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Exam 1: Cost and Demand Analysis in Economics

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Question 1

Multiple Choice

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The U shape of the average total cost curve reflects

A) ldmu
B) the law of variable proportions
C) consumer's surplus
D) reserve capacity

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Question 2

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Implicit cost of a factor of production is determined by its

A) sunk cost
B) variable cost
C) fixed cost
D) opportunity cost

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Question 3

Multiple Choice

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The cost that cannot be recovered once spent

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

Economic cost include both

Envelope curve is

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

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

The shape of TVC and TC are

In long run, which factor of production is fixed?

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

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

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

The U shape of MC curve reflects

MC at any level of output is given by

When AC minimum in short run

Which of the following has a U shape?

Cardinal utility analysis to consumer equilibrium was developed by

The total fixed cost is a

Average Fixed Cost (AFC) curve will always be