The consumer is in equilibrium at the where:
Budget line and indifference curve intersect each other
Budget line and indifference curve are tangent to each other
Budget line and indifference curve are opposite to each other
Budget line and indifference curve are parallel to each other
Correct Answer :
B. Budget line and indifference curve are tangent to each other
Related Questions
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
Price-taker firms:
Advertise to increase the demand for their product
Do not advertise, because most advertising is wasteful
Do not advertise because they can sell as much as they want at the current price
Who advertise will get more profits than those who do not
Suppose income increases by 10% and demand for commodity increases by 5% then the income elasticity of demand is:
Negative
Positive
Zero
Infinity
Formulation of an economic theory involves:
Statements of various assumptions or postulates
Logical deductions from the assumptions made
Testing the hypothesis against empirical evidence
All of the above
The study of economics just in theoretical way is called:
Positive Economics
Normative Economics
Micro Economics
Development Economics
In short run, a firm would remain in business as long as which one of the following of cost is covered?
Total costs
Fixed costs
Variable costs
Constant costs
The games which played by players again and again are called:
Repeated games
Cooperative games
Non-cooperative games
Constant games
Each firm in cournot model assumes that its competitor will:
change its output
not change its output
change its price
not change its price
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
In modern theory, LAC = LMC after the attainment of:
Maximum optimal scale
Average optimal scale
Minimum optimal scale
None of the above
If the demand curve is inelastic then:
It may be nearly vertical
Quantity demanded is very sensitive to income
Demand is hardly affected by income
Close substitutes for the good are abundant
The situation of single buyer and single seller is called:
Monopoly
Multi-plant monopolist
Bilateral monopoly
Price discrimination
Which of the following formulae explain the term average revenue?
Total units /No. of Revenues
Total Revenue/No. of Units
Marginal Revenue × Units
Total Units/ Price
If there are many firms producing similar but differentiated products, the competition is generally said to be:
Oligopoly
Pure competition
Perfect competition
Monopolistic competition
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
Under monopolistic competition, in long-run there is:
Ban on exit
Ban on entry
Free entry
Free entry and exit
The slope of marshallian demand curve is:
Upward
Vertical
Downward
Horizontal
The Law of Diminishing Marginal Returns can be explained in terms of:
Economies and diseconomies of production
Indivisibility of factors
Fixity of supply of land
Variable factor productivity
Law of variable proportions is based on the assumption of:
Short period of time
Long period of time
Timeless production relationship
All of the above
The isoquant which are generated by CES (constant elasticity of substitution) production function are always:
Positively sloped
Negatively sloped
Concave to the origin
None of the above
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
An economic theory is :
An axiom
A proposition
A hypothesis
A tested hypothesis
The point on which the average cost is minimum in a firm, short run average cost curve will also be the minimum cost point on the firms long-run average cost curve. This is true:
Always
Never
When LAC is falling
Only at that level of output when LAC is at its minimum
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
In Prisoner Dilemma, the best choice of strategy is:
Stable
Unstable
Negative
Neutral
If a straight line supply curve passes through the point of origin O, the elasticity of supply is:
Zero
Infinity
Unity
More than unity
The Cambridge School of Thought refers to the group of English economists who came under the influence of:
Alfred Marshal
J.M.Keynes
Paul A.Samuelson
A.C.Pigou
In short run, a firm can change its:
Total production
Fixed production
Variable production
None of the above
The slope of an iso-quant represents:
MRS
MRT
MRTS
MRPS
The engineering production function and engineering costs curves are concerned with the:
Production cost
Collection cost
Raw material costs
Distribution costs