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4

Which cost increases continuously with the increase in production?

A. Average cost

B. Marginal cost

C. Fixed cost

D. Variable cost

Correct Answer :

D. Variable cost


Related Questions

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4

The minimization of costs subject to output requires equilibrium at the lowest:

A. Isoquant line

B. Isocost line

C. Indifference curve

D. Price line

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4

MC is given by:

A. The slope of the TVC curve

B. The slope of the TVC curve but not the slope of the TC curve

C. The slope of the TC curve but not by the slope of the TVC curve

D. Either the slope of the TVC curve or the slope of the TC curve

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4

In case of straight-line isoquant, the factors are not substituted because they are each others:

A. Imperfect substitutes

B. Perfect substitutes

C. Complements

D. None of the above

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4

In the theory of firm, Chamberline presented the idea of:

A. Rising cost

B. Falling cost

C. Rising input

D. Falling input

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4

At final equilibrium in cournot model, each firm sells:

A. 1/2 of the total market demand

B. 1/4 of the total market demand

C. 1/3 of the total market demand

D. None of the above

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4

If the price of product A decreases and in the result the demand for product B increases then we can say that:

A. A and B are substitute goods

B. A and B are complementary goods

C. A is an inferior good

D. B is an inferior good

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4

Equilibrium of a firm represents maximization of profits as well as:

A. Maximization of losses

B. Minimization of losses

C. Minimization of profits

D. None of the above

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4

The coefficient of the price elasticity of demand is computed as the absolute value of the percentage change in quantity demanded divided by:

A. The change in price

B. The change in supply

C. The percentage change in supply

D. The percentage change in price

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4

In Revealed Preference Theory, Samuelson proves P.E = S.E + I.E :

A. With using indifference curves

B. With using MRS

C. Without using indifference curve

D. None of the above

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4

In cournot model, firms make decisions separately regarding:

A. output

B. input

C. price

D. advertisement

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4

A market-clearing price:

A. Is a disequilibrium price

B. Is an equilibrium price

C. Means a shortage exists as a market is cleared

D. Must be set by the government

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4

The cobweb model will convergent when the slope of:

A. Demand curve is more than supply curve

B. Supply curve is more than demand curve

C. Supply curve is equal to demand curve

D. None of the above

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4

With the expansion of output, the short run average cost curve, beyond a point, starts rising because:

A. Average fixed cost increases sharply

B. More production yields lower per unit price

C. The law of variable proportions applies to short run production

D. Sales expenses become much larger

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4

In perfectly competitive markets, the profit maximization rule can be represented by:

A. MR=ATC

B. P=ATC

C. P=MC

D. P=AC

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4

In the long-run competitive equilibrium:

A. There is tendency for firms to enter but not leave the industry

B. Firms have no tendency either to enter or to leave the industry

C. Some firms may enter while the others may leave the market even after the equilibrium of the industry

D. Entry or exit of the firms cannot be predicted

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4

In Edgeworth model, prices oscillate between:

A. Firms and industry price

B. Monopoly and duopoly price

C. Competitive and monopoly price

D. None of the above

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4

In Recardian theory of value, the stress has been made on:

A. Marginal cost

B. Production cost

C. Labor cost

D. Supply cost

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4

For the given production function, technical inefficiency is defined as:

A. Sets of points relating production function that maximizes output given input (labor) i.e. Q = f(L, K)

B. Sets of points relating production function that produces less output than possible for a given set of input (labor) i.e. Q < f(L, K)

C. Use of imported technology

D. None of the above

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4

Which one of the following has been the most influential work of F.H.Knight?

A. Freedom and Reform

B. The Green Revolution

C. Economic Integration

D. Risk ,Uncertainty and Profit

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4

If less is demanded at the same price or same quantity demanded at a lower price, it is a case of:

A. Contraction of demand

B. Decrease in demand

C. Increase in demand

D. Extension of demand

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4

The indirect utility function is a homogeneous function of:

A. degree one

B. degree zero

C. degree less than one

D. degree greater than one

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4

The products, under monopolistic competition are differentiated, yet they are:

A. Complements

B. Close substitutes

C. Both a and b

D. None of the above

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4

In substitution effect and income effect:

A. The substitution effect is more certain

B. The income effect is more certain

C. The substitution effect is uncertain

D. The income effect is always positive

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4

In case of perfect competition, TR curve rises at a:

A. Constant rate

B. Decreasing rate

C. Increasing rate

D. None of the above

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4

Microeconomics deals with the:

A. Allocation of resources of the economy as between production of different goods and services

B. Determination of prices of goods and services

C. Behavior of industrial decision makers

D. All of the above

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4

Even in the long-run equilibrium, the pure monopolist can make abnormal profits because of:

A. Advertising

B. His low LAC

C. Blocked entry

D. High price he charges

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4

The supply curve for the short-run competitive firm is the same as:

A. Marginal cost curve

B. Average variable cost curve

C. That part of the marginal cost curve which equals or is greater than AVC

D. Average total cost curve

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4

The cobweb model will divergent when the slope of:

A. Demand curve is more than supply curve

B. Supply curve is more than demand curve

C. Supply curve is equal to demand curve

D. None of the above

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4

One common definition of a luxury good is a good with income elasticity:

A. Greater than one

B. Equal to one

C. Less than one but more than zero

D. None of the above

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4

The equilibrium level of output for the pure monopolist is where:

A. MR = MC

B. MR > MC

C. MR < MC

D. P < AC