Question # 1

Under perfect competition in the long run a firm

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Always earns abnormal profit

Always earns normal profit

Usually earns abnormal profit

Usually faces loss

The difference between total revenue (TR) and total cost (TC) is called

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Loss

Profit

Profit or loss

Utility

A monopolistic firm has control of

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Whole market supply by one firm

Whole market supply by two firms

Whole market supply by a few firms

None of these

Firm earns abnormal profit, when

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AC=AR

AR>AC

AR<AC

AC=MC

Firm earns maximum profit at the point where

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Difference between total costs and total revenue is highest and the total revenue curve is above

Total costs and total revenue curves intersect each other

Total costs curve is above the total revenue curve

Difference between total costs and total revenue is minimum

When a firm earns abnormal profit in the short run, then its

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MC=MR=AR=AC all are equal

MC=MR=AR while AC is less

MC=MR=AR while AC is more

MC=MR=AR while AV is sometimes equal to them and sometimes less than tham

Monopoly is opposite to

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Perfect competition

Imperfect competition

Perfect competition and imperfect competition both

Oligopoly

Law of increasing return is more applicable in:

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Trade sector

Industrial sector

Agricultural sector

Power sector

The formula of calculating total revenue is

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P x Q

P x AC

AC x Q

TC / Q

To increase profit a firm minimizes

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Revenues

Costs

Demand

Supply

Which law is applicable when human and natural forces are balance ?

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Increasing cost

Constant cost

Diminishing cost

Both (a) and (c)

When average product increases, marginal product is:

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Also increases

Decreases

Zero

Negative

If variable costs of a firm are covered partly under perfect competition, then that firm

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Will run with normal profit

Will run with abnormal profit

Will run with minimum loss

Will not continue its business and close down

Laws of returns are also known as:

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Laws of substitution

Laws of consumption

Laws of cost

All of three

A monopolist firm usually earns

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Normal profit

Abnormal profit

Minimum loss

Abnormal loss

A firm is in equilibrium when its

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Marginal revenue is equal to marginal cost

Marginal revenue is more than marginal cost

Marginal revenue is less than marginal cost

Marginal revenue is equal to average cost

According to neo classical approach, output is the function of:

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Labour

Capital

Organization

Both (a) and (b)

Industry is in equilibrium under perfect competition in the long run, when every existing firm in the industry

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Is earning abnormal profit

Is earning normal profit

Is facing minimum loss

Is facing abnormal loss

In monopoly, when total revenue of a firm is maximum, then its marginal revenue is

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Maximum

Minimum

Zero

Negative

When total production increases, marginal product is:

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Positive

Negative

Zero

Infinite

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