Economics - Study Mode

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[#881] The conditions of long period equilibrium for a firm operating under perfect competition are 1. MC = MR 2. AC = AR 3. AR = MR 4. AC = MC Select the correct answer

(A) Only 1

(B) Both 1 and 3

(C) 2, 3 and 4

(D) All of the above

Correct Answer

(D) All of the above

[#882] Which among the following has the least price elasticity of demand?

(A) Car

(B) Tea

(C) Salt

(D) House

Correct Answer

(C) Salt

[#883] Imagine a country which has certain available resources and techniques. Assume that the country is producing two commodities A and B. Now if you draw a Production Possibility curve it will slope downwards. It will be

(A) A convex curve

(B) A concave curve

(C) A straight line curve

(D) A rectangular hyperbola

Correct Answer

(B) A concave curve

[#884] Generally, the profits are maximised in the short-run at the point at which

(A) MC = MR

(B) MR = 0

(C) MR is negative

(D) MC = 0

Correct Answer

(A) MC = MR

[#885] Consider the demand curve depicted in the following diagram- The elasticities of demand at prices P 1 and P 2 are different because, at these prices

(A) slopes are different

(B) prices are different

(C) quantities are different

(D) price-quantity ratios are different

Correct Answer

(D) price-quantity ratios are different