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If in the long run, output increases in the same proportion as increase in all the input in the given proportion, this is known as:

A. Increasing returns to scale

B. Decreasing returns to scale

C. Constant returns to scale

D. Variable returns to scale

Correct Answer :

C. Constant returns to scale


Related Questions

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Isocost line shows the combinations of labor and capital where a firms budget is:

A. Fully spent

B. Half spent

C. Partially spent

D. Nearly spent

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Conditions of perfect competition ensure:

A. That each firm can influence the price

B. No single firm can influence the price

C. Any single firm can influence the supply condition in the market

D. Any single firm can influence both supply and price in the market

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4

In the long-run competitive equilibrium, the theory predicts that:

A. TC = TR and MC = MR

B. Firms operate at a minimum average total cost

C. There is no incentive for entry or exit of firms

D. All these conditions exist

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The Hicksian demand curve includes:

A. Substitution effect

B. Income effect

C. Both substitution and income effect

D. None of them

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In Prisoners Dilemma, both the prisoners are interrogated:

A. Separately in different cells

B. Collectively in different cells

C. Collectively in same cell

D. Separately in same cell

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According to Diamond Water Paradox diamonds are more expensive than water because:

A. They yield higher total utility

B. They yield higher marginal utility

C. They are more useful

D. None of the above

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If regardless of changes in its price, the quantity demanded of a commodity remains unchanged, then the demand curve for the commodity will be:

A. Horizontal

B. Vertical

C. Positively sloped

D. Negatively sloped

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When total product (TP) is maximum:

A. MP is negative

B. MP is infinite

C. MP is zero

D. None of the above

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4

Economics is a:

A. Exact science

B. Inexact science

C. Pure science

D. All of the above

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According to current thinking, the law of diminishing returns applies to:

A. All fields of production

B. Agriculture

C. Mining

D. Manufacturing

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If a monopolist is producing under decreasing cost conditions, increase in demand is beneficial to the society because:

A. Consumers get better quality goods

B. Cost of production falls and hence price will follow

C. Goods will be sold in many markets

D. None of the above

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4

Which of the following theories of trade cycle was presented by William Jevons?

A. Sunspot Theory

B. Monetary Theory

C. Saving-Investment Theory

D. Innovation Theory

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In monopolistic competition, the real differentiation in products is due to difference in:

A. Style

B. Consumer

C. Cost

D. Material

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Of the following, which one corresponds to fixed cost?

A. Payments for raw materials

B. Labor cost

C. Transportation charges

D. Insurance premium on property

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In case of budget line, we get pairs of two goods where consumers income is:

A. Fully spent

B. Half spent

C. Partially spent

D. Correctly spent

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Diminishing returns occur when a firm:

A. Starts incurring losses

B. Uses more and more of one input while holding all other inputs constant

C. Does not utilize its inputs efficiently

D. Cuts down on the quantity of all inputs it uses

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In monopolistic competition, the individual demand curve is also known as:

A. Planned products curve

B. Planned material curve

C. Planned costs curve

D. Planned sales curve

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The total utility is gained by consuming:

A. The last unit of a good

B. All the units of a good

C. The first unit of a good

D. The average unit of a good

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For monopolistic competitive firm:

A. P=AR and P>MR

B. P

C. P=MC and MC=AC

D. None of the above

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We can find total utility by:

A. Multiplying the number of unit by its marginal utility

B. Adding up the marginal utility of all units

C. Multiplying price by number of units

D. None of the above

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The average fixed cost (AFC) curve is asymptote to:

A. X-axis

B. Y-axis

C. Z-axis

D. None of the above

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At the point where the straight line from the origin is tangent to the TC curve, AC is:

A. Maximum

B. Minimum

C. Equal

D. Lower

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When AC curve falls, MC curve falls:

A. More than AC curve

B. Less than AC curve

C. Equal to AC curve

D. None of the above

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The entry of new firms in cournot model is:

A. Banned

B. Free

C. Partially free

D. Allowed

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In the case of a giffen good, the income effect:

A. Is equal to the substitution effect

B. More than offsets the substitution effect

C. Reinforces the substitution effect

D. Only partially offsets the substitution effect

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If the commodity is normal then price effect is:

A. Negative

B. Inverse

C. Positive

D. Both (a) and(b)

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If the marginal utility of apples to a consumer exceeds that of bananas then the consumer:

A. Is not in equilibrium

B. Will not buy any banana

C. Will buy some banana but less than he buys of apples

D. Is willing to pay more for apples than bananas

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Pure monopoly exists:

A. When there is a single producer

B. When there is a single producer without any close substitute

C. When there is a single producer with close substitutes

D. When a few producers control the industry

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In Edgeworth model, prices oscillate between:

A. Firms and industry price

B. Monopoly and duopoly price

C. Competitive and monopoly price

D. None of the above

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The Purchasing Power Parity (PPP) Theory is presented by:

A. J.M.Keynes

B. E.D.Domar

C. Adam Smith

D. Gustav Cassel