Economics - Study Mode

[#1461] Which is NOT a cause of shift in cost curves of a firm?
Correct Answer

(D) Price of product

Explanation

Solution: Price of product is not a cause of shift in cost curves of a firm. Cost curves shift in response to changes in two factors: If a technological change results in the firm using more capital, the average fixed cost curve shifts upward and at low levels of output, the average total cost curve may shift upward. At large output levels, average total cost decreases.

[#1462] Who first raised the fear of a world food shortage?
Correct Answer

(B) T.R.Malthus

Explanation

Solution: T.R.Malthus first raised the fear of a world food shortage. In 1798 Thomas Robert Malthus famously predicted that short-term gains in living standards would inevitably be undermined as human population growth outstripped food production, and thereby drive living standards back toward subsistence.

[#1463] The minimum wage is an example of
Correct Answer

(A) Price floor

Explanation

Solution: The minimum wage is an example of Price floor. A price floor is the absolute minimum price at which a good or service (labor in this case) can be sold and it is usually set by the government. Price floors are set above the market equilibrium price of a good or service.

[#1464] During short period, diminishing returns may follow because
Correct Answer

(D) Quantity of any one factor is fixed

Explanation

Solution: During short period, diminishing returns may follow because quantity of any one factor is fixed.

[#1465] MC is given by
Correct Answer

(B) Slope of TC

Explanation

Solution: MC is given by Slope of TC. Slope tells us how (total) costs change when we change output/quantity produced.