Managerial Economics - Study Mode

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[#291] The doctrine of consumer's surplus is based on

(A) Law of substitution

(B) Revealed preference theory

(C) Indifference curve analysis

(D) The law of diminishing marginal utility

Correct Answer

(D) The law of diminishing marginal utility

[#292] Gossen's Second law states that

(A) The consumers consume only when $$frac{{{P_x}}}{{{P_y}}} = M{U_m}$$

(B) When the income increases the money value or real income will decrease

(C) Once a person has spent his entire income he would have maximised his total pleasure from it only if the satisfaction gained from the last item of each commodity bought was the same

(D) None of these

Correct Answer

(C) Once a person has spent his entire income he would have maximised his total pleasure from it only if the satisfaction gained from the last item of each commodity bought was the same

[#293] Which of the following statement is correct?

(A) When the slope of the demand curve is zero, demand is infinitely elastic and when the slope is infinite, elasticity is zero

(B) When the slope of the demand curve is zero, elasticity is unity and also when the slope is infinite, elasticity is unity

(C) When the slope of the demand curve is zero, elasticity is also zero and when the slope is infinite, elasticity is also in finite

(D) None of these

(E) Inflation: An increase in the overall level of prices in the economy

(F) Productivity: The amount of goods and services produced from each hour of a worker's time

(G) Phillips curve: A curve that shows the short run trade off between inflation and unemployment

(H) All of the above

Correct Answer

(A) When the slope of the demand curve is zero, demand is infinitely elastic and when the slope is infinite, elasticity is zero
(H) All of the above

[#294] Expanding the output till the rising marginal cost is less than price, is the nature of

(A) imperfectly competitive market

(B) perfectly competitive market

(C) perfectly competitive industry

(D) perfectly competitive firm

Correct Answer

(D) perfectly competitive firm

[#295] At the shutdown point

(A) total losses of the firm equals TFC

(B) TR = TVC

(C) P = AVC

(D) All of the above

Correct Answer

(D) All of the above