In which year was the process of economic liberalization practically started in India?
Select an option to see the answer and solution.
In a free economy the national income is Y (C, I, G, X, M) means consumption, investment, government expenditure and total exports and total imports respectively
A. Y = C + I + G + X
B. Y = C + I + G - X + M
C. Y = C + I + G + (X - M)
D. Y = C + I - G + X - M
Select an option to see the answer and solution.
Which of the following is the correct measure about the monopoly power of the firm?
A. AR = AC
B. MR = MC
C. AR = MC
D. None of these
Select an option to see the answer and solution.
Relation between AR, MR and elasticity of demand can be established by the formula
A. M R = A R ( 1 − e 1 )
B. A R = M R ( e e − 1 )
C. M R = A R ( e − 1 1 )
D. A R = ( e M R )
Select an option to see the answer and solution.
The indifference curves show-
A. how much a consumer can spend on X plus Y goods
B. higher order preference-combinations on the upper most segments
C. combinations of two goods at different points about which a consumer is neutral
D. more is consumed at lower prices
Select an option to see the answer and solution.
When a perfectly competitive industry is in long-run equilibrium, all firms in the industry
A. Earn zero economic profits
B. Produce a level of output where short-run marginal cost is equal to the short-run average total cost
C. Produce a level of output where long-run marginal cost is equal to long-run average cost
D. All of the above
Select an option to see the answer and solution.
If the change in demand of a commodity is in proportion to the change in its price, then it is called
A. Unit elasticity
B. Less than unit elasticity
C. Perfectly elastic
D. Perfectly inelastic
Select an option to see the answer and solution.
Demand for a commodity depends on the relative price of its
A. substitute goods
B. abnormal goods
C. inferior goods
D. None of the above
Select an option to see the answer and solution.
Gossen's second law states that
A. consumer maximises his total pleasure, when satisfaction gained from marginal units of all commodities is the same
B. consumers gain satisfaction only when P y P x = M U y M U x
C. when more units are consumed, marginal utility diminishes
D. All of the above
Select an option to see the answer and solution.
Profits are the reward for-
A. bearing uncertainty
B. bearing risks
C. parting with time preference of consumption
D. avoiding and absorbing non-insurable risks and uncertainties
Select an option to see the answer and solution.
Long-run cost curves are called:
A. operating curves
B. fixed curves
C. variable curves
D. planning curves
Select an option to see the answer and solution.
The Learner index measures
A. market power
B. price
C. price marginal cost
D. None of the above
Select an option to see the answer and solution.
If for a particular combination of labour and capital, the marginal productivity of capital is 4 units of output and the marginal rate of technical substitution is 2 units of capital per unit of labour, then the marginal productivity of labour will be
Select an option to see the answer and solution.
Starting from a monopoly equilibrium without any policy intervention, market efficiency can be improved by imposing a
A. per-unit production tax
B. per-unit sales tax
C. profit tax
D. price ceiling below the existing equilibrium price
Select an option to see the answer and solution.
Which of the following are consequences of price ceiling strategy by the government.
1. Black marketing
2. Hoarding
3. Rationing
A. Both 1 and 3
B. Both 1 and 2
C. Both 2 and 3
D. All of the above
Select an option to see the answer and solution.
The Cobb-Douglas production function Q = 4K = 0.6, L = 0.3 exhibits
A. constant returns to scale
B. increasing returns to scale
C. decreasing returns to scale
D. None of the above
Select an option to see the answer and solution.
Ricardo is famous
A. Population theory
B. Cost theory
C. Rent theory
D. Profit theory
Select an option to see the answer and solution.
The profit no profit of a perfectly competitive firm is
A. At the lowest point of the average variable cost curve
B. At the minimum point of the marginal cost curve
C. At the maximum point of the marginal cost curve
D. At the minimum point of the average fixed cost curve
Select an option to see the answer and solution.
'Doctrine of Caveat Emptor' means
A. buyer should make payment well in time
B. buyer should be beware of all aspects of buying
C. buyer will be responsible for the whole payment
D. buyer will not be responsible at any cost
Select an option to see the answer and solution.
Cost curves are supply curves only when
A. competition is pure
B. competition is monopolistic
C. competition is imperfect
D. competition is absent
Select an option to see the answer and solution.