MC curve is:
L-shaped
U-shaped
V-shaped
Both a and b depending on situation
Correct Answer :
D. Both a and b depending on situation
Marginal cost is relatively high at small quantities of output, then as production increases it declines due to economies of scale and reaches a minimum value, then starts rising due to diseconomies of scale. Thus MC curve forms the shape of V and in some cases forms the shape of U. This shape of MC curve is directly attributable to increasing marginal returns and then decreasing marginal returns.}
Related Questions
Nash Equilibrium is stable:
They involve dominant strategies
They involves constant-sum games
Once the strategies are chosen, no player has an incentive to deviate unilaterally from them
None of the above
The costs faced by the firm against variable factors are:
Variable costs
Fixed costs
Average costs
Marginal costs
The number of sellers in duopoly is:
A few
Four
Two
Very large
The proportionality rule in production requires that the ratios of MP and factor prices are:
Doubled
Equalized
Not equalized
None of the above
Indifference curves reflect:
Preferences
Income
Prices
Consumption
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
If the price of Pepsi Cola goes down, you would predict:
An increase in supply of coca cola
A decrease in supply of coca cola
An increase in demand for coca cola
A decrease in demand for coca cola
Government planners play a central role in allocating resources:
Only under socialism(communism)
Only under capitalism
Under both (a) and (b)
None of the above
Airlines that try to lower fares in order to increase revenues believe that demand for airline services is:
Price elastic
Price inelastic
Income elastic
Income inelastic
When total revenue (TR) falls in monopoly then elasticity of demand is:
E =1
E >1
E <1
E =0
The act of producing the output from more than one plant is concerned with:
Monopoly
Multi-plant monopoly
Bilateral monopoly
Price discrimination
In case of monopoly, the price charged against the additional unit is:
Not different
Same
Not same
Zero
By scarcity the economist means that all goods are scarce relative the peoples:
Desire for them
Purchases
Production
Consumption
In an indifference curve diagram, when the price of a product increases, the decline in quantity demanded that results if consumers utility or welfare is kept constant is referred to as the:
Utility effect
Budget line effect
Substitution effect
Income effect
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
Engel curves shows that:
How commoditys consumption rate differs at various levels of price
How commoditys consumption rate differs at various levels of satisfaction
How commoditys consumption rate differs at various levels of income
How commoditys consumption rate differs at various levels of taxes
Who wrote A Contribution to the Theory of Trade Cycle?
N.Kaldor
J.R.Hicks
A.C.Pigou
J.M.Keynes
In real life, brand loyalty is a barrier to:
Enter the new firms
Exit the new firms
Both a and b
None of the above
According to Saint Thomas Aquinas value is determined by God, but prices by:
Consumers
Employees
People
Labor
Price discrimination is undertaken with the aim of:
Increasing sales and maximizing profits
Reducing sales and raising prices
Minimizing cost and maximizing revenue
Serving the markets without earning profits
Duopoly is a market where there are:
Two sellers
A few sellers
Five sellers
Many sellers
In the perfect competition, there is a process of:
Restricted entry and exit of the firms
Semi free exit but absolute free entry
Free entry but restricted exit of the firms
Free entry and free exit of the firms
The main contribution of Malthus is in the field of:
Consumption expenditure
Theory of population
Division of labor
Theory of demand
The production techniques are technically efficient:
Bellow the lower ridge line
Above the upper ridge line
Between the two ridge lines
On the upper ridge line
Whish of the following represents the average revenue curve of a firm?
The curve representing the cost per unit of output
The demand curve of consumers for the firms product
Total receipts realized by the firm
All of the above
In Nash Equilibrium:
Each player has a dominant strategy
No players have a dominant strategy
At least one player has a dominant strategy
Players may or may not have dominant strategies
A significant property of the Cobb-Douglas production function is that the elasticity of substitution between inputs is:
Greater than one
Less than one
Zero
Equal to one
An inferior commodity is one whose quantity demand decreases when income of the consumer:
Decreases
Increases
Remains constant
Zero
A firm under perfect competition has:
An AR curve which is a horizontal straight line
An AR curve which slopes downward
An AR curve which has a kink
An AR curve shape of which cannot be predicted
The basic subject matter of economics is:
Money
Capital resources
Scarcity
Inflation