If by doubling all inputs in the long run output is less than double, it is a case of:
Increasing returns to scale
Decreasing returns to scale
Constant returns to scale
Variable returns to scale
Correct Answer :
B. Decreasing returns to scale
Related Questions
Any expansion in output by a firm in the short period will always reduce the:
Average variable cost
Average fixed cost
Both average fixed and variable cost
None of the above
A typical demand curve cannot be:
Convex to the origin
Concave to the origin
A straight line
Rising upwards to the right
In sweezy model (kinked demand curve model), the role of MC curve:
Can be ignored
Cannot be ignored
Partially be ignored
None of the above
If production increases under constant returns to scale, the cost will:
Increase at a constant rate
Decrease at a constant rate
Increase at a variable rate
Decrease at a variable rate
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
Labor theory was firstly rejected by:
Adam Smith
Karl Marx
Ricardo
Pigou
Under the law of variable proportions, the average and the marginal product of the variable factor would ultimately:
Become equal
Decrease
Become constant
Increase
Marginal cost is always:
Less than the average cost
More than the average cost
Equal to the average cost at minimum point
Never equal to the average cost
The average fixed cost (AFC) curve is asymptote to:
X-axis
Y-axis
Z-axis
None of the above
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
Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?
MC =AC and P
MC = AC and P=MR
P =MC and P
MC=MR and P =AR= ATC
Who developed the concept of Representative Firm?
A.C.Pigou
Alfred Marshal
J.M.Keynes
D.H.Robertson
Increasing return to scales can be explained in terms of:
Optimal factor proportions
Fixed scale of plant
External and internal economies
Labor productivity
Price is measured in:
Physical units
Monetary units
Constant units
Current units
An iso-product (an isoquant) curve slopes:
Downward to the left
Downward to the right
Upward to the right
Upward to the left
Which of the following oligopoly models is concerned with the maximization of joint profits?
Price leadership model
Bertrands model
Collusive model
Edgeworths model
Under conditions of perfect competition, price in the long-run is equal to:
Minimum of average variable cost
Minimum of marginal cost
Minimum of average fixed cost
Minimum of average cost
Competitors in monopolistic competition have full control over:
The price of their product
Product quality
The shape of the market demand curve
The elasticity of product substitution
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
Microeconomics deals with the:
Allocation of resources of the economy as between production of different goods and services
Determination of prices of goods and services
Behavior of industrial decision makers
All of the above
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
While buying two goods X and Y with unequal prices, to maximize total utility from his income, a consumer should get:
Equal MU from both commodities X and Y
More MU from commodity X than from commodity Y
More MU from commodity Y than from commodity X
Equal marginal utility from the last rupee spent on commodity X and commodity Y
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
At low prices, demand is likely to be:
More elastic
Less elastic
Unit elastic
Perfectly inelastic
When total product falls:
MP is positive
MP is negative
MP is falling
MP is rising
The sufficient condition of firms equilibrium requires:
none of the above
In case of monopoly, the price charged against the additional unit is:
Not different
Same
Not same
Zero
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
Which of the following is called Gossens first law?
Law of production
The Law of Equi-Marginal Utility
The Law of Diminishing Marginal Utility
Law of Variable Proportions
Each short run average cost curve:
Has to touch the long run cost curve
Has to cross the long run cost curve
Has to lie above all points on the long run cost curve
Coincides with the long run cost curve at some point