The theory of the firm under perfect competition — Economics STD 12 Humanities & Commerce — Question

What is the relation between price and marginal cost at equilibrium, when price remains constant with the rise in output.

1. Price = Marginal Cost.
2. Price > Marginal Cost.
3. Price < Marginal cost.
4. None of these.

According to the law of returns to a factor, third stage of production begins when:

1. TP starts falling.
2. MP starts falling.
3. AP starts falling.
4. MP becomes equal to AP.

A movement along the demand curve for soft drinks is best described as:

1. An increase in demand.
2. A decrease in demand.
3. A change in quantity demanded.
4. A change in demand.

Shift in demand curve means:

1. Fall in demand due to rise in own price of the commodity.
2. Rise in demand due to fall in own price of the commodity.
3. Change in demand due to factors other than the change in own price of the commodity.
4. None of these.

In the short run, when a firm produces zero output, its total cost is equal to:

1. Zero.
2. Variable cost.
3. Fixed cost.
4. Marginal cost.

The firm and the industry are one and the same in __________.

1. Perfect competition.
2. Monopolistic competition.
3. Duopoly.
4. Monopoly.

When same units are demanded at a higher price, it shows:

1. Increase in demand.
2. Expansion in demand.
3. Decrease in demand.
4. Contraction in demand.

Which out of the following is an indirect tax?

1. Corporation tax.
2. Value Added Tax.
3. Income Tax.
4. Wealth Tax.

Assume that consumers' incomes and the number of sellers in the market for goods A both decrease. Based upon this information, we can conclude, with certainty, that the equilibrium _________.

1. price will increase.
2. price will decrease.
3. quantity will increase.
4. quantity will decrease.

______ items are those items which do not create a liability or do not lead to reduction in assets.

1. Capital.
2. Development.
3. Non-development.
4. Revenue.