Which of the following statement is incorrect?
A. The demand function specifies the relationship between quantity demanded and all the variables that determine demand
B. The demand curve is that part of the demand function, that expresses the relation between price charged for a product and the quantity demanded cetirus paribus
C. Elasticity can be measured in two different ways called point elasticity and arc elasticity
D. Arc elasticity measures the average elasticity at a point on the arc of the demand curve
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The movement along an indifference curve reflecting the substitution of cheaper products for more expensive ones is
A. supply effect
B. utility effect
C. a substitution effect
D. an income effect
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If a single monopolist enjoying internal economies of scale is replaced by a large number of producers operating under perfect competition, it may be said that
A. Both price and output will rise
B. Price will increase and output will fall
C. Price will increase but the effect on output will be indeterminate
D. Output will fall but the effect on price will be indeterminate
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The supply curve for the short-run competitive firm is the same as
A. Average variable cost curve
B. Marginal cost curve
C. That part of the MC curve which equals or is greater than AVC
D. Average total cost curve
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Match the following:
List-I (Principles)
List-II (Subject matter)
a. Kaldor's Theory
1. Distribution
b. Say's Law
2. Employment
c. Domar model
3. Growth
d. Neo-classical Analysis
4. Golden Rule of Accumulation
A. a-1, b-2, c-3, d-4
B. a-4, b-3, c-2, d-1
C. a-3, b-1, c-2, d-4
D. a-3, b-4, c-2, d-1
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Price effect in indifference curve analysis arises
A. When the consumer becomes either better off or worse off because price change is not compensated by income change
B. When the consumer is better off due to a change in income and price
C. When income and price change
D. None of the above
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The price which a consumer would be willing to pay for a commodity equals to his
A. Average utility
B. Marginal utility
C. Total utility
D. Does not have any relation to any one of these
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The demand function yield price function is given below. The price for market A will be: (Pa = 32 - 2Qa )
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Marginal product is
A. What is left to the entrepreneur after he has paid all his expenses
B. The extra output obtained from employing an additional unit of a factor
C. What is produced when all factors of production are employed at optimum efficiency
D. Annual output of the most efficient firm in the industry
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If the demand for using the Noida express way is given by Q = 40,000 - 2,500P
Where Q is the number of users (vehicles) and P is the amount of toll collected per unit who uses the express way. In light of this information which of the following is true?
A. At P = Rs. 6 and Q = 14,000, demand is price inelastic
B. At P = Rs. 7 and Q = 16,500
C. At P = Rs. 4 and Q = 9,500, demand is price elastic
D. All of the above
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A decrease in supply will have the greatest effect on price, when the product's demand is
A. elastic
B. inelastic
C. perfectly elastic
D. unitary elastic
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When the market supply curve for a commodity is negatively sloped, we have a case of
A. The stable equilibrium
B. Partial equilibrium
C. The general equilibrium
D. None of the above, unless additional information is given
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The normal long run average cost curve is influenced by the
A. Principle of diminishing returns
B. Economies and diseconomies of large scale production
C. Principle of constant returns to scale
D. All of the above
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The capital turnover is computed by
A. Standard Cost Invested Capital
B. Cash Capital × 100
C. Cash Invested Capital × 100
D. 100 Standard Cost
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Generally the profits are maximised in the short run at the point at which
A. Marginal cost of production is equal to the marginal return
B. Marginal return is zero
C. Marginal return is negative
D. Marginal cost is zero
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The concept of supply curve as used in economic theory is relevant only for the case of
A. Oligopoly competition
B. Perfect or pure competition
C. Monopolistic competition
D. Monopoly
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If, by increasing the quantity of labour used by one unit, the firm can give up 2 units of capital and still produce the same output, then the MRTSLK is:
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NNP at market price equals
A. GNP at factor cost
B. GNP at market price - Depreciation
C. GNP + Capital assets
D. None of the above
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Conditions of firm's equilibrium under perfect competition in short run is/are
A. MC = MR
B. slope of MC > slope of MR
C. MR = Price
D. All of the above
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The vertical demand curve for a commodity shows that its demand is
A. Fairly elastic
B. Perfectly elastic
C. Highly elastic
D. Moderately elastic
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