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| Question No: 1 |
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Average product is defined as--
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| Total cost divided by the total units of input |
| Total output divided by the total units of input |
| Total cost divided by total output |
| Total output divided by total cost of input |
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| Question No: 2 |
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To manufacture a PC, you require a keyboard and a monitor. If you measure keyboard on the X-axis and monitor on the Y-axis, the shape of the Isoquant will be--
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| Convex to the origin |
| Concave to the origin |
| Downward sloping straight line |
| Upward sloping straight line |
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| Question No: 3 |
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When average product is highest?
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| Total product is maximum |
| Marginal product is maximum |
| Marginal product is zero |
| Marginal product is negative |
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| Question No: 4 |
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The intersection of marginal product curve and average product curve characterizes the point of--
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| Maximum profit |
| Maximum total product |
| Maximum average product |
| Maximum marginal product |
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| Question No: 5 |
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The average total cost will be minimum at a point where--
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| Marginal cost and average fixed cost curves intersect |
| Marginal cost and average variable cost curves intersect |
| Marginal cost and average cost curves intersect |
| Marginal cost is minimum |
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| Question No: 6 |
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Which of the following curves is called envelope curve?
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| Long run total cost curve |
| Long run average total cost curve |
| Long run marginal cost curve |
| Long run average variable cost curve |
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| Question No: 7 |
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Average fixed cost--
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| Always declines as the output increases |
| Is U-shaped, if there are increasing returns to scale |
| Is U-shaped, if there are decreasing returns to scale |
| Is intersected by marginal cost at its minimum point |
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| Question No: 8 |
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Which of the following cost curves is also called planning curve?
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| Long run total cost curve |
| Long run average cost curve |
| Long run marginal cost curve |
| Total fixed cost curve |
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| Question No: 9 |
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Economic profit is--
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| Accounting profit + Implicit cost |
| Accounting profit + Implicit cost+ Explicit cost |
| Accounting profit - Implicit cost |
| Accounting profit –Indirect costs |
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| Question No: 10 |
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The intersection of the marginal cost curve and the average cost curve characterizes the point of--
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| Maximum profit |
| Minimum average cost |
| Minimum marginal cost |
| Minimum opportunity cost |
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| Question No: 11 |
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Which of the following costs remain constant as the output increases?
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| Marginal cost and average fixed cost curves intersect |
| Marginal cost and average variable cost curves intersect |
| Average fixed cost |
| Total variable cost |
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| Question No: 12 |
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Increasing marginal costs with increase of output implies--
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| Decreasing average returns |
| Decreasing average fixed costs |
| Decreasing average variable costs |
| Decreasing total costs |
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| Question No: 13 |
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Which of the following cost curves is not ‘U’ shaped?
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| Long run average cost curve |
| Long run marginal cost curve |
| Short run average cost curve |
| Long run average variable cost curve |
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| Question No: 14 |
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What would be the shape of the total cost curve when a manufacturing unit is experiencing economies of scale?
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| Upward sloping |
| Rectangular hyperbola |
| Is U-shaped |
| Inverted U-shaped |
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| Question No: 15 |
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In perfect competition, a firm maximizing its profit will set its output at that level where--
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| Average variable cost = price |
| Marginal cost= price |
| Fixed cost= price |
| Average fixed cost= price |
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| Question No: 16 |
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It is advisable for a firm operating under perfect competition to shut down in the short run when the price of the product falls below the--
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| Total cost |
| Fixed cost |
| Average variable cost |
| Semi-fixed cost |
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| Question No: 17 |
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Which of the following is not a feature of perfect competition?
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| Large number of sellers and buyers |
| No one is large enough to influence the market price |
| Homogenous product |
| A horizontal demand curve |
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| Question No: 18 |
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In the long run, a perfectly competitive firm earns only normal profits because of --
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| Product homogeneity in the industry |
| Larger number of sellers and buyers in the industry |
| Free entry and exit of firms in the industry |
| Both (a) and (b) above |
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| Question No: 19 |
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The doctrine of invisible-hand applies to economies in which all the markets are--
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| Demand specific |
| Supply specific |
| Imperfectly competitive |
| Perfectly competitive |
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| Question No: 20 |
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The horizontal demand curve for a firm is one of the characteristic features of-
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| Oligopoly |
| Monopoly |
| Monopolistic competition |
| Perfect competition |
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| Question No: 21 |
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A perfectly competitive firm can increase its sales revenue by--
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| Reducing the price |
| Increasing the price |
| Increasing the production |
| Increasing the expenditure on advertising |
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| Question No: 22 |
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If a perfectly competitive industry is an increasing cost industry, the demand curve faced by a firm will be--
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| Upward sloping |
| Downward sloping |
| A horizontal straight line |
| A vertical straight line |
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| Question No: 23 |
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A perfectly competitive firm earns abnormal profits when its--
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| Average cost curve lies above its demand curve |
| Average revenue curve is tangent to average cost curve |
| Demand curve lies above the average cost curve |
| Marginal revenue curve lies above the average cost curve |
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| Question No: 24 |
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Which of the following is not a source of market imperfection?
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| Technology |
| Size of the firm |
| Product of the differentiation |
| Availability of resources |
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| Question No: 25 |
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Which of the following is not a barrier to entry?
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| High costs of production |
| Government regulations |
| Production differentiation |
| Tax sops to new firms |
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| Question No: 26 |
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The maximum profit condition for a monopoly firm is--
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| Total cost should be minimum |
| Total revenue should be maximum |
| Marginal revenue = Marginal cost |
| Quantity should be maximum |
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| Question No: 27 |
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Market inefficiencies can come from--
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| Externalities |
| Monopolies |
| Imperfect information |
| All of the above |
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| Question No: 28 |
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A monopolist who faces a negatively sloped demand curve operates in the region where the elasticity of demand is--
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| Less than one |
| Equal to one |
| Greater than one |
| Zero |
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| Question No: 29 |
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An entrepreneur in order to maximize the profits, without affecting the price, should produce an output where--
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| Average cost is minimum |
| Average variable cost is minimum |
| Average fixed cost is minimum |
| Marginal cost is equal to the average variable cost |
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| Question No: 30 |
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Macroeconomics is concerned with--
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| The level of output of goods and services |
| The general level of prices |
| The growth of real output |
| None of the above. |
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| Question No: 31 |
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Real GNP increases--
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| When there is an increase in the price level |
| When there is an increase in the output of goods and services |
| When there is an increase in the price level and/or the output of goods and services |
| None of the above |
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| Question No: 32 |
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Personal income includes all of the following except--
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| Transfer payments |
| Undistributed corporate profits |
| Personal income taxes |
| Personal savings |
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| Question No: 33 |
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NDP does not include--
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| Payments made for income taxes |
| Depreciation allowances |
| Undistributed profits |
| The value added from intermediate goods |
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| Question No: 34 |
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National income is--
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| NDP at market prices |
| NNP at market prices |
| NDP at factor cost |
| GNP at market prices |
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| Question No: 35 |
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The difference between personal disposable income and personal income is--
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| Residential investment |
| Indirect taxes |
| Subsidies |
| Personal taxes |
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| Question No: 36 |
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The net factor income earned within the domestic territory of a country must be equal to --
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| Net Domestic Product at factor cost |
| Net Domestic Product at market price |
| Net National product at factor cost |
| Personal income |
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| Question No: 37 |
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The ratio of the change in equilibrium output to the change in autonomous spending that causes change in output is called--
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| Marginal propensity to consume |
| Marginal propensity to save |
| Average propensity to save |
| Average propensity to consume |
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| Question No: 38 |
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When planned saving is greater than planned investment--
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| Output should increase |
| Output should decrease |
| Output should not change |
| Average propensity to consume |
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| Question No: 39 |
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An autonomous increase in investment--
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| Does not affect the IS curve |
| Shifts the LM curve to the left |
| Output should not change |
| None of the above |
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| Question No: 40 |
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What happens to the demand for coffee, when the price of tea increases ?
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| Increases |
| becomes zero |
| decreases |
| remains same |
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