Assertion (A) In long run under perfect competition, all firms invariably get only normal profit.Reason (R) All firms incur minimum average cost and incur no selling cost due to absence of product differentiation.
A. (A) and (R) both are true
B. (A) is true, but (R) is false
C. (A) is false, but (R) is true
D. (A) and (R) both are false
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General price is that value which has no possibility of being established in the long run. This statement is
A. Correct
B. Wrong
C. Uncertain
D. None of these
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If coffee and tea are substitutes, what is the cross-price elasticity of demand for coffee with respect to the price of tea?
A. It is greater than 1
B. It is negative
C. It is a positive
D. They are both inferior goods
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The market efficiency can be improved even without any policy intervention, starting with monopolistic equilibrium
A. By levying tax per unit of production
B. By levying sales tax per unit
C. By levying profit tax
D. By imposing a price ceiling below the current equilibrium price
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Match the following.
List-I List-II
a. Cardinal approach
1. Marginal utility
b. Ordinal approach
2. Revealed preference theory
c. Hicks-Allen approach
3. Indifference curve
d. Consumer's surplus
4. Alfred Marshall
A. a-1, b-3, c-2, d-4
B. a-1, b-2, c-3, d-4
C. a-4, b-3, c-2, d-1
D. a-4, b-2, c-3, d-1
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When there is a very small change in the price of a commodity, i.e. there is a negligible change and there is a high change in the demand, then what is the demand for such a commodity?
A. Perfectly elastic demand
B. Perfectly inelastic demand
C. Relatively inelastic demand
D. Relatively elastic demand
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The important determinant of market size is
A. Monetary spread
B. Opportunities for the investors
C. Productivity
D. Savings
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Marginal cost curve cuts the average cost curve from below at
A. its lowest point
B. the left of the lowest point
C. right of the lowest point
D. All of the above
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A business, currently selling 10,000 units of its product per month, plans to reduce the retail price from Rs. 1 to Rs. 0.90. It knows from previous experience that the price elasticity of demand for this product is (-) 1.5. Assuming no other changes, the sales the business can now expect each month will be:
A. 8,500
B. 10,500
C. 11,000
D. 11,500
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Hicks substitution effect for a fall in the price of a commodity, other things remaining constant, is given by
A. a movement up a given indifference curve
B. a movement down a given indifference curve
C. a movement from a lower to a higher indifference curve
D. a movement from a higher to a lower indifference curve
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Which of the following is not ensured to the consumer in the globalization?
A. Lower prices
B. Better selection
C. Clear origin of goods and services
D. Improved services
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The meaning of Barter
A. Selling goods in cash
B. Selling goods on credit
C. Replacement of goods with goods
D. Selling the goods in installments
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An increase in the number of fast-food restaurants
A. Increases the demand for substitutes for fast-food meals
B. Raises the prices of fast-food meals
C. Increases the supply of fast-food meals
D. Increases the demand for fast-food meals
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In the case of an inferior good
A. substitution and income effects are positive
B. positive substitution effect is equal to the negative income effect
C. substitution effect is positive and income effect is negative
D. substitution and income effects are negative
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The MUx /MUy ratio is 10 and the Px /Py ratio is 8, so the consumer should buy
A. less X and more Y
B. more X and less Y
C. more X and more Y
D. less X and less Y
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From which Five Year Plan "Growth with Social Justice" has received emphasis?
A. Fifth
B. Sixth
C. Seventh
D. Tenth
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According to Keynes, investment means
A. Buying out existing factories
B. Buying shares in the existing firm
C. Buying an old building
D. Establishment of new factory
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The market price of a commodity in the long run is equal to the minimum average cost of its production, when it is in the market
A. Perfect competition
B. Monopoly
C. Oligopoly
D. Monopolistic competition
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In which economy, the consumer is called 'the Emperor'?
A. Socialism
B. Mixed
C. Capitalism
D. None of these
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Elasticity of demand is . . . . . . . .
A. Qualitative statement
B. Quantitative statement
C. Both (Qualitative & Quantitative statements)
D. None of these
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