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What is the correct answer?

4

In the real world, some competitive firms owns specialized resources that earn a return called:

A. Economic profit

B. Rent

C. Accounting profit

D. Normal profit

Correct Answer :

B. Rent


Related Questions

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4

The longer the period of time, the elasticity of supply will be:

A. Constant

B. Less elastic

C. More elastic

D. Perfectly elastic

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4

Marginal cost is found with the help of changes in:

A. Total cost or total variable cost

B. Total explicit cost

C. Total fixed cost

D. Total implicit cost

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4

The Chamberline model recognizes mutual:

A. Independence of firms

B. Interdependence of firms

C. Independence of individuals

D. Interdependence of materials

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4

If the commodity is normal then the Income Effect (I.E) and the Substitution Effect (S.E):

A. Both move together and reinforce each other

B. One moves and the other remains constant

C. Move in the opposite direction and neutralize each other

D. Both remain constant

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4

In measuring price-elasticity:

A. Price is a dependent variable and quantity is an independent variable

B. Price is an independent variable and quantity is a dependent variable

C. Price and quantity both are independent variables

D. Price and quantity both are dependent variables

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4

In the short-run, the competitive firm can maximize its profits (or minimize its losses) by:

A. Equating price and marginal revenue

B. Equating price and average total cost

C. Increasing marginal cost and lowering fixed costs

D. Equating marginal cost and marginal revenue

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4

A firm can never produce in the middle area of input space, in case of:

A. Concave isoquant

B. Convex isoquant

C. Constant isoquant

D. None of the above

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4

The isoquant approach is:

A. Classical approach

B. Keynesian approach

C. Neo-classical approach

D. Modern approach

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4

Which is the correct statement?

A. The U shape of long-run cost curve is less pronounced than the short-run cost curves

B. The U shape of the short-run cost curves is less pronounced than the long-run cost curves

C. The U shape of the long-run cost curve is more pronounced than the short-run cost curves

D. The long-run cost curves are never U shaped

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4

The marginal revenue of a perfectly competitive firm is:

A. Equal to the prices of its products

B. Positively related to output

C. Negatively related to output

D. Always higher than marginal cost

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4

Extension (expansion) of demand means:

A. More quantity demanded at a lower price

B. More quantity demanded at a higher price

C. More quantity demanded at the same price

D. None of the above

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4

Who developed the concept of Representative Firm?

A. A.C.Pigou

B. Alfred Marshal

C. J.M.Keynes

D. D.H.Robertson

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4

Consumers Surplus can also be defined as:

A. Extra price benefits

B. Shortage of quantity

C. Surplus of quantity

D. Difference between actual price and potential price

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4

According to critics, the assumption of costless production is:

A. true

B. not true

C. reliable

D. deniable

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4

In case of complementary factors, the isoquants are:

A. L-shaped

B. J-shaped

C. M-shaped

D. V-shaped

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4

Which of the following oligopoly models is concerned with the maximization of joint profits?

A. Price leadership model

B. Bertrands model

C. Collusive model

D. Edgeworths model

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4

The Tit for Tat strategy means cooperation by the 2nd firm if:

A. 1st firm does not cooperate

B. 1st firm cooperates

C. 1st firm collapses

D. None of the above

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4

The Law of Equi-Marginal Utility states:

A.

B. per income rupee

C.

D.

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4

The Law of Equi-Marginal Utility refers to:

A. Marginal utility of commodity X

B. Marginal utility of commodity Y

C. Marginal utility per rupee spent on X and Y commodities

D. None of the above

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4

The number of sellers in duopoly is:

A. A few

B. Four

C. Two

D. Very large

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4

The combination of labor and capital where the cost of a given output is minimized is known as:

A. Least cost factor combination

B. Optimum factor combination

C. Both a and b

D. None of them

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4

The sufficient condition of firms equilibrium requires:

A.

B.

C.

D. none of the above

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4

The equilibrium conditions, MC = MR = AR = AC, will happen:

A. In the short-run under perfect competition

B. In the long-run under perfect competition

C. In the short-run under monopolistic competition

D. In the long-run under monopolistic competition

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4

Classical production function is:

A. Q = f(L)

B. U =f(X)

C. Q =f(K)

D. Q =f(L,K)

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4

In cournot model, each firm makes decision regarding:

A. Price

B. Output

C. Cost

D. Advertisement

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4

All the firms with identical costs under perfect competition well, in the long-run, earn only:

A. Normal profits

B. Abnormal profits

C. Differential profits

D. No profits

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4

Human wants are:

A. Thousands

B. Few

C. Innumerable

D. Hundreds

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4

The budget-line is also known as the:

A. Iso-utility curve

B. Production possibility line

C. Isoquant

D. Consumption possibility line

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4

Slope of a demand curve is:

A. Not relevant to elasticity

B. The only factor determining elasticity

C. Only one of the factors influencing elasticity

D. None of the above

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4

In cournot model, each firm expects a reaction from his rival but the expected reaction is not:

A. important

B. materialized

C. accepted

D. rejected