operates effectively only in the market for capital
Is prevented from operating effectively
The production techniques are technically efficient:
Bellow the lower ridge line
Above the upper ridge line
Between the two ridge lines
On the upper ridge line
Marginal revenue from a given output:
The price at which the marginal unit sells
Total revenue sale of all units divided by volume of sales
Average revenue of total output average revenue of last unit
The change in total revenue resulting from the sale of one unit more of output
If production increases under increasing returns to scale, the cost will:
Increase at decreasing rate
Increase at constant rate
Decrease at increasing rate
Increase at increasing rate
Under Bandwagon effects, people use those goods which are used by their:
Friends
Relatives
Family
All of them
Implicit costs are the costs:
Which are not incurred by the firm and may accrue to the community
Of resources the cost of factors owned by the firm
Of resources supplied by the household
Of government externalities
In the case of substitutes, the cross demand curve slopes
Downwards to the right
Upwards to the right
Backwards to the right
Inwards at the bottom
Abstinence or Waiting theory of Interest was presented by:
Lord Keynes
J.S.Mill
Alfred Marshal
Prof.Senior
Which of the following models are associated with non-collusive oligopoly?
Bertrand model
Chamberlin model
Kinked demand model (Sweezy Model)
All of the above
If the prices of goods rise then:
The real income of consumer falls
The real income of consumer rises
The real income of a consumer remains constant
The real income of consumer becomes zero
In case of monopoly, both AR and MR fall, but MR falls:
Double to that of AR
1/2 to that of AR
2/3 to that of AR
Four times to that of AR
Each firm in cournot model can:
not ignor the activities of the rival
ignor the activities of the rival
both a and b
none of the above
Law of Returns to Scale shows:
Technical relationship between input of a variable factor and the resulting output
Any economic relationship between input and output
An output maximizing relationship
A relationship with input changing and corresponding changes in output
Given a U shaped average cost curve, the relationship between average cost and marginal cost is such that marginal cost must always be:
Falling when average cost is falling
Rising when average cost is falling
Falling when average cost is rising
Rising when average cost is rising
By increasing the price of its products above those of its competitors, a perfectly competitive seller:
Can sell more
Reduces its revenues
Can sell nothing
Increases its revenues
The external economies of scale experienced by a firm include the:
Growth of firms processing its waste materials
Development of research bureau serving the industry
Supply of suitable skilled labor in the area
All of the above
Slope of a demand curve is:
Not relevant to elasticity
The only factor determining elasticity
Only one of the factors influencing elasticity
None of the above
Consumer surplus is the difference between
Price demanded and price paid
Price quoted and price actually paid
Price that a consumer is willing to pay and the price actually paid
None of the above
Revealed Preference Theory was presented by:
Ricardo
Adam Smith
Pigou
Samuelson
The least cost combination of factors x , y and z will generally be the point at which:
Price of x = Price of z Price of y Price of x
MP of x = MP of y Price of x Price of x
MP of x = MP of y = MP of z Price of x Price of y Price of z
MP of x = MP of y = MP of z
According to Saint Thomas Aquinas value is determined by God, but prices by:
Consumers
Employees
People
Labor
Under the law of variable proportions, the average and the marginal product of the variable factor would ultimately:
Become equal
Decrease
Become constant
Increase
When elasticity of demand is one (e=1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
Which form of market structure is characterized by interdependence in decision-making as between the different competing firms?
Oligopoly
Perfect competition
Imperfect competition
None of the above
The isoquant which are generated by CES (constant elasticity of substitution) production function are always:
Positively sloped
Negatively sloped
Concave to the origin
None of the above
The short-run supply curve of the perfectly competitive firm is given by:
The rising portion of its MR over and above the break-even (shut-down) point
The rising portion of its MC over and above the break-even (shut-down) point
The rising portion of its MC over and above the AC curve
The rising portion of its MC curve