The short run cost curve is U shaped because of:
The operation of increasing cost
The existence of fixed cost
The existence of variable cost
All of the above
Correct Answer :
C. The existence of variable cost
Related Questions
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
A monopolist is able to maximize his profit when:
His output is maximum
He charges a high price
His average cost is minimum
His marginal revenue is equal to marginal cost
Which of the following pairs of commodities is an example of substitutes?
Tea and sugar
Tea and coffee
Pen and ink
Shirt and trousers
The firm in cournot model:
face costs
face taxes
donot face taxes
donot face costs
Supply of commodity is a:
A stock concept
A flow concept
Both stock and flow
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
Isocost line shows the combinations of labor and capital where a firms budget is:
Fully spent
Half spent
Partially spent
Nearly spent
In the range of excess capacity, the average costs are:
Maximum
Minimum
Equal to one
Equal to zero
Total utility:
Diminishes with increased consumption
Reflects the overall level of satisfaction of the consumer
Is directly related to the price the consumer is willing to pay for a good or service
Is independent of price changes
A monopolist has control over the price he charges for his product. He will be able to maximize his profit by:
Lowering the price, if the demand curve is elastic
Lowering the price, if the demand curve is inelastic
Rising the price, if the demand curve is elastic
None of the above is applicable
Who wrote A Contribution to the Theory of Trade Cycle?
N.Kaldor
J.R.Hicks
A.C.Pigou
J.M.Keynes
An iso-product (an isoquant) curve slopes:
Downward to the left
Downward to the right
Upward to the right
Upward to the left
If the commodity is inferior then the increase in income of the consumer results in:
More purchase
Less purchase
Same purchase
None of the above
The difference between average total cost and average fixed cost shows:
Normal profits
Implicit costs
Variable costs
Opportunity costs
The average cost curve is a geometrical illustration of:
Hydraulic function
Cubic function
Pentagonic function
Quadratic function
The demand curve of giffen goods will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
Economic laws are:
Conditional
Moral by nature
Predicted
Like laws of sports
When a consumer is in equilibrium then slope of indifference curve is:
Equal to the slope of budget line
Greater than the slope of budget line
Smaller than the slope of budget line
Parallel to the slope of budget line
If the commodity is normal then price effect is:
Negative
Inverse
Positive
Both (a) and(b)
At final equilibrium in cournot model, each firm sells:
1/2 of the total market demand
1/4 of the total market demand
1/3 of the total market demand
None of the above
Price elasticity of demand can be measured in the following way:
Percentage change in quantity demanded of a commodity divided by percentage change in price of that commodity
Change in quantity demanded of a commodity divided by change in price of that commodity
Percentage change in price of a commodity divided by percentage change in quantity demanded of that commodity
None of that commodity
Production is a function of:
Profits
Costs
Inputs
Price
The difference between the average total cost and average variable cost as output increases will:
Increases
Remains the same
Diminishes
Zero
If the increase in demand is more than the increase in supply, the price will:
Rise
Fall
Remain the same
None of the above
At low prices, demand is likely to be:
More elastic
Less elastic
Unit elastic
Perfectly inelastic
An exceptional demand curve is:
Downward sloping
Upward sloping
Horizontal straight line
Vertical straight line
The main contribution of Prof. R.G.D.Allen is in the field of:
fixation of price
Arc elasticity of demand
Cross elasticity of demand
Wage theory
In monopolistic competition, the real differentiation in products is due to difference in:
Style
Consumer
Cost
Material
Which of the following is not a U shaped curve:
Marginal cost curve
Average variable cost curve
Fixed cost curve
Average cost curve
When the level of optimal factor combination is over and more labor is employed with the fixed plant, the efficiency of labor:
Increases
Decreases
Remains constant
Becomes zero