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
Correct Answer :
A. Cost of raw materials
Related Questions
Which is the first-order condition for the profit of a firm to be maximum?
AC=MR
MC=MR
MR=AR
AC=AR
Utility is:
A subjective concept
An ethical concept
An objective concept
A historical concept
The long-run AC curve is constructed from:
The minimum points on all short-run AC curves
The lowest points on the short-run MC curve
The minimum points on the short run AVC curves
It has nothing to do with the short-run cost curves
A loss bearing firm will continue to produce in the short run so long as the price at least covers:
Average variable cost
Average fixed cost
Average variable cost + average fixed cost
Marginal costs
Extension (expansion) of demand means:
More quantity demanded at a lower price
More quantity demanded at a higher price
More quantity demanded at the same price
None of the above
The Tit for Tat strategy means cooperation by the 2nd firm if:
1st firm does not cooperate
1st firm cooperates
1st firm collapses
None of the above
The real income of a consumer is income in terms of:
Goods
Goods and survices
Goods and survices it can purchased
Monetary units
If the prices of goods rise then:
The real income of consumer falls
The real income of consumer rises
The real income of a consumer remains constant
The real income of consumer becomes zero
If price exceeds AVC but in smaller than AC at the best level of output, the firm is:
Making a profit
Incurring a loss but should continue to produce in the short-run
Incurring a loss and should stop producing immediately
Making a normal profit
If the price of product increases and in the result the demand for product B also increases then:
A and B are substitute goods
A and B are complementary goods
A is inferior to B
A is superior to B
The vertical distance between TVC and TC is equal to:
MC
AVC
TFC
AC
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
In long run, a firm can change:
Fixed factors
Variable factors
Both of them
None of them
The coefficient of the price elasticity of demand is computed as the absolute value of the percentage change in quantity demanded divided by:
The change in price
The change in supply
The percentage change in supply
The percentage change in price
The short-run supply curve of the perfectly competitive firm is given by:
The rising portion of its MR over and above the break-even (shut-down) point
The rising portion of its MC over and above the break-even (shut-down) point
The rising portion of its MC over and above the AC curve
The rising portion of its MC curve
The isoquant approach is:
Classical approach
Keynesian approach
Neo-classical approach
Modern approach
The standard form of demand function is:
Q = a- bP
Y = a- bP
Q = a+ bP
Nash equilibrium is applicable in case of:
Cournot model
Edgeworth model
Chamberline model
Sweezy model
Used cars are sold in:
Perfectly competitive international market
Perfectly competitive national market
Imperfect international market
Imperfect local market
Diseconomies of management lead to:
Decreasing returns to scale
Constant returns to scale
Increasing returns to scale
maximum returns to scale
Technological efficiency:
Is the same as economic efficiency
Is achieved when the output produced is maximum for the given level of inputs
Means that there is only one way to produce a given quantity of output
None of the above
The long run average cost curve is the envelope of:
SACs
LACs
SMCs
LMCs
Microeconomics deals with the:
Allocation of resources of the economy as between production of different goods and services
Determination of prices of goods and services
Behavior of industrial decision makers
All of the above
When the law of demand operates the demand curve:
Slopes downward
Slopes upward
Becomes horizontal
Becomes vertical
The good will highest income elasticity is:
Beef
Mutton
Bread
Motion-picture tickets
In repeated game, the Prisoners Dillemma can have a:
Non-cooperative outcome
Cooperative outcome
Dominant behavior
Recessive behavior
In 1932, The nature and significance of economic science was written by:
Prof. Adam Smith
Prof. Alfred Marshal
Prof. Robbins
J.S.Mill
If a monopolist is producing under decreasing cost conditions, increase in demand is beneficial to the society because:
Consumers get better quality goods
Cost of production falls and hence price will follow
Goods will be sold in many markets
None of the above
In cournot model firms:
Cannot make price adjustments
Can make price adjustments
Can adjust number of customers
None of the above
The study of economic theory for the sake of certain objective is called:
Positive Economics
Normative Economics
Micro Economics
Development Economics