Economics - Study Mode
[#631] If rate of interest is 10%, the PV (present value) of Rs.100 received in 1 year's time is
Correct Answer
(B) 90.9
Explanation
Solution: If rate of interest is 10%, the PV (present value) of Rs.100 received in 1 year's time is 90.9. "Present value" of a rupee received a year from now, is equal to only 90.9 paise [100/(1.1)].
[#632] Law of substitution is another name for law of
Correct Answer
(B) Law of Equi-MU
Explanation
Solution: Law of substitution is another name for law of Law of Equi-MU. The Law of equimarginal Utility is another fundamental principle of Econoxadmics. This law is also known as the Law of substitution or the Law of Maxixadmum Satisfaction.
[#633] As output increases, AC curve
Correct Answer
(D) All of the above
Explanation
Solution: The average cost is U-shaped because an increase in output increases the returns and reduces the total cost. As the curve continues to slope downwards, it enters a phase of constant returns where the returns and output are at their optimum level. After the constant level, continued increase in output stops yielding any further increments in the returns (diminishing returns) and the costs begin to rise, forcing the curve to start sloping upwards.
[#634] Identify the work of Irving Fisher
Correct Answer
(C) The Making of Index numbers
Explanation
Solution: The Making of Index numbers is the work of Irving Fisher. Index numbers played an important role in his monetary theory, and his book The Making of Index Numbers has remained influential down to the present day. Fisher's main intellectual rival was the Swedish economist Knut Wicksell.
[#635] Professor Knight is famous for his theory of
Correct Answer
(B) Profit
Explanation
Solution: Professor Knight is famous for his theory of Profit. He is best known for his Risk, Uncertainty and Profit, a monumental study of the role of the entrepreneur in economic life.