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
Correct Answer :
A. 2/3 of capacity of its plants
Related Questions
The cost that a firm incurs in purchasing or hiring any factor of production is referred to as:
Explicit cost
Implicit cost
Variable cost
Fixed cost
At a point above the middle of a straight line demand curve, elasticity of demand is:
Less than one
Equal to one
More than one
Equal to infinite
We get constant returns to scale when:
a = ½
� = ½
Both of them
None of them
Efficient allocation of resources is likely to be achieved under:
Monopoly
Monopolistic competition
Perfect competition
Any market form
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
The cobweb model will divergent when the slope of:
Demand curve is more than supply curve
Supply curve is more than demand curve
Supply curve is equal to demand curve
None of the above
In modern theory, LAC = LMC after the attainment of:
Maximum optimal scale
Average optimal scale
Minimum optimal scale
None of the above
The MRTS along an iso-quant goes on to:
Appear
Diminish
Prominent
Increase
Under competitive conditions, the industry will be in equilibrium:
When each firm is in equilibrium equating MC with MR
When all the firms are earning only normal profits
When firms outside have no tendency to enter the industry and those within, have no tendency to leave the industry
All of the above
On all points of budget (price) line:
Total expenditures increases
Total expenditures decreases
Total expenditures are zero
Total expenditures remain same
With which of the following concepts is the name of J.M.Keynes particularly associated?
Marginal propensity to consume
Marginal propensity to save
Liquidity preference
All of the above
Duopoly is a market where there are:
Two sellers
A few sellers
Five sellers
Many sellers
Rotten eggs are:
Free goods
Economic goods
Luxury goods
None of the above
In monopoly, when average revenue curve falls:
MR constant
MR rises
MR falls
MR is zero
In monopolistic competition, the firm compete on the basis of:
Price
Entry
Both a and b
None of the above
A mixed economy is characterized by the coexistence of:
Modern and traditional industries
Public and private sectors
Foreign and domestic investments
Commercial and subsistence farming
In monopolistic competition, the firms have to face:
Same cost conditions
Different cost conditions
Same price conditions
Same products conditions
Price elasticity of demand can be measured in the following way:
Percentage change in quantity demanded of a commodity divided by percentage change in price of that commodity
Change in quantity demanded of a commodity divided by change in price of that commodity
Percentage change in price of a commodity divided by percentage change in quantity demanded of that commodity
None of that commodity
In microeconomics, we study:
Aggregates of the economy
Few units of the economy
Large units of the economy
Individual units of the economy
The Cambridge School of Thought refers to the group of English economists who came under the influence of:
Alfred Marshal
J.M.Keynes
Paul A.Samuelson
A.C.Pigou
If the production function is homogeneous, the expansion path will be a straight line through the origin whose slope determines the optimal:
L/K ratio
K/L ratio
P/L ratio
P/K ratio
The difference between the average total cost and average variable cost as output increases will:
Increases
Remains the same
Diminishes
Zero
In a socialist (communist) economy the invisible hand:
Guides most resource allocation decisions
Operates effectively only in the labor market
Operates effectively only in the market for capital
Is prevented from operating effectively
An exceptional demand curve is:
Downward sloping
Upward sloping
Horizontal straight line
Vertical straight line
If the prices of goods rise then:
The real income of consumer falls
The real income of consumer rises
The real income of a consumer remains constant
The real income of consumer becomes zero
The Input-Output Analysis was originated by:
W.W. Leontief
E.D.Domar
R.G.D.Allen
J.M.Keynes
Marginal cost is the cost:
Of the last unit of production
Of marginal unit
Of marginal efficient units
Of the average units of production
Which of the following is not an explicit cost of production?
Wage of self-employed proprietor
Depreciation on machinery
Returns on owned capital
Cost of raw materials
Which of the following theories of trade cycle was presented by William Jevons?
Sunspot Theory
Monetary Theory
Saving-Investment Theory
Innovation Theory
If the demand curve is horizontal then its slope is:
Infinite
Zero
Equal to one
None of the above