Question:

The equality between MC and MR is

A.

A necessary condition for equilibrium of the firm under perfect condition

B.

A sufficient condition for equilibrium of the firm under perfect competition

C.

A necessary but not sufficient condition for equilibrium of the firm under perfect condition

D.

A necessary and sufficient condition for equilibrium of the firm under perfect condition

Answer» c. A necessary but not sufficient condition for equilibrium of the firm under perfect condition

Question:

The reason the marginal cost curve eventually increases as output increases for the typical firm is because:

A.

Of diseconomies of scale.

B.

Of minimum efficient scale.

C.

Of the law of diminishing returns.

D.

Normal profit exceeds economic profit.

Answer» c. Of the law of diminishing returns.

Question:

Total utility is maximum when

A.

marginal utility is zero

B.

marginal utility is maximum

C.

marginal utility increases

D.

average utility is maximum

Answer» a. marginal utility is zero

Question:

Comparing a monopoly and a competitive firm, the monopolist will

A.

produce less at a lower price

B.

produce more at a lower price

C.

produce less at a higher price

D.

produce less at a lower price

Answer» c. produce less at a higher price

Question:

Which policy is effective in the intermediate range?

A.

Monetary policy

B.

Fiscal policy

C.

Both policies

D.

None of these

Answer» c. Both policies

Question:

The value of investment multiplier depends on:

A.

APC

B.

APS

C.

MPC

D.

MPS

Answer» c. MPC