Economics - Study Mode

[#516] The second glass of lemonade gives lesser satisfaction to a thirsty biy, this is a clear case of
Correct Answer

(C) Law of diminishing marginal utility

Explanation

Solution: The second glass of lemonade gives lesser satisfaction to a thirsty boy, this is a clear case of Law of diminishing marginal utility. The law of diminishing marginal utility describes a familiar and fundamental tendency of human behavior.

[#517] The kinked demand curve model of oligopoly assumes that
Correct Answer

(A) Response to a price increase is less than the response to a price decrease

Explanation

Solution: The kinked demand curve model of oligopoly assumes that response to a price increase is less than the response to a price decrease. In an oligopolistic market, the kinked demand curve hypothesis states that the firm faces a demand curve with a kink at the prevailing price level. The curve is more elastic above the kink and less elastic below it. This means that the response to a price increase is less than the response to a price decrease.

[#518] Agricultural goods market depicts characteristics close to
Correct Answer

(A) Perfect competition

Explanation

Solution: Agricultural goods market depicts characteristics close to Perfect competition. A perfectly competitive market has the following characteristics: There are many buyers and sellers in the market. Each company makes a similar product. Buyers and sellers have access to perfect information about price.

[#519] A firm's average total cost of production is Rs.300 at 5 units of output and Rs.320 at 6 units of output. The marginal cost of producing the 6th unit is
Correct Answer

(D) Rs.420

Explanation

Solution: The answer is Total cost for producing 5 units = 300 x 5 = 1500. Total cost for producing 6 units = 320 x 6 = 1920
Therefore, Marginal cost for producing the 6th unit = 1920-1500 = 420. This is a mathematical part that is used for the calculation of economics. At the same time, this also talks about production, and average rate of per unit. Wlso, the marginal cost involved for the total production is also taken into account.

[#520] The various combination of goods that can be produced in any economy when it uses its available resources and technology efficiency are depicted by
Correct Answer

(D) Production possibility curve

Explanation

Solution: The various combination of goods that can be produced in any economy when it uses its available resources and technology efficiency are depicted by Production possibility curve. A production possibility frontier (PPF) shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed.