The difference between average cost and average revenue is:
Total profit
Average profit
Net profit
Marginal profit
Correct Answer :
B. Average profit
Related Questions
In Recardian theory of value, the stress has been made on:
Marginal cost
Production cost
Labor cost
Supply cost
At low prices, demand is likely to be:
More elastic
Less elastic
Unit elastic
Perfectly inelastic
Who first formulated the Marginal Productivity Theory of Distribution?
J.B.Clark
L.Euler
J.A.Schumpeter
Alfred Marshal
In case of monopoly, TR curve rises at a:
Constant rate
Decreasing rate
Increasing rate
None of the above
A monopolist:
Can not influence the market
Can influence the market
Is a price taker
None of the above
Slope of a demand curve is:
Not relevant to elasticity
The only factor determining elasticity
Only one of the factors influencing elasticity
None of the above
The total utility (TU) curve is:
Concave to X-axis
Convex to X-axis
Concave to Y-axis
Convex to Y-axis
A dominant strategy can best be described as:
A strategy taken by a dominant firm
A strategy taken by a firm in order to dominate its rivals
A strategy that is optimal for a player no matter an opponent does
A strategy that leaves every player in a game better off
In collusive olligopoly, the firms may make:
Open agreements
Secret agreements
Both a and b
None of the above
Under competitive conditions, the industry will be in equilibrium:
When each firm is in equilibrium equating MC with MR
When all the firms are earning only normal profits
When firms outside have no tendency to enter the industry and those within, have no tendency to leave the industry
All of the above
According to Marshal, the Law of Diminishing Marginal Utility:
Applies on both money and other commodities
Does not apply on money
Does not apply on bank money but applies on cash money
Applies on all the commodities except on money
Equilibrium of a firm represents maximization of profits as well as:
Maximization of losses
Minimization of losses
Minimization of profits
None of the above
The falling part of total Utility (TU) curve shows:
Increasing marginal utility
Decreasing marginal utility
Zero marginal utility
Negative marginal utility
Elasticity of Substitution (s) is defined as:
Percentage change in capital-labor ratio dividing by percentage change in 
Percentage change in dividing by percentage change in capital-labor ratio
Percentage change in inputs dividing by percentage change in outputs
None of the above
In substitution effect, we:
Move to another indifference curve
Move along given indifference curve
Move to a higher indifference curve
Move to a lower indifference curve
The right of individuals to control productive resources is known as:
Monopoly
Private property
Workable competition
Oligopoly
According to marginalistic rule, the profit maximization hypothesis requires:
MC
MC>MR
MC=AP
MC=MR
The Lambda or Langrange Multiplier is a:
Analyst
Catalyst
Pessimist
Optimist
In monopolistic competition, the firm compete on the basis of:
Price
Entry
Both a and b
None of the above
In case the two commodities are complements, cross elasticity will be:
Positive
Unitary
Negative
Infinite
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 indirect utility function is a homogeneous function of:
degree one
degree zero
degree less than one
degree greater than one
If the slope of the isoquant is equal to the slope of isocost, then isoquant is:
Concave to the origin
Convex to the origin
Tangent to the origin
None of the above
AR curve under perfect competition:
Slopes downwards to the right
Slopes upward to the right
Is vertical to the x-axis
Is horizontal to the x-axis
Price is measured in:
Physical units
Monetary units
Constant units
Current units
In case of straight-line isoquant, the factors are not substituted because they are each others:
Imperfect substitutes
Perfect substitutes
Complements
None of the above
Which of the following would be least likely to cause a consumer to eat less beef?
An increase in the price of beef
An increase in the price of lamb
A reduction in the consumers income
A reduction in the price of lamb
Time Preference Theory of Interest was presented by:
Adam Smith
Carl Menger
Ruskin
J.B.Say
Economics is a:
Physical science
Social science
Natural science
Basic science
A good tends to have relatively inelastic demand, if:
Close substitutes are available
It has a high price
It is a luxury
It has no very close substitutes