Question:

The short run as the term is used in connection with the theory of the firm is a period of time:

A.

Too short for the firm to vary all its inputs

B.

No more than a week

C.

Long enough for the firm to vary the quantity of all its inputs

D.

In which the fixed costs are zero

Answer» a. Too short for the firm to vary all its inputs

Question:

Inflation can not be caused by:

A.

Cost push factor

B.

Excessive money supply

C.

Excessive production

D.

Demand pull factors

Answer» c. Excessive production

Question:

When AR is above AC, firm earns:

A.

Supernormal profit

B.

Loss

C.

Breakeven point

D.

Minimise losses

Answer» a. Supernormal profit

Question:

The representative firm in a purely competitive industry:

A.

will always earn a profit in the short run.

B.

may earn either an economic profit or a loss in the long run.

C.

will always earn an economic profit in the long run.

D.

will earn an economic profit of zero in the long run.

Answer» d. will earn an economic profit of zero in the long run.

Question:

Which of the following is an important form collusive oligopoly

A.

Bilateral monopoly

B.

Monopoly

C.

cartel

D.

Kinked Oligopoly

Answer» c. cartel