One way the government can induce a monopolist to expand his output is by imposing:
A specific tax on the monopolists output
A price ceiling that make the monopolist lower his price
A price floor that make the monopolist raise his price
A heavy tax on the monopolists profit
Correct Answer :
B. A price ceiling that make the monopolist lower his price
Related Questions
When the consumer is in equilibrium not only his income is fully spent, but the ratio of marginal utility and price is:
Increased
Equalized
Prominent
Zero
Change in demand (rise and fall of demand) is:
Due to change in price while other factors remain constant
Due to change in factors other than price
Both a and b
None of the above
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
MC is given by:
The slope of the TVC curve
The slope of the TVC curve but not the slope of the TC curve
The slope of the TC curve but not by the slope of the TVC curve
Either the slope of the TVC curve or the slope of the TC curve
With the decrease in marginal valuation of a specific commodity, the price offered by the people:
Decreases
Increases
Become very high
Remain unchanged
Excess capacity is not found under:
Monopoly
Monopolistic competition
Perfect competition
Oligopoly
A market demand curve presumes that:
All consumers are alike
Incomes of all consumers is the same
Tastes of all consumers are the same
Consumers differ in taste, incomes and other matters
The addition or increment to the total cost involvesd in expanding or contracting output by one unit is called:
Fixed cost per unit
Variable cost per unit
Total cost per unit
Marginal cost
Diminishing returns occur when a firm:
Starts incurring losses
Uses more and more of one input while holding all other inputs constant
Does not utilize its inputs efficiently
Cuts down on the quantity of all inputs it uses
Under perfect competition, a firm will be in equilibrium if:
MC = MR
MC cuts the MR from below
MC rises when it cuts the MR
All the above three conditions are fulfilled
Production function relates:
Cost to input
Wages to profits
Cost to output
Inputs to output
Perfect competition implies:
Differentiated goods
Homogeneous goods
Advertised goods
Distress sale of goods
Price discrimination is possible:
When elasticities of demand in different markets are the same at the ruling price
When elasticities of demand are different in different markets at the ruling price
When elasticities cannot be known
When elasticities of demands are zero in different markets at the rulling price
The Purchasing Power Parity (PPP) Theory is presented by:
J.M.Keynes
E.D.Domar
Adam Smith
Gustav Cassel
At the point where a straight line demand curve meets the quantity axis (x-axis), elasticity of demand is:
Equal to zero
Equal to one
Equal to infinite
More than one
The short run cost curve is U shaped because of:
The operation of increasing cost
The existence of fixed cost
The existence of variable cost
All of the above
If a monopolist is producing under decreasing cost conditions, increase in demand is beneficial to the society because:
Consumers get better quality goods
Cost of production falls and hence price will follow
Goods will be sold in many markets
None of the above
The vertical demand curve for a commodity shows that its demand is:
Highly elastic
Perfectly inelastic
Fairly elastic
Moderately elastic
The maximization of output subject to cost requires equilibrium at the:
Lowest isoquant
Lowest isocost line
Highest isoquant
Highest isocost line
By increasing the price of its products above those of its competitors, a perfectly competitive seller:
Can sell more
Reduces its revenues
Can sell nothing
Increases its revenues
The slope of an iso-quant represents:
MRS
MRT
MRTS
MRPS
Which describes a competitive market?
Many buyers and many sellers
One seller, many buyers
One buyer, many sellers
Few sellers, many buyers
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
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
In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
In cournot model, at equuilibrium when MC = MR, the elasticity of demand is:
equal to one
zero
negative
equal to 2
The Input-Output Analysis was originated by:
W.W. Leontief
E.D.Domar
R.G.D.Allen
J.M.Keynes
Elasticity (E) expressed by the term, 8 >E>1, is:
Perfectly elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unitary elastic
Relatively inelasticity (less than one elasticity)
Moving along an indifference curve leaves the consumer:
Better off
Worse off
Neither better nor worse off
None of the above
Under perfect competition, at equilibrium, marginal cost is:
Less than marginal revenue
Equal to marginal revenue
More than marginal revenue
None of the above