If production increases under increasing returns to scale, the cost will:
Increase at decreasing rate
Increase at constant rate
Decrease at increasing rate
Increase at increasing rate
Correct Answer :
A. Increase at decreasing rate
Related Questions
The consumer is in equilibrium at the where:
Budget line and indifference curve intersect each other
Budget line and indifference curve are tangent to each other
Budget line and indifference curve are opposite to each other
Budget line and indifference curve are parallel to each other
The pay-off matrix shows:
Possible outcomes
Possible benefits
Possible losses
None of them
Contraction of demand means:
Less quantity demanded at the same price
Less quantity demanded at a higher price
Less quantity demanded at a lower price
None of the above
In modern theory of costs, a firm normally utilizes:
2/3 of capacity of its plants
3/4 of capacity of its plants
1/3 of capacity of its plants
1/2 of capacity of its plants
The demand curve of giffen goods will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
In monopolistic competition (also in kinked demand curve model), a firm sells the amount where:
Individual demand curve (IDC) is equal to proportional demand curve (PDC)
Individual demand curve (IDC) is greater than proportional demand curve (PDC)
Individual demand curve (IDC) is less than proportional demand curve (PDC)
None of the above
Elasticity of demand is equal to unity while marginal revenue is:
Positive
Zero
Negative
Indeterminate
When the slope of a demand curve is zero (also known as vertical demand curve) then elasticity will be:
Zero (perfectly inelastic)
Equal to one (unitary elastic)
Infinite (perfectly elastic)
None of the above
Which of the following is not characteristic of perfect competition?
Freedom of entry and exit
Each seller is a price taker
Perfect information about prices
Heterogeneous products
Total variable costs in equation form are:
J.R.Hicks was:
Neo-classical economist
Classical economist
Keynesian economist
Post-Keynesian economist
The shape of the TC curve is:
U
V
P
S(inverted)
Market allocation fundamentally relies upon:
A system of relative prices
A belief that employees work for the good of society
Government ownership of the means of production
Moral incentives to encourage productive efficiency
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
Cross-elasticity of demand is measured as:
Percentage change in the quantity of a commodity demanded divided by the percentage change in the price of that commodity
Percentage change in the quantity of commodity X divided by percentage change in the price of commodity Y
Percentage change in the quantity demanded of commodity X
Percentage change in the quantity demanded of commodity X divided by percentage change in the quantity demanded of commodity Y
In Nash equilibrium, a player:
Deviates from his strategy
Does not deviate from his strategy
Does not think in a good way
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
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
Marshalls definition of economics was strongly criticised by:
Adam Smith
Prof.Pigno
Prof. Robbins
J.B.Clark
In substitution effect and income effect:
The substitution effect is more certain
The income effect is more certain
The substitution effect is uncertain
The income effect is always positive
In monopolistic competition, the firm compete on the basis of:
Price
Entry
Both a and b
None of the above
The long run total cost is attained by:
LMC.Q
AC.Q
LC.Q
LAC.Q
According to Marshal, the Law of Diminishing Marginal Utility:
Applies on both money and other commodities
Does not apply on money
Does not apply on bank money but applies on cash money
Applies on all the commodities except on money
A high value of cross-elasticity indicates that the two commodities are:
Very good substitutes
Poor substitutes
Good complements
Poor complements
Supply curves are most elastic:
In the long-run
In the short-run
For luxuries
In the immediate-run
If the demand curve is vertical then its slope is:
Infinite
Zero
Equal to one
None of the
If the consumers expect that the price of computers will decrease in next year then:
Current demand for computers will fall
Current demand for computers will rise
Current demand will change unpredictably
Current supply of computers will rise
Price discrimination occurs when:
Different prices are charged to different consumers for homogenous products
Same prices are charged for differentiated products
Different prices are charged for homogenous goods for successive units to the same customer
Any of the above condition is present
In the case of an inferior good, the income effect:
Partially offsets the substitution effect
Reinforces the substitution effect
Is equal to the substitution effect
More than offsets the substitution effect
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