The factors of production in perfect competition are:
Stagnant
Mobile
Immobile
Rare
Correct Answer :
B. Mobile
One of the assumptions for perfect competition is that factors of production are mobile. Factor mobility refers to the ability to move factors of production-labor, capital or land from one production process into another. Factor mobility also means the movement of factors between different firms. For example when a worker leaves employment at a textile firm and begins work at a automobile factory.}
Related Questions
Production indifference curve (isoquant) is a curve which shows:
Equal level of output
Unequal level of outputs
Equal level of inputs
Unequal level of inputs
When sales tax is imposed on monopolist, its:
Output is effected
Equilibrium is effected
Input is effected
Reputation is effected
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
Increase in demand occurs when:
The price falls and the demand also falls down
The price increases but demand falls down
The price increases the demand remains constant and when the price remains constant the demand goes up
The price remains constant but demand falls
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 giffen paradox is an exception to law of:
Supply
Demand
Production
Consumption
Which of the following is not an explicit cost of production?
Wage of self-employed proprietor
Depreciation on machinery
Returns on owned capital
Cost of raw materials
In a perfectly competitive market, suppliers must know:
The incomes of consumers
The price of the good
What other commodities households could substitute for the good
Consumers expectations of the future
In the short-run, in which one of the following situations would a competitive seller close down (shut-down)?
When he cannot produce at an economic profit
When price falls short of average variable cost at every level of output
When price falls short of average fixed cost at every level of output
When price falls short of average total cost at every level of output
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
Under the law of variable proportions, the average and the marginal product of the variable factor would ultimately:
Become equal
Decrease
Become constant
Increase
Conditions of perfect competition ensure:
That each firm can influence the price
No single firm can influence the price
Any single firm can influence the supply condition in the market
Any single firm can influence both supply and price in the market
A monopolist:
Can not influence the market
Can influence the market
Is a price taker
None of the above
In monopolistic competition, the real differentiation in products is due to difference in:
Style
Consumer
Cost
Material
4.The Law of Diminishing Returns according to the modern view, applies to:
Agriculture
All fields of production
Industry
Services
In short run, a firm can change its:
Total production
Fixed production
Variable production
None of the above
In economic term water is a:
Free good
Economic good
Both of the above
None of the above
Production function relates:
Cost to input
Wages to profits
Cost to output
Inputs to output
In perfectly competitive markets, the profit maximization rule can be represented by:
MR=ATC
P=ATC
P=MC
P=AC
Loanable funds theory of Interest was developed by:
Wicksell
Robert San
Ruskin
J.B.Say
In an indifference curve diagram, when the price of a product increases, the decline in quantity demanded that results if consumers utility or welfare is kept constant is referred to as the:
Utility effect
Budget line effect
Substitution effect
Income effect
The indirect utility function is a homogeneous function of:
degree one
degree zero
degree less than one
degree greater than one
An effective price ceiling usually results in:
Excess demand
Qd > Qs
Shortage of supply
All of the above
In Revealed Preference Theory, Samuelson proves P.E = S.E + I.E :
With using indifference curves
With using MRS
Without using indifference curve
None of the above
Which cost increases continuously with the increase in production?
Average cost
Marginal cost
Fixed cost
Variable cost
In second degree price discrimination, monopolist takes away :
All of the consumer surplus
All of the producer surplus
Some part of the consumer surplus
None of them
Cross-elasticity of demand or cross-price elasticity between two independent goods will be:
Negative
Positive
Infinite
Zero
An economic model describing the working of an economy consists of:
Functional relationships
Family relationships
Economic position
Stagnant relationships
An indifference curve shows the bundles of two goods among which a consumer remains:
Indifferent
Different
In equilibrium
Dominant
The slope of budget line shows the price ratios of:
Many goods
Few goods
Two goods
Three goods