Elasticity of demand is equal to unity while marginal revenue is:
Positive
Zero
Negative
Indeterminate
Correct Answer :
B. Zero
Related Questions
If the production increases under decreasing returns to scale, the cost will:
Increase at decreasing rate
Increase at constant rate
Decrease at increasing rate
Increase at increasing rate
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
Excess capacity is concerned with the:
V-shaped traditional cost curves
S-shaped traditional cost curves
Modern cost curves
U-shaped traditional cost curves
If the demand curve is horizontal then its slope is:
Infinite
Zero
Equal to one
None of the above
A firm is a sum of persons who convert:
Goods into services
Output into inputs
Inputs into outputs
None of the above
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 firm is said to be in equilibrium when the difference between revenue and cost is:
Maximum
Minimum
Zero
One
The production function of homogeneous of degree one (n=1) is also called:
Linearly homogeneous
Zero homogeneous
Infinite homogeneous
None of the above
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
If, at the prevailing price, more of a good is desired than is available for sale:
The price is below equilibrium
The price is at equilibrium
The price must fall
We cannot tell anything about the price
The monopolist who is producing the same output from two (or more than two) plants is concerned with:
Single-plant monopolist
Multi-plant monopolist
Two-plant monopolist
Some-plant monopolist
Price elasticity of demand can be measured in the following way:
Percentage change in quantity demanded of a commodity divided by percentage change in price of that commodity
Change in quantity demanded of a commodity divided by change in price of that commodity
Percentage change in price of a commodity divided by percentage change in quantity demanded of that commodity
None of that commodity
Pure monopoly exists:
When there is a single producer
When there is a single producer without any close substitute
When there is a single producer with close substitutes
When a few producers control the industry
The costs faced by the firm against fixed factors are:
Total costs
Fixed costs
Variable costs
Marginal costs
Total profits are maximized at the point where:
TR equals TC
The TR curve and the TC curve intersect such that TR and TC lie at the same point
The TR curve and the TC curve are parallel and TC exceeds TR
The TR curve and the TC curve are parallel and TR exceeds TC
In respect of which of the following category of goods is consumers surplus highest?
Giffen goods
Necessities
Luxuries
Prestige goods
One way the government can induce a monopolist to expand his output is by imposing:
A specific tax on the monopolists output
A price ceiling that make the monopolist lower his price
A price floor that make the monopolist raise his price
A heavy tax on the monopolists profit
The feasible part of the demand curve for the monopolist who is charging high price will be:
The elastic part of a demand curve
The inelastic part of a demand curve
The constant elastic part of the demand curve
None of the above
A maximin strategy:
Maximizes the minimum gain that can be earned
Maximizes the gain of one player, but minimizes the gain of the opponent
Minimizes the maximum gain that can be earned
None of the above
When there is decrease in demand the demand curve:
Moves (shifts) towards the axis
Moves (shifts) away from the axis
Remains unchanged
All of the above
If there are many firms producing similar but differentiated products, the competition is generally said to be:
Oligopoly
Pure competition
Perfect competition
Monopolistic competition
If the commodity is normal then Income Effect (I.E) is:
Negative
Positive
Zero
Infinite
Moving along the indifference curve leaves the consumer:
Better off
Worse off
In equilibrium
Neither better off nor Worse off
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 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
Each firm in cournot model starts selling:
1/2 of the total market demand
1/4 of the total market demand
1/3 of the total market demand
None of the above
At a point above the middle of a straight line demand curve, elasticity of demand is:
Less than one
Equal to one
More than one
Equal to infinite
Government planners play a central role in allocating resources:
Only under socialism(communism)
Only under capitalism
Under both (a) and (b)
None of the above
The monopolist firm is price setter. The price setter firm is one which:
Can influence the market price
Cannot influence the market price
Can sell at zero price
None of the above
Which of the following is not a U shaped curve:
Marginal cost curve
Average variable cost curve
Fixed cost curve
Average cost curve