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4

Any expansion in output by a firm in the short period will always reduce the:

A. Average variable cost

B. Average fixed cost

C. Both average fixed and variable cost

D. None of the above

Correct Answer :

B. Average fixed cost


Related Questions

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4

The arc elasticity is the measure of average elasticity at the mid-point of the chord and connects:

A. Two points on demand curve

B. Two points on supply curve

C. Many points on demand curve

D. Many points on demand curve

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4

Price discrimination occurs when:

A. Different prices are charged to different consumers for homogenous products

B. Same prices are charged for differentiated products

C. Different prices are charged for homogenous goods for successive units to the same customer

D. Any of the above condition is present

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4

If the price of a product falls then quantity demanded tends to increase ceteris paribus because:

A. The MU/P ratio has decreased

B. Of the income and substitution effects

C. Consumers tend to feel poorer when prices fall

D. When price falls the demand curve shifts right

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4

Under monopolistic competition, the firms compete alongwith:

A. Supreme powers

B. Discretionary powers

C. Low powers

D. None of the above

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4

The Chamberline model recognizes mutual:

A. Independence of firms

B. Interdependence of firms

C. Independence of individuals

D. Interdependence of materials

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4

Cross-elasticity of demand or cross-price elasticity between two perfect substitutes will be:

A. Negative

B. Positive

C. Infinite

D. Zero

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4

A mixed economy is characterized by the coexistence of:

A. Modern and traditional industries

B. Public and private sectors

C. Foreign and domestic investments

D. Commercial and subsistence farming

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4

An inferior good/ commodity is inferior for:

A. Every consumer

B. Most consumers

C. All consumers

D. Some consumers and not for others

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4

Dumping is international discriminating:

A. Monopoly

B. Oligopoly

C. Duopoly

D. None of the above

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4

Who wrote An Introduction to Positive Economics?

A. R.G.Lipsey

B. Paul.A.Samuelson

C. E.D.Domar

D. J.M.Keynes

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4

If the demand curve is horizontal then its slope is:

A. Infinite

B. Zero

C. Equal to one

D. None of the above

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4

In case of income effect, the level of consumers satisfaction rises when:

A. Income rises

B. Income falls

C. Sales rises

D. Price falls

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4

If the commodity is normal then the Income Effect (I.E) and the Substitution Effect (S.E):

A. Both move together and reinforce each other

B. One moves and the other remains constant

C. Move in the opposite direction and neutralize each other

D. Both remain constant

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4

In short run, a firm would remain in business as long as which one of the following of cost is covered?

A. Total costs

B. Fixed costs

C. Variable costs

D. Constant costs

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4

Identify the work of T.W.Schultz:

A. Transforming Traditional Agriculture

B. Productivity and Technical Change

C. Jobs, Poverty and the Green Revolution

D. Causes of Poverty

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4

Extension (expansion) of demand means:

A. More quantity demanded at a lower price

B. More quantity demanded at a higher price

C. More quantity demanded at the same price

D. None of the above

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4

Which of the following is not characteristic of perfect competition?

A. Freedom of entry and exit

B. Each seller is a price taker

C. Perfect information about prices

D. Heterogeneous products

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4

The reserve capacity in administration is advocated on the ground that demand for a product will:

A. Decrease in the future

B. Increase in the future

C. Remain constant

D. None of the above

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4

A market demand curve presumes that:

A. All consumers are alike

B. Incomes of all consumers is the same

C. Tastes of all consumers are the same

D. Consumers differ in taste, incomes and other matters

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4

Classical production function is:

A. Q = f(L)

B. U =f(X)

C. Q =f(K)

D. Q =f(L,K)

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4

The horizontal demand curve for a commodity shows that its demand is:

A. Highly elastic

B. Perfectly inelastic

C. Perfectly elastic

D. Zero elastic

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4

Identify the author of The Social Framework:

A. R.G.D.Alien

B. J.R.Hicks

C. A.C.Pigou

D. None of the above

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4

A profit-maximizing monopolist in two separate markets will:

A. Charge the same price in both markets

B. Always charge a higher price in the market where he sells more

C. Always charge a higher price in the market where he sells less

D. Adjust his sales in the two markets so that his marginal revenue in each market just equals his aggregate marginal cost

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4

For the given production function, technical inefficiency is defined as:

A. Sets of points relating production function that maximizes output given input (labor) i.e. Q = f(L, K)

B. Sets of points relating production function that produces less output than possible for a given set of input (labor) i.e. Q < f(L, K)

C. Use of imported technology

D. None of the above

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4

Average cost means:

A. Cost of the average units

B. Cost of the last units of average

C. Cost of the unit of production

D. Total cost marginal cost

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4

Price-taker firms:

A. Advertise to increase the demand for their product

B. Do not advertise, because most advertising is wasteful

C. Do not advertise because they can sell as much as they want at the current price

D. Who advertise will get more profits than those who do not

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4

Under perfect competition, the average revenue, marginal revenue and price are shown:

A. By a same single curve

B. By three different curves

C. By downward sloping curve

D. None of the above

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4

We can obtain consumers demand curve from:

A. Income Consumption Curve (ICC)

B. Engels Curve

C. Price Consumption Curve (PCC)

D. Production Possibility Curve (PPC)

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4

According to law of Equi-Marginal Utility when price of commodity falls then we bought:

A. More units

B. Less units

C. Same units

D. Zero units

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4

In economics, Externality means:

A. An externality is a cost or benefit which is not transmitted through prices

B. An externality is a cost or benefit which is transmitted through prices

C. An externality is a production received through external resources

D. None of the above