Given a U shaped average cost curve, the relationship between average cost and marginal cost is such that marginal cost must always be:
Falling when average cost is falling
Rising when average cost is falling
Falling when average cost is rising
Rising when average cost is rising
Correct Answer :
D. Rising when average cost is rising
Related Questions
Law of Variable Proportions is regarding in:
Short-Run
Long-Run
Medium-Run
None of the above
Demand for a commodity is elastic when it has
Only one use
Many uses
Uses which cannot be postponed
Uses very essential for the consumer
An exceptional demand curve is:
Downward sloping
Upward sloping
Horizontal straight line
Vertical straight line
If the commodity is normal then price effect is:
Negative
Inverse
Positive
Both (a) and(b)
At the point where a straight line demand curve meets the quantity axis (x-axis), elasticity of demand is:
Equal to zero
Equal to one
Equal to infinite
More than one
When a competitive firm is in equilibrium in the long-run, its output is such that:
Costs per unit of output are lowest
Total profits are highest
Marginal cost is lowest
Profit per unit of output is zero
The elliptical isoquant represents the:
Economic combinations of labor and capital
Uneconomic combinations of labor and capital
Both a and b
None of the above
The difference between accounting profits and economic profits is:
Implicit costs
Explicit costs
Fixed costs
Variable costs
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
According to Leontief technology, there:
Is only one technique of production
Are few techniques of production
Are many techniques of production
Are two techniques of production
Along an isoquant, output remains same, and capital labor ratio:
Is also same
Is different
Is constant
Is zero
In the case of complements, the cross demand curve slopes:
Downwards to the right
Upwards to the right
Backwards to the top
Inwards at the bottom
The law of Diminishing Marginal Utility implies that the marginal utility of a good decreases as:
It gets more expensive
A household consumes more of it
Preference changes
A households income goes up
Which of the following is not a feature of isoproduct curves?
Are downward sloping to the right
Show different input combination producing the same output
Intersect each other
Are convex to the origin
When the slope of a demand curve is infinite (also known as horizontal demand curve) then elasticity will be:
Zero (perfectly inelastic)
Equal to one (unitary elastic)
Infinite (perfectly elastic)
None of the above
The largest possible loss that a firm will make in the short run is:
Zero
Its total fixed cost
Its total variable cost
Equal to one
The Chamberline model recognizes mutual:
Independence of firms
Interdependence of firms
Independence of individuals
Interdependence of materials
The budget constraint can be written as:
X.PX + Y.PY = 1
X.PX + Y.PY < 1
X.PX + Y.PY > 1
X.PX + Y.PY = 0
According to Diamond Water Paradox diamonds are more expensive than water because:
They yield higher total utility
They yield higher marginal utility
They are more useful
None of the above
A high value of cross-elasticity indicates that the two commodities are:
Very good substitutes
Poor substitutes
Good complements
Poor complements
When the level of optimal factor combination is over and more labor is employed with the fixed plant, the efficiency of labor:
Increases
Decreases
Remains constant
Becomes zero
Price mechanism has also given the name:
Labor theory
Production theory
Laisseze-faire
None of the above
All money costs can be regarded as:
Social costs
Opportunity costs
Explicit costs
Implicit costs
The expansion point is attained by joining:
Similar optimal combinations
Different optimal combinations
Both of them
None of them
In Edgeworth model, prices oscillate between:
Firms and industry price
Monopoly and duopoly price
Competitive and monopoly price
None of the above
When total product falls:
MP is positive
MP is negative
MP is falling
MP is rising
The pay-off matrix shows:
Possible outcomes
Possible benefits
Possible losses
None of them
The cost of firms in cournot model are:
identical
differential
very high
very low
In monopolistic competition, the customers are attached with one product because of:
Product similarity
Product differentiations
Product inferiority
None of the above
In monopolistic competition, the individual demand curve is also known as:
Planned products curve
Planned material curve
Planned costs curve
Planned sales curve