At the point where the straight line from the origin is tangent to the TC curve, AC is:
Maximum
Minimum
Equal
Lower
Correct Answer :
B. Minimum
Related Questions
In monopolistic competition, if a firm lowers its price, the rival firms will:
Also lower their prices
Increase their prices
Show no reaction
None of the above
Who wrote A Contribution to the Theory of Trade Cycle?
N.Kaldor
J.R.Hicks
A.C.Pigou
J.M.Keynes
If we measure the elasticity of demand with the help of the average and marginal revenue, the formula is:
Ed = AR/ (AR- MR)
Ed = MR/ (AR-MR)
Ed = AR/(MR-AR)
Ed = AR/ MR
Economies of large-scale production:
Lead to greater specialization
Offsets the effects of the law the law of comparative advantage
Lead to greater diversification of individual production
Cause firms to use more capital and less labor
If a firm is producing output at a point where diminishing returns have set in, this means that:
Each additional unit of output will be more expensive to produce
Each additional unit of output will require increasing amount of inputs
Marginal product of the variable factor of production decreases as the quantity increases
All of the above
Supply curves are most elastic:
In the long-run
In the short-run
For luxuries
In the immediate-run
Which of the following pairs of commodities is an example of substitutes?
Tea and sugar
Tea and coffee
Pen and ink
Shirt and trousers
The demand curve slopes downwards due to:
Income effect(I.E)
Substitution effect(S.E)
Taste effect
Both a and b
If the price of product A decreases and in the result the demand for product B increases then we can say that:
A and B are substitute goods
A and B are complementary goods
A is an inferior good
B is an inferior good
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
Price effect occurs on the higher IC in case of:
Slutsky approach
Hicksian approach
Marshallian approach
None of the above
Iso-product curve (isoquant) shows:
A given quantity of output that can be produced by various combinations of two inputs
Varying quantities of output that can be produced by the same combination of two factors
Combination of two factors that can give the least cost of production
Combination of two goods that cost the same amount to the producer
In joint-profit maximization cartel, central agency sets the:
Output
Input
Demand
Price
To calculate the elasticity of demand, which of the following formula is used?:
Percentage change in demand Original demand
Proportionate change in demand Proportionate change in price
Change in demand Change in price
None of the above
Change in quantity demanded (expansion and contraction of demand) is:
Due to change in price while other factors remain constant
Due to change in factors other than price
Both a and b
None of the above
When elasticity of demand is greater than one (e >1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
The kinked demand curve comes into being where:
Proportional demand curve (PDC) and individual demand curve (IDC) intersect each other
Proportional demand curve (PDC) and individual demand curve (IDC) are parallel to each other
Proportional demand curve (PDC) and individual demand curve (IDC) repel each other
None of the above
If the commodity is inferior then:
Income effect is positive but substitution effect is negative
Income effect is negative but substitution effect is positive
Both income effect and substitution effect are negative
Both income effect and substitution effect are positive
The demand of the necessities is:
More elastic
Less elastic
Unit elastic
Zero elastic
In monopolistic competition, the firm take advantage due to customers:
Similar choices
Unlimited choices
Differential choices
Few choices
If Cobb-Douglas production function is homogeneous of degree less than one (n<1), then it shows:
Constant returns to scale
Increasing returns to scale
Decreasing returns to scale
None of the above
We can obtain consumers demand curve from:
Income Consumption Curve (ICC)
Engels Curve
Price Consumption Curve (PCC)
Production Possibility Curve (PPC)
A good tends to have relatively inelastic demand, if:
Close substitutes are available
It has a high price
It is a luxury
It has no very close substitutes
Scarcity means:
Nil resources
Limited resources
Many resources
Extra resources
Which of the following is not characteristic of perfect competition?
Freedom of entry and exit
Each seller is a price taker
Perfect information about prices
Heterogeneous products
In case the two commodities are complements, cross elasticity will be:
Positive
Unitary
Negative
Infinite
If a commodity sold under monopoly is got free of cost, then MC will be:
Zero
Identical with the MR
A horizontal straight line
Infinite
Microeconomics deals with the:
Allocation of resources of the economy as between production of different goods and services
Determination of prices of goods and services
Behavior of industrial decision makers
All of the above
Perfect competition assumes:
All buyers and sellers have perfect knowledge of the market
Freedom of entry of firms into the industry
Homogeneous product
All of the above
All of the following are capital resources except:
Warehouses
Buildings
Dams
Share of stock