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Quiz 5
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Q.1
The producer's demand for a factor of production is governed by the ____ of the factor.
Price will decrease
Marginal productivity
Availability
Profitability
Q.2
A factor of production, whose supply is fixed in the short run, may get additional earnings. These earnings are generally referred to as
Surplus value
Quasi-rent
Transfer earnings
Super normal profits
Q.3
A factor of production, whose supply is fixed in the short tun, may get additional earnings. These earnings are generally referred to as
Surplus value
Quasi-rent
Transfer earnings
Super normal profits
Q.4
The necessary condition for equilibrium position of a firm is
MR>MC
MC>Price
MC=MR
MC=AC
Q.5
The horizontal demand curve parallel to x-axis implies that the elasticity of demand is
Zero
Infinite
Equal to 1
Greater than zero but less than infinity
Q.6
Which form of market structure is characterised by interdependence in decision-making as between the different competing firms?
Oligopoly
Perfect competition
Imperfect competition
None of the above
Q.7
In monopoly and perfect competition, the cost curves are
Same
Different
Opposite
None of the above
Q.8
If price changes by 1% and supply changes by 2%, then supply is
Elastic
Inelastic
Indeterminate
Static
Q.9
During a particular year, farmers experienced a dry weather. If all the other factors remain constant, farmers supply curve for wheat will shift
Rightward
Leftward
Upward
None of the above
Q.10
The supply of a commodity refers to
Actual production of the commodity
Total existing stock of the commodity
Stock available for sale
Amount of the commodity offered for sale at a particular price per unit of time
Q.11
Economic rent can accrue to
Land only
Capital only
Specialized technical personnel only
Any of the factors of production
Q.12
An indifference curve slopes down towards right since more of one commodity and less of another result in
Same satisfaction
Greater satisfaction
Maximum satisfaction
Decreasing expenditure
Q.13
In the context of oligopoly, the kinked demand curve hypothesis is designed to explain
Price and output determination
Price rigidity
Price leadership
Collusion among rivals
Q.14
Profit is maximum when
TC and TR curves are parallel
MC and MR curves are parallel
TC and TR curves cross each other
AC and AR curves cross each other
Q.15
Normal profit is called normal because
It is neither very high nor very low
It is minimum acceptable to the producer
It is minimum which buyer wants to pay
It is the maximum allowed by government
Q.16
Supply curve is
Vertical in long run
Flatter in long run
Same in long and short run
Horizontal in both short and long run
Q.17
A vertical supply curve parallel to the price axis implies that the elasticity of supply is
Zero
Infinity
Equal to one
Greater than zero but less than infinity
Q.18
Which one is increasing function of price?
Demand
Utility
Supply
Consumption
Q.19
The consumer is in equilibrium at a point where the budget line
Is above an indifference curve
Is below an indifference curve
Is tangent to an indifference curve
Cuts an indifference curve
Q.20
In May 2013, firm was supplying 500kg of sugar at market price of Rs.30/- per kg. During June 2013, firm's supply of sugar had decreased to 450kg at price of Rs.20/- per kg. These changes show that supply of sugar is
Oerfectly elastic
Perfectly inelastic
Less elastic
More elastic
Q.21
An ISO-product slopes
Downward to the left
Downward to the right
Upward to the left
Upward to the right
Q.22
Which of the following is NOT the assumption of the Marginal Productivity Theory of Distribution?
Homogenity of a factor
Perfect competition in the factor market
All factors, except one, are variable
Given stock of each factor and full employment
Q.23
Under perfect competition
AC=AVC
AR=AC
AR=MC
AR=MR
Q.24
When supply of a commodity increases without change in price, it is called
Fall in supply
Expansion in supply
Contraction in supply
Rise in supply
Q.25
Supply curve will shift when
Price falls
Price rises
Demand shots
Technology changes
Q.26
The Revealed Preference Theory deduces the inverse price-quantity relationship from
Assumption of indifference
Postulate of utility maximization
Observed behavior of the consumer
Introspection
Q.27
With which of the theories of wages, is the name of John Stuart Mill associated?
Marginal productivity theory of wages
Wages-fund theory
Subsistence theory of wages
Iron aw of wages
Q.28
If a firm shuts down temporarily, it will incur loss equal to
AFC
AVC
TFC
TVC
Q.29
Which of the following oligopoly models is concerned with the maximization of joint profits?
Price leadership model
Bertrand's model
Collusive model
Edgeworth's model
Q.30
A firm decides to exit the industry when
AC starts rising
MC starts rising
Price is less than LAC
TC starts rising
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