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

There is a range when AC is falling and __________.

1. MC is rising.
2. TC is rising.
3. AVC is constant.
4. None of the above.

The firm and the industry are one and the same in:

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

If a firm's supply increases due to application of improved technology, this is known as:

1. Expansion in supply.
2. Contraction in supply.
3. Increase in supply.
4. Increase in quantity supplied.

Hint: If the supply of a commodity increases due to other factors than its price, it is called 'increase in supply'. Causes of increase in supply are improvement in technology, increase in price of its complementary goods, decrease in taxation, decrease in price of its substitute goods, etc.

Under monopoly, monopolist tries to increase his profits by restricting supply of his product and fixing:

1. Low price.
2. High price.
3. Market price.
4. All of these.

If marginal rate of transformation remains constant, the production possibility curve will be:

1. Hyperbola.
2. Convex.
3. Concave.
4. Straight line.

The ratio of total deposits that a commercial bank has to keep with Reserve Bank of India is called:

1. Statutory liquidity ratio.
2. Deposit ratio.
3. Cash reserve ratio.
4. Legal reserve ratio.

An increase in quantity supplied refers to a situation where the producers are willing to supply:

1. A larger quantity of the commodity at decreased price.
2. A larger quantity of the commodity at increased price of inputs.
3. A larger quantity of the commodity at increased price of related goods.
4. A larger quantity of the commodity at increased price.

To economists, the main difference between short run and long run is that:

1. In short run all inputs are fixed, while in long run all inputs are variable.
2. In short run the firm varies all of its inputs to find the least cost combination of inputs.
3. In short run, at least one of the firm's input level is fixed.
4. In long run, the firm is making a constrained decision about how to use existing plant and equipment efficiently.

The second glass of lemonade gives lesser satisfaction to a thirsty boy. This is a clear case of

1. Law of demand.
2. Law of diminishing returns.
3. Law of diminishing utility.
4. Law of supply.

The usual shape of Production Possibility Curve is ______ towards the origin.

1. Convex.
2. Concave.
3. Straight line.
4. Rectangular.