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
Correct Answer :
D. All of the above
Related Questions
In the case of superior (normal) commodity, the income elasticity of demand is:
Positive
Unitary
Negative
Infinite
Identify the author of The Principles of political Economy and Taxation:
Alfred Marshal
J.S.Mill
David Ricardo
A.C.Pigou
With firms having cost differences under perfect competition, a firm, which earns normal profit in the long-run is called:
An optimum firm
A representative firm
An oxford firm
A marginal firm
The point on which the average cost is minimum in a firm, short run average cost curve will also be the minimum cost point on the firms long-run average cost curve. This is true:
Always
Never
When LAC is falling
Only at that level of output when LAC is at its minimum
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
The longer the period of time, the elasticity of supply will be:
Constant
Less elastic
More elastic
Perfectly elastic
If Cobb-Douglas production function is homogeneous of degree greater than one (n>1), then it shows:
Constant returns to scale
Increasing returns to scale
Decreasing returns to scale
None of the above
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
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 falling part of total Utility (TU) curve shows:
Increasing marginal utility
Decreasing marginal utility
Zero marginal utility
Negative marginal utility
Which is the correct statement?
The U shape of long-run cost curve is less pronounced than the short-run cost curves
The U shape of the short-run cost curves is less pronounced than the long-run cost curves
The U shape of the long-run cost curve is more pronounced than the short-run cost curves
The long-run cost curves are never U shaped
Discriminating monopoly implies that the monopolist charges different prices for his commodity:
From different groups of consumers
For different uses
At different places
Any of the above
In sweezy model (kinked demand curve model), the overall increase in costs of production:
Do not effect equilibrium
Affect equilibrium
Both a and b
None of the above
When the demand curve is rectangular hyperbola, it represents:
Unitary elastic demand
Perfectly elastic demand
Perfectly inelastic demand
Relatively elastic demand
The greater the percentage of income spent on a commodity:
The greater its elasticity is likely to be
The weaker its elasticity is likely to be
The unchanged its elasticity is likely to be
None of the above
An optimum level of a firms output is:
Where marginal cost is minimum
Where average cost is minimum
Where both the marginal and the average cost curves are at their respective minimum
Where the firm earns the maximum profits
A firms profit is equal to:
R-C
R>C
R
R=C
At a point where a straight line demand curve meets the price axis (Y-axis), the elasticity of demand is:
Equal to one
Less than one
Equal to zero
Equal to infinite
The Hicksian indirect utility function in the form of equation is:
x =f(P)
x =a-bp
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
A vertical supply curve parallel to the price axis implies that the elasticity of supply is:
Zero
Infinite
Equal to one
Greater than zero but less than infinite
The slope of indifference curve shows:
Income level
Satisfaction level
Marginal rate of substitution
Demand level
The kink demand curve faced by an oligopolist is based on the assumption that:
Competitors will follow a price increase but not a price cut
Competitors will follow a price increase as well as a price cut
Competitors will ignore both a price increase and a price cut
Competitors will ignore a price increase but will follow a price cut
In case the two commodities are complements, cross elasticity will be:
Positive
Unitary
Negative
Infinite
General equilibrium is concerned with simultaneous equilibrium of:
Few economic agents
All the economic agents
Two economic agents
Many economic agents
For monopolistic competitive firm:
P=AR and P>MR
P
P=MC and MC=AC
None of the above
Identify the author of The Social Framework:
R.G.D.Alien
J.R.Hicks
A.C.Pigou
None of the above
All the firms with identical costs under perfect competition well, in the long-run, earn only:
Normal profits
Abnormal profits
Differential profits
No profits
Which of the following oligopoly models is concerned with the maximization of joint profits?
Price leadership model
Bertrands model
Collusive model
Edgeworths model
Nash equilibrium says:
I am doing the best, I can given what you are doing
You are doing the best, you can given what I am doing
Both a and b
None of the above