Using total revenue and total cost, a profit maximizing firm will be equilibrium at a point:
Where the gap between the two is the smallest
Where the gap between the two is the greatest
Where the two become equal
None of the above
Correct Answer :
B. Where the gap between the two is the greatest
Related Questions
Price elasticity of demand is best defines as:
Change in the tastes of consumers at different prices
The rate of response of demand to a change in supply
The change in costs when output is increased by one unit
The responsiveness of demand to a change in price
The giffen paradox is an exception to law of:
Supply
Demand
Production
Consumption
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
A market demand schedule is obtained by adding individual demand schedules:
Horizontally
Vertically
Permanently
Perpetually
In joint-profit maximization cartel, central agency sets the:
Output
Input
Demand
Price
In monopoly and perfect competition, TC curves are:
Different
Similar
Opposite
None of the above
Technological Progress (Invention) can be defined as:
Technological progress shifts the production function by allowing the firm to achieve more output from a given combination of inputs (or the same output with fewer inputs)
Technological progress shifts the production function by allowing the firm to achieve less output from a given combination of inputs (or the same output with more inputs)
Technological progress shifts the import function to the right
None of the above
Under monopolistic competition, the products sold by the firms are:
Economic substitutes
Technical substitutes
Both a and b
None of the above
The proportionality rule in production requires that the ratios of MP and factor prices are:
Doubled
Equalized
Not equalized
None of the above
If the production increases under decreasing returns to scale, the cost will:
Increase at decreasing rate
Increase at constant rate
Decrease at increasing rate
Increase at increasing rate
For monopolistic competitive firm:
P=AR and P>MR
P
P=MC and MC=AC
None of the above
The amount of income left over for a consumer in equilibrium is :
Consumer surplus
Zero
Two rupees
Excess demand
The substitution effect works to encourage a consumer to purchase more of a product when the price of that good is falling because:
The consumers real income has increased
The consumers real income has decreased
The product is now relatively less expensive than before
Other products are now less expensive than before
Which industries spend a relatively large share of their revenue on research and development in order to keep up with their competitors?
Grocery stores
High-Tech industries
Automobiles
Construction
According to marginalistic rule, the profit maximization hypothesis requires:
MC
MC>MR
MC=AP
MC=MR
A monopolist is:
Price winner
Price searcher
Price taker
Price leaver
The marginal revenues are derivatives of:
TR function
AR function
MR function
AP function
The spending of money by the producer to influence consumers is an example of:
Derived demand
Joint demand
Demand creation
Compressed demand
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
Moving along the indifference curve leaves the consumer:
Better off
Worse off
In equilibrium
Neither better off nor Worse off
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
If the commodity is normal then Income Effect (I.E) is:
Negative
Positive
Zero
Infinite
Human wants are:
Thousands
Few
Innumerable
Hundreds
The central problem of economics is:
Declining productivity
Increasing consumption
Limited material wants
Limited resources and unlimited wants
According to Diamond Water Paradox diamonds are more expensive than water because:
They yield higher total utility
They yield higher marginal utility
They are more useful
None of the above
In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
MC curve is:
L-shaped
U-shaped
V-shaped
Both a and b depending on situation
Who formulated the Post-Keynsian Theory of Distribution and Growth?
J.M.Keynes
N.Kaldor
C.P.Kindleberger
Irving Fisher
Normally when price per unit of time falls:
Quantity demanded increases
Quantity demanded decreases
Quantity demanded remains constant
Quantity demanded becomes zero
If the price of product A decreases and in the result the demand for product B increases then we can say that:
A and B are substitute goods
A and B are complementary goods
A is an inferior good
B is an inferior good