We get constant returns to scale when:
a = ½
� = ½
Both of them
None of them
Correct Answer :
C. Both of them
Related Questions
Plumbing and pipe-fitting require many of the same skills. If the wage paid to pipe-fitters increased then the effect on the market for plumbers would probably be:
An increase in demand
A decrease in demand
An increase in supply
A decrease in supply
Who is the author of Choice of Technique?
K.N.Raj
Amartiya Sen
A.C.Pigou
Alfred Marshal
According to M.Kalecki, the true measure of the degree of monopoly power is the:
Ratio between price and marginal cost
Extent of monopolistic profit enjoyed by him
Cross-elasticity of demand for the product of the monopolist
Price charged by the monopolist minus marginal cost of production
A high value of cross-elasticity indicates that the two commodities are:
Very good substitutes
Poor substitutes
Good complements
Poor complements
Each firm in cournot model assumes that its competitor will:
change its output
not change its output
change its price
not change its price
To attain maximum profits during short-run a firm should produce the output that will:
Yield maximum total revenue
Minimize marginal cost
Maximize marginal cost
Equate marginal revenue with marginal cost
The relationship between MC and MP shown by the marginal cost concept is:
Inverse
Direct
Negative
Positive
Total profits are maximized at the point where:
TR equals TC
The TR curve and the TC curve intersect such that TR and TC lie at the same point
The TR curve and the TC curve are parallel and TC exceeds TR
The TR curve and the TC curve are parallel and TR exceeds TC
Quantity demanded or supplied is measured in:
Monetary units
Physical units
Relative units
Constant units
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
Even in the long-run equilibrium, the pure monopolist can make abnormal profits because of:
Advertising
His low LAC
Blocked entry
High price he charges
To calculate the Economic Profit we must deduct which of the following cost from our total revenues?
Opportunity cost
Direct cost
Rent cost
Wage cost
At the point where a straight line demand curve meets the quantity axis (x-axis), elasticity of demand is:
Equal to zero
Equal to one
Equal to infinite
More than one
A price is a ratio of exchange between:
Money and exchange
Quantity and production
Production and consumption
Money and quantity
Two policy variables, product and selling activities in the theory of firm was introduced by:
Chamberline
Sraffa
Carl marx
Robinson
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
The production function can convey to a firm:
The cost of producing any given output
The various combinations of input that could be employed in production of any given quantity of output
The various combinations of input that should be used in producing any given quantity of output in an efficient manner
The maximum profit level of output
The consumer is in equilibrium at the where:
Budget line and indifference curve intersect each other
Budget line and indifference curve are tangent to each other
Budget line and indifference curve are opposite to each other
Budget line and indifference curve are parallel to each other
The shape of the TC curve is:
U
V
P
S(inverted)
Micro economics is concerned with:
Product markets
Factor markets
Supply and demand
a, b and c
In monopolistic competition, the firm compete on the basis of:
Price
Entry
Both a and b
None of the above
In monopoly, when average revenue curve falls:
MR constant
MR rises
MR falls
MR is zero
In monopolistic competition, the individual demand curve is also known as:
Planned products curve
Planned material curve
Planned costs curve
Planned sales curve
For monopolistic competitive firm:
P=AR and P>MR
P
P=MC and MC=AC
None of the above
The costs faced by the firm against variable factors are:
Variable costs
Fixed costs
Average costs
Marginal costs
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
Indifference curve approach (ordinal approach) is superior to utility approach (cardinal approach) because:
In ordinal approach we can separate the income effect from the substitution effect of a price change
In ordinal approach we can study the consumer behavior more closely
In ordinal approach the consumer is assumed more rational
In ordinal approach the consumer has more income
Each firm in cournot model starts selling:
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
In dominant price leadership model, the small firms are like:
monopolistic firms
monopoly
competitive firms
none of the above
If two goods are perfect substitutes then IC will be:
Concave to the origin
Convex to the origin
Positively sloped
Negatively sloped