The CES production function shows:
Decreasing return to scale
Increasing return to scale
Constant return to scale
None of the above
Correct Answer :
C. Constant return to scale
CES production function (Constant Elasticity of Substitution Function) is also a form of Cobb-Douglas production function. It is a Cobb-Douglas production function of degree one (n=1).It indicates constant returns to scale. It means if we double the capital (K) and labor(L) , the output will also doubled.}
Related Questions
In case of budget line, we get pairs of two goods where consumers income is:
Fully spent
Half spent
Partially spent
Correctly spent
In monopolistic competition, the firm take advantage due to customers:
Similar choices
Unlimited choices
Differential choices
Few choices
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
In cournot model, during the process of adjustment, the number of firms:
Donot change
Change
Both a and b
None of the above
A firm is a sum of persons who convert:
Goods into services
Output into inputs
Inputs into outputs
None of the above
Who first formulated the Marginal Productivity Theory of Distribution?
J.B.Clark
L.Euler
J.A.Schumpeter
Alfred Marshal
When total revenue is maximum in monopoly, elasticity of demand is:
E =1
E >1
E <1
E =0
All the firms with identical costs under perfect competition well, in the long-run, earn only:
Normal profits
Abnormal profits
Differential profits
No profits
In constant sum game (zero sum game), if there are two parties then:
Both parties make better-off
Both parties make worse-off
Both parties become Neutral
One party can become better off only if another is made worse off
The situation in between the extremes of the govt. controlled, planned economy and the perfectly free, unplanned economy is known as:
Developed economy
Laissez-fair economy
Mixed economy
Capitalistic economy
Consumers Surplus can also be defined as:
Extra price benefits
Shortage of quantity
Surplus of quantity
Difference between actual price and potential price
The main contribution of Alfred Marshal is in the field of:
Research in mathematical economics
Economics of labor
Theory of production
Theory of demand
To attain maximum profits during short-run a firm should produce the output that will:
Yield maximum total revenue
Minimize marginal cost
Maximize marginal cost
Equate marginal revenue with marginal cost
The good will highest income elasticity is:
Beef
Mutton
Bread
Motion-picture tickets
The monopolist often lead to exploitation of:
Producers
Workers
Managers
Consumers
Production is a function of:
Profits
Costs
Inputs
Price
In Edgeworth model, if price falls below competitive price, the demand is:
More than maximum output
More than minimum output
Less than maximum output
Less than minimum output
Identify the factor, which generally keeps the price elasticity of demand for a commodity low:
Variety of uses for that commodity
Its low price
Close substitutes for that commodity
High proportion of the consumers income spent on it
The normal long-run average cost curve is influenced by the:
Principle of diminishing returns
Economies and diseconomies of large scale production
Principle of constant return to scale
All of the above
The shape of the TC curve is:
U
V
P
S(inverted)
The alternative of profit maximization theory is:
Cost maximization
Product maximization
Revenue maximization
None of the above
Isocost line shows the combinations of labor and capital where a firms budget is:
Fully spent
Half spent
Partially spent
Nearly spent
Income effect operates through an increase
In nominal income
In money income
In wages
In real income because of the fall of price of a commodity
The utility function u = f(x) is based upon :
Two goods
Few goods
One good
Zero goods
Income -elasticity of demand will be zero when a given change in income brings about:
A less than proportionate change in quantity demanded
A more than proportionate change in quantity demanded
The same proportionate change in quantity demanded
No change in quantity demanded
If demand is elastic and supply is inelastic then the burden of a tax on the good will be:
Borne mostly by producers
Borne mostly by consumers
Borne mostly by government
Shared equally by producers and consumers
Robbins definition of economics was criticised by:
Alfred Marshal
Adam Smith
J.B.Clark
Hicks, Longe and Durbin
Any expansion in output by a firm in the short period will always reduce the:
Average variable cost
Average fixed cost
Both average fixed and variable cost
None of the above
The study of economic theory for the sake of certain objective is called:
Positive Economics
Normative Economics
Micro Economics
Development Economics
The marshallian demand curve includes:
Substitution Effect
Income Effect
Both substitution and income effect
None of them