91
The prime cost may be considered as
A)
Sunk cost
B)
Direct cost
C)
Variable cost
D)
Fixed cost
Answer & Solution
Answer: Option
D
92
The point on which the average cost is minimum in a firm short-run average cost curve will also be the minimum cost point on the firm's long run average cost curve. This is true
A)
When LAC is falling
B)
Never
C)
Always
D)
Only at that level of output when LAC is at its minimum
Answer & Solution
Answer: Option
D
93
The price of Rs. 20 has a demand of 500 units. If the price falls to Rs. 15 and the quantity demanded increases to 600 units, calculate the arc of elasticity.
A)
1.2
B)
0.63
C)
1.5
D)
1.65
Answer & Solution
Answer: Option
B
94
Professor J. Robinson measured monopoly power in terms of
A)
elasticity
B)
marginal revenue and price
C)
marginal cost and price
D)
price and average cost
Answer & Solution
Answer: Option
A
95
Which of the following statement is correct about inflation?
A)
It always reduces the cost of living
B)
It always reduces the standard of living
C)
It reduces the price of products
D)
It reduces the purchasing power of a rupee
Answer & Solution
Answer: Option
D
96
The difference between monopoly equilibrium and competitive equilibrium is
A)
The MC should rise at the point of equilibrium under perfect competition whereas under monopoly it can rise, fall or remain constant
B)
Under perfect competition, the MC = MR whereas under monopolistic conditions this need not be the case
C)
There is no difference at all
D)
None of the above
Answer & Solution
Answer: Option
A
97
The slope of the Iso-cost line is determined by
A)
Prices of the two factors
B)
Degree of substitutability of two factors
C)
Productivity of the two factors
D)
None of these
Answer & Solution
Answer: Option
A
98
Match the following:
a. Increasing cost industry
1. Horizontal long run supply curve
b. Decreasing cost industry
2. Positively sloped long run supply curve
c. Constant cost industry
3. Negatively sloped long run supply curve
A)
a-3, b-2, c-1
B)
a-1, b-2, c-3
C)
a-2, b-3, c-1
D)
a-2, b-1, c-3
Answer & Solution
Answer: Option
C
99
An increase in a firm's fixed costs will
A)
Change total costs but not marginal costs
B)
Change both marginal and total costs
C)
Change variable costs but not marginal costs
D)
Change marginal costs but not total costs
Answer & Solution
Answer: Option
B
100
Income elasticity of demand will be zero when a given change in income brings about
A)
The same proportionate change in demand
B)
A more than proportionate change in quantity demanded
C)
A less than proportionate change in quantity demanded
D)
No change in demand
Answer & Solution
Answer: Option
D
