Economics - Study Mode

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[#741] A perfectly competitive firm maximizes its profit by producing output at which its marginal cost equals its

(A) Marginal revenue

(B) Average revenue

(C) Average variable cost

(D) Average fixed cost

Correct Answer

(B) Average revenue

[#742] When labour is plotted on X-axis and capital is plotted on Y-axis and an isoquant is prepared, then which of the following statement(s) is/are
false? 1. Marginal rate of technical substitution of labour for capital is equal to the slope of the iso-quant. 2. Marginal rate of technical substitution of labour for capital is equal to change in the units of capital divided by the change in the units of labour. 3. Marginal rate of technical substitution of labour for capital is the ratio of marginal productivity of capital to marginal productivity of labour.

(A) Both 1 and 2

(B) Only 3

(C) Only 1

(D) Only 2

Correct Answer

(C) Only 1

[#743] Match the items of List-I with those of List-II List-I List-II a. Substitute goods 1. Negative cross elasticity b. Complementary goods 2. Low price elasticity c. Giffen goods 3. Positive cross elasticity d. High-income group 4. Positive price elasticity

(A) a-3, b-4, c-2, d-1

(B) a-3, b-1, c-4, d-2

(C) a-2, b-3, c-1, d-4

(D) a-1, b-2, c-3, d-4

Correct Answer

(B) a-3, b-1, c-4, d-2

[#744] Globalization is the term used to describe process of removal of restriction on which one of the following?

(A) Foreign trade

(B) Investment

(C) Both A and B

(D) None of the above

Correct Answer

(C) Both A and B

[#745] In the long run, the cost and output relationship depends on:

(A) Return to scale

(B) Fixed proportion of the variables

(C) Return to the variable factors

(D) Return to the fixed factors

Correct Answer

(A) Return to scale