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
Correct Answer :
B. The firms producing at their minimum costs
Related Questions
Selling costs are incurred under monopolistic competition to:
Attract more customers
Prevent its customers from going to others
Establish superiority of its product on the others
All of the above
Identify the author of The Principles of political Economy and Taxation:
Alfred Marshal
J.S.Mill
David Ricardo
A.C.Pigou
The elliptical isoquant represents the:
Economic combinations of labor and capital
Uneconomic combinations of labor and capital
Both a and b
None of the above
In context of oligopoly, the kinky demand curve (kinked demand curve) hypothesis is designed to explain:
Price and output determination
Price rigidity (price stickness)
Price leadership
Collusion among rivals
The demand curve of giffen goods will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
An indifferent curve shows:
That how many utils are obtained from consuming different bundles of commodities
Different collections of two commodities the consumer considers to be of equal value
That if price increases there will be an increases in demand
None of the above
An indifference curve shows the bundles of two goods among which a consumer remains:
Indifferent
Different
In equilibrium
Dominant
Profits of a firm will be calculated taking into account the units produced and the difference between:
Real cost and money cost
Variable cost and fixed cost
Average cost and average revenue
Marginal cost and average cost
Supply of commodity is a:
A stock concept
A flow concept
Both stock and flow
None of the above
In discriminating monopoly (price discrimination), the cost of production in two markets are:
Different
Same
Zero
None of the above
Indifference curves reflect:
Preferences
Income
Prices
Consumption
The fixed cost of a firm:
Are fixed even in the long period
When expressed as an average, show a continuous decline with increase of output
Do not reflect diminishing marginal returns
None of the above
The budget constraint can be written as:
X.PX + Y.PY = 1
X.PX + Y.PY < 1
X.PX + Y.PY > 1
X.PX + Y.PY = 0
Theory of revealed preference is based on:
Weak orderings
Neutral orderings
Partial orderings
Strong orderings
Who wrote An Introduction to Positive Economics?
R.G.Lipsey
Paul.A.Samuelson
E.D.Domar
J.M.Keynes
An economic model describing the working of an economy consists of:
Functional relationships
Family relationships
Economic position
Stagnant relationships
A market-clearing price:
Is a disequilibrium price
Is an equilibrium price
Means a shortage exists as a market is cleared
Must be set by the government
In perfectly competitive markets, the profit maximization rule can be represented by:
MR=ATC
P=ATC
P=MC
P=AC
The behavior of MC curve is determined by the behavior of the:
AC curve
SC curve
TC curve
None of the above
In monopolistic competition, if a firm lowers its price, the rival firms will:
Also lower their prices
Increase their prices
Show no reaction
None of the above
In case of monopoly:
MR
MR>AR
MR=AR
AR=0
Technological Progress (Invention) can be defined as:
Technological progress shifts the production function by allowing the firm to achieve more output from a given combination of inputs (or the same output with fewer inputs)
Technological progress shifts the production function by allowing the firm to achieve less output from a given combination of inputs (or the same output with more inputs)
Technological progress shifts the import function to the right
None of the above
The amount of income left over for a consumer in equilibrium is :
Consumer surplus
Zero
Two rupees
Excess demand
Price elasticity of demand is best defines as:
Change in the tastes of consumers at different prices
The rate of response of demand to a change in supply
The change in costs when output is increased by one unit
The responsiveness of demand to a change in price
Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?
MC =AC and P
MC = AC and P=MR
P =MC and P
MC=MR and P =AR= ATC
Stable cobweb model is a:
Simple model
Dynamic model
Both of them
None of them
If cross-elasticity of one commodity for another turns out to be zero, it means they are:
Close substitutes
Good complements
Completely unrelated (independent goods)
None of the above
The market demand shedule is determined by:
Adding up the prices consumers are wiling to pay at each quantity demanded
Multiply each consumers demand curve by the total number of consumers in the market
Adding the quantities denmanded by all consumers at each alternative price
None of the above
Under monopolistic competition, in long-run there is:
Ban on exit
Ban on entry
Free entry
Free entry and exit
Which of the following is not characteristic of perfect competition?
Freedom of entry and exit
Each seller is a price taker
Perfect information about prices
Heterogeneous products