At the shut-down point in perfect competition:
P = AVC
TR =TVC
The total losses of the firm equal TFC
All of the above
Correct Answer :
D. All of the above
Shut-down point is when price equals minimum Average Variable Cost (P = AVC). At this point the firm is indifferent b/w producing or shutting down. This is because at that point total revenue (TR) is equal to Total Variable Cost (TVC), so by producing or shutting-down, the firm is making a loss equal to Total Fixed Costs (TFC) no matter what it chooses to do. Now if P
Related Questions
If as a result of a decrease in price, total outlay (expenditures) on a commodity increases, its price-elasticity of demand is:
Perfectly elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unit elastic
Relatively inelastic (less than one elasticity)
The number of sellers in duopoly is:
A few
Four
Two
Very large
The amount of income left over for a consumer in equilibrium is :
Consumer surplus
Zero
Two rupees
Excess demand
Using total revenue and total cost, a profit maximizing firm will be equilibrium at a point:
Where the gap between the two is the smallest
Where the gap between the two is the greatest
Where the two become equal
None of the above
The elasticity of demand is equal to slope of demand function divided by:
Average demand function
Qualified demand function
Constructive demand function
Relative demand function
Which of the following theories of trade cycle was presented by William Jevons?
Sunspot Theory
Monetary Theory
Saving-Investment Theory
Innovation Theory
MC curve is:
L-shaped
U-shaped
V-shaped
Both a and b depending on situation
The marshallian demand curve includes:
Substitution Effect
Income Effect
Both substitution and income effect
None of them
The Tit for Tat strategy means cooperation by the 2nd firm if:
1st firm does not cooperate
1st firm cooperates
1st firm collapses
None of the above
In short run:
Labor is variable
Labor is fixed
Capital is variable
None of the above
Chamberline introduces the concept of:
V-shaped selling cost
U-shaped selling cost
V-shaped purchasing material
U-shaped purchasing material
Substitution effect means a consumer
Shifts away from the commodity the price of which has fallen
Shifts in favour of a commodity the price of which has risen
Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen
None of the above
We can measure consumers surplus with the help of
TU curve
MU curve
Supply curve
None of the above
Microeconomics is also known as:
Price theory
Demand theory
Supply theory
Income theory
Who is the author of Choice of Technique?
K.N.Raj
Amartiya Sen
A.C.Pigou
Alfred Marshal
The advantage of using indifference curves rather than marginal utilities is:
We do not need to attach util values to consumption
Consumers can attain higher utility
It takes into account how much income the household has
We can determine how much of one good the consumer is willing to sacrifice in order to consume one more unit of another
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
Ceteris paribus clause in the law of demand means:
The price of substitute does not change
The taste of the consumer does not change
The income of the consumer does not change
All of the above
The supply curve for the short-run competitive firm is the same as:
Marginal cost curve
Average variable cost curve
That part of the marginal cost curve which equals or is greater than AVC
Average total cost curve
If the commodity is inferior then the increase in income of the consumer results in:
More purchase
Less purchase
Same purchase
None of the above
According to Smith, by value we mean the value with respect to use, and the price we mean the value with respect to:
Production
Consumption
Exchange
Formation
The slope of budget line shows the price ratios of:
Many goods
Few goods
Two goods
Three goods
On an indifference map higher indifference curves show:
The same level of price
The same level of satisfaction
The higher level of satisfaction
The lower level of satisfaction
The costs faced by the firm against fixed factors are:
Total costs
Fixed costs
Variable costs
Marginal costs
The average product is given as:
Q.L
Q- L
Q+ L
Q/L
For the given production function, technical efficiency is defined as:
Sets of points relating production function that maximizes output given input (labor) i.e. Q = f(L, K)
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)
Use of imported technology
None of the above
In the case of superior (normal) commodity, the income elasticity of demand is:
Positive
Unitary
Negative
Infinite
The firms in non-cooperative games:
Enforce contracts
Make contracts
Make negotiations
Do not make negotiations
The equilibrium conditions, MC = MR = AR = AC, will happen:
In the short-run under perfect competition
In the long-run under perfect competition
In the short-run under monopolistic competition
In the long-run under monopolistic competition
The shape of the TC curve is:
U
V
P
S(inverted)