Question:

In the long run, a perfectly competitive firm earning zero economic profits

A.

will exit the market in search of more profitable use of its resources

B.

is earning a normal rate of return on its investments

C.

signifies that the firm is performing poorly and so should exit the market

D.

will break even

Answer» b. is earning a normal rate of return on its investments

Question:

When Q = f (P), the elasticity coefficient is measured by:

A.

∆Q/∆P / P/Q

B.

∆P/∆Q * Q/P

C.

∆Q/∆P * P/Q

D.

P/∆Q / Q/P

Answer» c. ∆Q/∆P * P/Q

Question:

Indifference curves are

A.

always parallel

B.

may be parallel

C.

may not be parallel

D.

both b and c

Answer» d. both b and c

Question:

In the case of paper currency

A.

Intrinsic value and face value are equal

B.

Intrinsic value is less than face value

C.

Intrinsic value is greater than face value

D.

None of the above

Answer» b. Intrinsic value is less than face value