Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Read the statements and choose the correct answer.
Assertion (A) There exists excess capacity of the production for the firms if these incur losses.
Reason (R) Their production level has to remain below their economic capacity level.
A. (A) is correct, but (R) is incorrect
B. (A) is incorrect, but (R) is correct
C. Both (A) and (R) are correct and (R) is the right explanation of (A)
D. Both (A) and (R) are correct, but (R) is not the right explanation of (A)
Answer: Option C
The capital that is consumed by an economy or a firm in the production process is known as
A. Capital loss
B. Production cost
C. Dead-weight loss
D. Depreciation
Who propounded the opportunity cost theory of international trade?
A. Ricardo
B. Marshall
C. Heckscher & Ohlin
D. Haberler
Which among the following statement is INCORRECT?
A. On a linear demand curve, all the five forms of elasticity can be depicted
B. If two demand curves are linear and intersecting each other, then, coefficient of elasticity would be same on different demand curves at the point of intersection.
C. If two demand curves are linear and parallel to each other, then, at a particular price, the coefficient of elasticity would be different on different demand curves.
D. The price elasticity of demand is expressed in terms of relaive not absolute changes in Price and Quantity demanded.
A. Increase
B. Decrease
C. Remain the same
D. Become zero
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