Q. A significant property of the Cobb – Douglas production function is that the elasticity of substitution between inputs is: A. Equal to unity B. More than unity C. Less than unity D. Zero Answer: Equal to unity
Q. In the short term, when the output of a firm increases, its average fixed cost: A. Increase B. Decrease C. Remains constant D. First declines and then rises Answer: Decrease
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Q. Total costs in the short-term are classified into fixed costs and varibale costs. Which one of the following is a variable cost? A. Cost of raw materials B. Cost of equipment C. Interest payment on past borrowing D. Payment of rent on buildings Answer: Cost of raw materials
Q. Which of the following cost curves is never Un-shaped? A. Average cost curve B. Marginal cost curve C. Average variable cost curve D. Average fixed cost curve Answer: Average fixed cost curve
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Q. Which cost increases continuously with the increase in production? A. Average cost B. Marginal cost C. Fixed cost D. Variable cost Answer: Variable cost
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Q. The supply of a commodity refers to: A. Actual production of the commodity B. Total existing stock of the commodity C. Stock available for sale D. Amount of the commodity offered for sale at a particular price per unit of time Answer: Amount of the commodity offered for sale at a particular price per
Q. A vertical supply curve parallel to the price axis implies that the elasticity of supply is: A. Zero B. Indinity C. Equal to one D. Greater than zero but less than infinity Answer: Zero
Q. An ISO-product curve slopes: A. Downward to the left B. Downward to the right C. Upward to the left D. Upward to the right Answer: Downward to the right
Q. Production is a function of: A. Profits B. Costs C. Inputs D. Price Answer: Profits
Q. The Revealed Preference Theory deduces the inverse price-quantity relationship from: A. Assumption of indifference B. Postulate of utility maximization C. Observed behaviour of the consumer D. Introspection Answer: Observed behaviour of the consumer
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