Normal profits are considered as:
Explicit costs
Implicit costs
Social costs
Private cost
Correct Answer :
B. Implicit costs
(At normal profit � TR = TC. Normal profit is included in implicit cost.)
Related Questions
The basic and essential economic problems in a community are related to choice and:
Freedom
Scarcity
Social class
Politics
Elasticity of supply means change in supply due to change in:
Price of the commodity
Conditions of supply
Taste of the consumer
Demand for the commodity
If the commodity is inferior then Income Effect (I.E) is:
Negative
Positive
Zero
Infinite
Efficient allocation of resources is achieved to a greater extent under:
Monopoly
Perfect competition
Monopolistic competition
Oligopoly
Total costs in the short-term (short-run) are classified into fixed costs and variable costs. Which one of the following is a variable cost?
Cost of raw materials
Cost of equipment
Interest payment on past borrowing
Payment of rent on buildings
The Latin term citeris paribus means:
Other things being equal
Because of this
Due to this
All the factors changes at the same rate
Average Revenue means:
Per unit revenue received from all the units sold by the producer
Revenue of the units having average size
Total number of units× Revenue per unit
Total revenue × Number of units sold
The competitive equilibrium leads to:
The firms producing with excess capacity
The firms producing at their minimum costs
Firms producing at a cost higher than the minimum
Some firms producing under decreasing costs and others under increasing costs
The optimum level of output in long run takes place where:
LAC = LMC
SAC = LMC
SAC =MC
SAC =LAC
The price under perfect competition is settled by:
Producers
Sellers
Buyers
Sellers and buyers
Marshalls definition of economics was strongly criticised by:
Adam Smith
Prof.Pigno
Prof. Robbins
J.B.Clark
Total fixed costs are:
The Chamberline model recognizes mutual:
Independence of firms
Interdependence of firms
Independence of individuals
Interdependence of materials
Kinked Demand Curve is consistent with which one of the following market situations?
Pure competition
Pure monopoly
Oligopoly
Monopolistic competition
According to Marshallian approach, utility:
Can be added
Can be subtracted
Can be multiplied
Can be divided
The long-run average cost is based on the fact that:
None of the factors are variable in the long-run
All factors are perfectly divisible in the long-run
None of the factors is divisible
Management factor is indivisible while all other factors are divisible and can be varied in long-run
The central problem of economics is:
Declining productivity
Increasing consumption
Limited material wants
Limited resources and unlimited wants
According to Marginalists, the price of any commodity is determined by:
Marginal usefulness
Marginal cost
Both of them
None of them
Which one of the following is also known as Plant Curves:
Long-run average cost (LAC) curves
Short-run average cost (SAC) curves
Average variable cost (AVC) curves
Average total cost (ATC) curves
If a straight line supply curve makes an intercept on the X-axis, the elasticity of supply is:
Equal to unity
Less than unity
More than unity
Zero
If as a result of an increase in prices, total outlay (expenditures) on a commodity decreases, its price-elasticity of demand is:
Perfect elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unit elastic
Relatively inelastic (less than one elasticity)
Because the price elasticity of demand for OPEC oil is approximately .08, in order to increase revenues OPEC should:
Lower price in order to increase revenues
Lower price in order to decrease the amount of oil sold
Rise price in order to increase the amount of oil sold
Raise price in order to increase revenues
An optimum level of a firms output is:
Where marginal cost is minimum
Where average cost is minimum
Where both the marginal and the average cost curves are at their respective minimum
Where the firm earns the maximum profits
A firm can never produce in the middle area of input space, in case of:
Concave isoquant
Convex isoquant
Constant isoquant
None of the above
When total revenue is maximum in monopoly, elasticity of demand is:
E =1
E >1
E <1
E =0
The Prisoners Dilemma was presented by A.W.Tucker in:
1910
1945
1900
1940
The main contribution of David Ricardo is in the field of:
Wages of labor
Factor pricing
Theory of rent
Determination of the rate of interest
The relationship between AC and MC curves depend upon the behavior of:
AP curves
MP curves
Both of them
None of them
External economies are witnessed in:
A rising supply curve
A rising demand curve
A falling supply curve
A falling demand curve
Iso-product curve (isoquant) shows:
A given quantity of output that can be produced by various combinations of two inputs
Varying quantities of output that can be produced by the same combination of two factors
Combination of two factors that can give the least cost of production
Combination of two goods that cost the same amount to the producer