Q1. In the theory of production, diminishing marginal returns to labour holds in the short run because a) initially labour may be less productive b) In the medium run labour enjoys economies of scale c) At the later stage of production each extra unit of labour gets less access to other inputs d) In the very long run labour is highly productive Q2. The Average Cost curve is a) inverted U shaped in short run b) Upward sloping and linear c) Ú shaped in short run d) Downward sloping Q3. In case of Normal profit for a perfectly competitive firm which of the followings is true? a) Price = Average Cost c) Price < Average Cost %3| b) Price > Average Cost d) Price >Marginal revenue Q4. Which of the followings is an assumption for a perfectly competitive firm ? a) Product quality is indistinguishable c) Demand curve for a P.C. Firm is vertical b) High barriers to entry & exit d) Price that prevails in the market> Marginal cost Q5. The deadweight loss of monopoly emerges because a) This area cannot be utilized by consumers b) Monopoly produces large quantity c) Price charged by monopolist = Marginal cost d) This area cannot be utilized as monopoly profit or consumer surplus Q6. Which of the followings is a reason for the emergence of monopoly? a) Exclusive ownership of resources needed to produce the good by monopoly firm b) There are no barriers to entry and exit. c) High customs duty d) Higher corporate taxes Q7. For a perfectly competitive firm, which of the followings implies shut-down condition? a) Size of loss equals to Total fixed cost b) Size of loss equals to total fixed cost and part of total variable cost c) Size of loss equals to total revenue d) Size of loss may be equals to total cost Q8. The similarity between Monopoly and Monopolistic competition is a) Free entry and exit of firms b) Quality of product is same c) Price charged exceeds marginal revenue d) Demand curves are perfectly elastic. Q9. The theory of consumer behavior states that to maximize utility with fixed income and fixed prices of goods a) Expenditure for each good is same throughout b) Marginal utility is same for all goods c) Per dollar total utility is same for all goods d) Per dollar Marginal satisfaction should be same for all goods Q10 The area of consumer surplus in case of monopoly a) Is larger than prefect competition b) Is same as perfect competition c) Is smaller than perfect competition d) Is substantially bigger than monopolistic competition.

Q1. In the theory of production, diminishing marginal returns to labour holds in the short run because a) initially labour may be less productive b) In the medium run labour enjoys economies of scale c) At the later stage of production each extra unit of labour gets less access to other inputs d) In the very long run labour is highly productive Q2. The Average Cost curve is a) inverted U shaped in short run b) Upward sloping and linear c) Ú shaped in short run d) Downward sloping Q3. In case of Normal profit for a perfectly competitive firm which of the followings is true? a) Price = Average Cost c) Price < Average Cost %3| b) Price > Average Cost d) Price >Marginal revenue Q4. Which of the followings is an assumption for a perfectly competitive firm ? a) Product quality is indistinguishable c) Demand curve for a P.C. Firm is vertical b) High barriers to entry & exit d) Price that prevails in the market> Marginal cost Q5. The deadweight loss of monopoly emerges because a) This area cannot be utilized by consumers b) Monopoly produces large quantity c) Price charged by monopolist = Marginal cost d) This area cannot be utilized as monopoly profit or consumer surplus Q6. Which of the followings is a reason for the emergence of monopoly? a) Exclusive ownership of resources needed to produce the good by monopoly firm b) There are no barriers to entry and exit. c) High customs duty d) Higher corporate taxes Q7. For a perfectly competitive firm, which of the followings implies shut-down condition? a) Size of loss equals to Total fixed cost b) Size of loss equals to total fixed cost and part of total variable cost c) Size of loss equals to total revenue d) Size of loss may be equals to total cost Q8. The similarity between Monopoly and Monopolistic competition is a) Free entry and exit of firms b) Quality of product is same c) Price charged exceeds marginal revenue d) Demand curves are perfectly elastic. Q9. The theory of consumer behavior states that to maximize utility with fixed income and fixed prices of goods a) Expenditure for each good is same throughout b) Marginal utility is same for all goods c) Per dollar total utility is same for all goods d) Per dollar Marginal satisfaction should be same for all goods Q10 The area of consumer surplus in case of monopoly a) Is larger than prefect competition b) Is same as perfect competition c) Is smaller than perfect competition d) Is substantially bigger than monopolistic competition.

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section7.A: Appendix: A Closer Look At Production And Cost

Problem 1AQ

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