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Exam 1: Cost and Demand Analysis in Economics

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Question 1

Multiple Choice

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Under increasing returns to scale, which of the following is the nature of the long run average cost curve?

A) downward sloping
B) upward rising
C) parallel to output axis
D) identical to short run average cost curve

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Question 2

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MC at any level of output is given by

A) slope of tc curve
B) slope of tvc curve
C) slope of either tc or tvc
D) slope of tfc

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Question 3

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If a firm's average cost is Rs.32 at 6 units of output and Rs.34 at 7 unit, which one among the following is the marginal cost of producing the 7th unit

Implicit cost of a factor of production is determined by its

The U shape of MC curve reflects

The saucer-type of modern Short run Average Variable Cost (SAVC) represents

When AC minimum in short run

The U shape of the average total cost curve reflects

Economic cost include both

The cost that cannot be recovered once spent

Cardinal utility analysis to consumer equilibrium was developed by

In long run, which factor of production is fixed?

Which of the following has a U shape?

The shape of TVC and TC are

The total fixed cost is a

Envelope curve is

The Long run Average Cost curve (LAC) in modern cost theory is roughly

Average Fixed Cost (AFC) curve will always be

The cost expressed not in terms of money but in terms of efforts of workers undergone for making the commodity

When individuals income falls (everything remain the same) his demand for a normal good