The economic problem of determining the combination of inputs yielding lowest cost for producing a given output:
Is only a choice among the technologically efficient combination
Depends on the relative price of inputs
Depends on the price of the product
Depends on the profits made
Correct Answer :
B. Depends on the relative price of inputs
Related Questions
Market allocation fundamentally relies upon:
A system of relative prices
A belief that employees work for the good of society
Government ownership of the means of production
Moral incentives to encourage productive efficiency
Labor Saving Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
The low cost price leader will charge:
higher prices
zero prices
lower prices
specific prices
Engel curves shows that:
How commoditys consumption rate differs at various levels of price
How commoditys consumption rate differs at various levels of satisfaction
How commoditys consumption rate differs at various levels of income
How commoditys consumption rate differs at various levels of taxes
Perfect competition assumes:
All buyers and sellers have perfect knowledge of the market
Freedom of entry of firms into the industry
Homogeneous product
All of the above
Price leadership is associated with:
Collusive oligopoly
Non-collusive oligopoly
Cartel
Perfect competition
The marginal revenues are derivatives of:
TR function
AR function
MR function
AP function
Quantity demanded or supplied is measured in:
Monetary units
Physical units
Relative units
Constant units
For the equilibrium of the firm and the industry in the short period in a competitive market, the condition is:
P = AC
P = MC
AC = MC
MC = TR
A significant property of the Cobb-Douglas production function is that the elasticity of substitution between inputs is:
Greater than one
Less than one
Zero
Equal to one
Substitution effect means a consumer
Shifts away from the commodity the price of which has fallen
Shifts in favour of a commodity the price of which has risen
Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen
None of the above
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
If a consumer buys a product that costs Rs.3 and provides an additional 18 units of satisfaction, then for this purchase:
Total utility will increase by 6 units
The marginal utility per rupee is 6
The consumer will buy more because marginal utility is positive
The consumer obtained an extra54 units
In a socialist (communist) economy the invisible hand:
Guides most resource allocation decisions
Operates effectively only in the labor market
Operates effectively only in the market for capital
Is prevented from operating effectively
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 number of sellers in oligopoly is:
Two
One
Very large
A few
Rational economic behavior on the part of the consumer means that he will:
Save as much of his income as possible
Spend as much of his income as possible
Buy everything at the lowest possible price
Make wise choices among available economic goods
If demand increased and supply decreased then:
Quantity exchanged might rise or fall and price would rise
Quantity exchanged would rise and price would fall
Quantity exchanged would rise and price might rise or fall
Both quantities exchanged and price would rise
If the demand curve is horizontal then its slope is:
Infinite
Zero
Equal to one
None of the above
Which of the following is not a characteristic of a perfectly competitive market?
There is perfect information about prices
All participants in the market are small relative to the size of the overall market
There are many buyers and sellers
Buyers and sellers do not know each other
When sales tax is imposed on monopolist, its:
Output is effected
Equilibrium is effected
Input is effected
Reputation is effected
The demand curve of ostentation goods (Veblen goods) will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
According to the principle of substitution?
Many goods have no effective substitutes
Nearly all goods have substitutes
The prices of substitute goods must be the same
Buyers will stop buying a good if its price rises
General equilibrium is concerned with simultaneous equilibrium of:
Few economic agents
All the economic agents
Two economic agents
Many economic agents
In monopoly:
The producer will often produce a volume that is less than the amount which would maximize the social welfare.
The producer will often produce a volume that is more than the amount which would maximize the social welfare.
The consumers will often consume a volume that is more than the amount which would maximize the social welfare.
None of the above
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
In 1932, The nature and significance of economic science was written by:
Prof. Adam Smith
Prof. Alfred Marshal
Prof. Robbins
J.S.Mill
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
Under price discrimination, the buyers must:
Be similar
Not be similar
Equal
None of the above
Who is the author of the famous work Asian Drama: An Enquiry intro the Causes of Poverty of Nations?
Irving Fisher
J.B.Clark
J.M.Keynes
Gunnar Myrdal