For the given production function, technical inefficiency 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
Correct Answer :
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)
{Diagram is given below}
Related Questions
If a ten percent increase in price causes a ten percent reduction in quantity demanded, elasticity of demand is:
Perfectly elastic
Elastic
Unitary elastic
Inelastic
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 Purchasing Power Parity (PPP) Theory is presented by:
J.M.Keynes
E.D.Domar
Adam Smith
Gustav Cassel
Supply and demand changes have their most rapid impact in:
Auction market
Contract markets
Market for commercial office space
Natural gas market
In general, most of the production functions measure:
The productivity of factors of production
The relation between the factors of production
The economies of scale
The relations between change in physical inputs and physical output
Price-taker firms:
Advertise to increase the demand for their product
Do not advertise, because most advertising is wasteful
Do not advertise because they can sell as much as they want at the current price
Who advertise will get more profits than those who do not
The advertisement and other selling activities:
Lessen the differentiation
Widen the differentiation
Does not effect the differentiation
All of the above
When sales tax is imposed on monopolist, its:
Output is effected
Equilibrium is effected
Input is effected
Reputation is effected
Which cost increases continuously with the increase in production?
Average cost
Marginal cost
Fixed cost
Variable cost
The slope of isocost line (budget line) shows:
Capital labor ratio
Labor wage ratio
Factor price ratio
Factor labor ratio
A market demand schedule is obtained by adding individual demand schedules:
Horizontally
Vertically
Permanently
Perpetually
In the long-run:
Fixed cost will be greater than variable cost
Variable costs will be greater than fixed costs
All costs are variable costs
All costs are fixed costs
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
In Recardian theory of value, the stress has been made on:
Marginal cost
Production cost
Labor cost
Supply cost
The slope of the iso-cost line (budget line) is determined by:
Pricing of two factors
Productivity of the two factors
Degree of substitutability of two factors
None of the above
General equilibrium is concerned with simultaneous equilibrium of:
Few economic agents
All the economic agents
Two economic agents
Many economic agents
If under perfect competition, in the short period, price does not cover the average cost completely, the firm will even then stay in the market as long as:
The average fixed cost is covered
The average variable cost is covered
Some profit is earned
The entrepreneurs enjoy producing
In second degree price discrimination, monopolist takes away :
All of the consumer surplus
All of the producer surplus
Some part of the consumer surplus
None of them
Isocost line shows the combinations of labor and capital where a firms budget is:
Fully spent
Half spent
Partially spent
Nearly spent
If at the unchanged price, the demand for a commodity goes up, or the quantity demanded remains the same when its price goes up, it is called:
Contraction of demand
Decrease in demand
Increase in demand
Extension of demand
Other things remaining the same, when a consumers income increases his equilibrium point moves to:
A lower indifference curve
A lower PPC curve
Remains on same indifference curve
A higher indifference curve
Under price discrimination, the buyers must:
Be similar
Not be similar
Equal
None of the above
If the marginal utility is divided by the price of the commodity then it is called:
Real Marginal Utility
Gross Marginal Utility
Weighted Marginal Utility
Money Marginal Utility
Theory of revealed preference is based on:
Weak orderings
Neutral orderings
Partial orderings
Strong orderings
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
Market demand curve is:
Vertical summation of individual demand curves
Upward summation of individual demand curves
Downward summation of individual demand curves
Horizontal summation of individual demand curves
Who wrote Mathematical Analysis for Economists?
J.P.Lewis
R.G.D.Allen
Paul A.Samuelson
E.D.Domar
Diseconomies of management lead to:
Decreasing returns to scale
Constant returns to scale
Increasing returns to scale
maximum returns to scale
The long run total cost is attained by:
LMC.Q
AC.Q
LC.Q
LAC.Q
If a good is an inferior good then an increase in incomes of the consumers will:
Increase demand for the good
Increase supply of the good
Reduce the equilibrium price of the good
None of the above