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

Marginal cost is defined as:

1. The change in total cost due to a one unit change in output.
2. Total cost divided by output.
3. The change in output due to a one unit change in an input.
4. Total product divided by the quantity of input.

When less quantity is supplied at a lower price, it shows:

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

During depression, it is advisable to:

1. Lower bank rate and purchase securities in the market.
2. Increase bank rate and purchase securities in the open market.
3. Decrease bank rate and sell securities in the open market.
4. Increase bank rate and sell securities in the open market.

The demand of which type of goods do not decrease with increase in their price?

1. Comforts.
2. Conspicuous goods.
3. Necessities.
4. Both (b) and (c).

The quantity supplied of a piece of goods or service is the amount that

1. Is actually bought during a given time period at a given price.
2. Producers wish that they could sell that at a higher price.
3. Producers plan to sell during a given time period at a given price.
4. People are willing to buy during a given time period at a given price.

The branch of economic theory that deals with the problem of allocation of resources is:

1. Microeconomic theory.
2. Macroeconomic theory.
3. Econometrics.
4. None of them.

Reason for the U-shape of MC curve is:

1. Law of Variable Proportions.
2. Returns to Scale.
3. Law of diminishing cost.
4. Law of increasing cost.

Suppose total revenue is rising at a constant rate as more and more units of a commodity are sold, marginal revenue would be: (choose the correct alternative)

1. Greater than average revenue.
2. Equal to average revenue.
3. Less than average revenue.
4. Rising.

How is law of demand expressed functionally?

1. DX = f (PX), ceteris paribus.
2. DX = f (PZ), ceteris paribus.
3. DX = f (Y), ceteris paribus.
4. DX = f (T), ceteris paribus.

Which exchange rate measures the average relative strength of a given currency with respect to other currencies without eliminating the effect of change in price?

1. Nominal exchange rate.
2. Nominal effective exchange rate.
3. Real exchange rate.
4. Real effective exchange rate.