When the output of a firm is increasing, its average fixed cost:
Declines continuously
Remains constant
Rises continuously
Declines and then rises
Correct Answer :
A. Declines continuously
Related Questions
The Prisoners Dilemma was presented by A.W.Tucker in:
1910
1945
1900
1940
If the supply and demand increases equally, the price will:
Rise
Fall
Remain unchanged
Change depending on respective elasticities
The basic and essential economic problems in a community are related to choice and:
Freedom
Scarcity
Social class
Politics
Who finalized the model of imperfect competition?
Ricardo
Marshal
Chamberlin
Mrs. Robinson
A demand curve which is horizontal and parallel to x-axis represents:
Infinitely elastic demand
Infinitely inelastic demand
Relatively elastic demand
Relatively inelastic demand
In the long-run competitive equilibrium, the theory predicts that:
TC = TR and MC = MR
Firms operate at a minimum average total cost
There is no incentive for entry or exit of firms
All these conditions exist
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
If the supply curve is not a straight line but curvilinear, the elasticity on all points of the supply curve is:
Equal
Different
Zero
Infinity
Average cost means:
Cost of the average units
Cost of the last units of average
Cost of the unit of production
Total cost marginal cost
In Edgeworth model, price remains:
Constant
On increasing
Independent
Indeterminate
All the firms with identical costs under perfect competition well, in the long-run, earn only:
Normal profits
Abnormal profits
Differential profits
No profits
With elasticity of demand, the:
Negative sign is ignored
Positive sign is ignored
None of them
Both of them
The CES production function shows:
Decreasing return to scale
Increasing return to scale
Constant return to scale
None 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
Income effect operates through an increase
In nominal income
In money income
In wages
In real income because of the fall of price of a commodity
Diseconomies of management lead to:
Decreasing returns to scale
Constant returns to scale
Increasing returns to scale
maximum returns to scale
Any straight line supply which cuts the x-axis will have:
Zero elasticity
An elasticity greater than one
Unitary elasticity of supply
An elasticity less than one
A budget line shows:
Price of commodity X in terms of Y
Price of commodity Y in term of X
Income of the consumer
All of the above
In case of perfect competition, TR curve rises at a:
Constant rate
Decreasing rate
Increasing rate
None of the above
Two policy variables, product and selling activities in the theory of firm was introduced by:
Chamberline
Sraffa
Carl marx
Robinson
Which of the following is assumed to be constant when drawing a demand curve?
Consumer tastes
Prices of inputs
Technology
Number of sellers
Which of the following has more elastic demand curve?
A commodity without substitutes
A commodity with substitutes
A commodity on which a small fraction of income is spent
A commodity the use of which cannot be postponed
The good will highest income elasticity is:
Beef
Mutton
Bread
Motion-picture tickets
If two goods have same marginal utility for a consumer then:
He will consume only one of them
He will consume equal quantities of them
He will be willing to pay the same price for each of them
The total utility gained from each of them is equal
When the consumer is in equilibrium not only his income is fully spent, but the ratio of marginal utility and price is:
Increased
Equalized
Prominent
Zero
In the short-run, the competitive firm can maximize its profits (or minimize its losses) by:
Equating price and marginal revenue
Equating price and average total cost
Increasing marginal cost and lowering fixed costs
Equating marginal cost and marginal revenue
When in a market, the number of buyers is very large and the number of sellers is very small, it is known as:
Monopoly
Oligopoly
Imperfect competition
Perfect competition
In monopolistic competition, the real differentiation in products is due to difference in:
Style
Consumer
Cost
Material
Which of the following goods is most likely to be exchanged in a market of local rather than national scope?
University professors
Computer components
Building materials
Jet airplanes
Who wrote Mathematical Analysis for Economists?
J.P.Lewis
R.G.D.Allen
Paul A.Samuelson
E.D.Domar