Which of the following is not an explicit cost of production?
Wage of self-employed proprietor
Depreciation on machinery
Returns on owned capital
Cost of raw materials
Correct Answer :
D. Cost of raw materials
The option a, b and c are implicit costs because these are the costs on the resources owned by the firm. Optiond is the right answer because cost of raw material is explicit cost as it involves money payment.)
Related Questions
If cross-elasticity of one commodity for another turns out to be zero, it means they are:
Close substitutes
Good complements
Completely unrelated (independent goods)
None of the above
Monopoly means:
Where there is no retail trade and every thing is sold on wholesale basis
Where trading of a particular commodity is controlled exclusively by one firm
Where many people sell only one commodity
A form of business organization in which only single proprietorship exists
Diminishing returns occur when a firm:
Starts incurring losses
Uses more and more of one input while holding all other inputs constant
Does not utilize its inputs efficiently
Cuts down on the quantity of all inputs it uses
When was Adam Smiths major work An Enquiry into the Nature and Causes of Wealth of Nations published?
1756
1777
1776
1801
The equilibrium conditions, MC = MR = AR = AC, will happen:
In the short-run under perfect competition
In the long-run under perfect competition
In the short-run under monopolistic competition
In the long-run under monopolistic competition
An optimum level of a firms output is:
Where marginal cost is minimum
Where average cost is minimum
Where both the marginal and the average cost curves are at their respective minimum
Where the firm earns the maximum profits
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
The market demand for any commodity is the:
Average requirement for it in any given place
Amount of it wanted at any given price
Amount that people would like to buy during a period at different prices
Quantity needed to maintain a given standard of living
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
If both demand and supply were to increase then:
Quantity exchanged would fall and price would rise
Quantity exchanged and price would both fall
Quantity exchanged would rise and price might rise or fall
Quantity exchanged and price would both rise
In case of monopoly, the slope of MR is:
Always three times than the slope of AR
Always double than the slope of AR
Always equal to the slope of AR
None of the above
The fundamental choices that a society must make about the use of its resources include:
How much to produce
How to produce
How to distribute
All of the above
Price discrimination is possible:
Only under monopoly situation
Under any market form
Only under monopolistic competition
Only under perfect competition
The main contribution of Prof.Robbins is in the field of:
human welfare
national income
multiplicity of wants and scarcity of resources
theory of production
If the commodity is inferior then:
Income effect is positive but substitution effect is negative
Income effect is negative but substitution effect is positive
Both income effect and substitution effect are negative
Both income effect and substitution effect are positive
The marshallian indirect utility function in the form of equation is:
x =a-bp
x =b-ap
x = f(P)
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
In case of monopoly, the price charged against the additional unit is:
Not different
Same
Not same
Zero
The demand curve in monopolistic competition (also in kinked demand curve model), which shows the share of a firm in market is called:
Relative demand curve
Proportional demand curve
Productive demand curve
Differential demand curve
For the given production function, technical efficiency is defined as:
Sets of points relating production function that maximizes output given input (labor) i.e. Q = f(L, K)
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)
Use of imported technology
None of the above
Marginal cost is the cost:
Of the last unit of production
Of marginal unit
Of marginal efficient units
Of the average units of production
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
In which case the elasticity shown by the different points of a curve is the same?
A straight line curve
A downward sloping demand curve
A rectangular hyperbola demand curve
None of the above
In monopolistic competition, the firms follow:
Exotic behavior
Sympathetic behavior
Myopia behavior
Regular behavior
Change in demand refers to:
Movement on the same demand curve
Upward shift of the demand curve
Downward shift of the demand curve
Upward or downward shift of the demand curve
Other things remaining the same, when a consumers income increases his equilibrium point moves to:
A lower indifference curve
A lower PPC curve
Remains on same indifference curve
A higher indifference curve
Extension (expansion) and contraction of demand are result of:
Change in consumers income
Change in consumers tastes
Change in price
None of the above
The Modern and Neo-Keynsian Theory of Interestwas presented by:
Gunner Myrdal
A.C.Pigou
J.M.Keynes
J.R.Hicks
Excess capacity is concerned with the:
V-shaped traditional cost curves
S-shaped traditional cost curves
Modern cost curves
U-shaped traditional cost curves
The Law of Proportionality is another name of:
The law of diminishing marginal utility
The law of demand
The Law of Diminishing Returns
The law of supply