Classical

Business Economics - Business Economics Multiple Choice Questions

26:  
Laws of increasing and constant returns are temporary phase of
A.

Law of variable proportion

B.

Law of Diminishing Return

C.

Law of proportionality

D.

Law of Diminishing Utility

 
 

Option: A

Explanation :


27:  
An indifference curve slopes down towards right since more of one commodity and less of another result in
A.

Same satisfaction

B.

Greater satisfaction

C.

Maximum satisfaction

D.

Decreasing expenditure

 
 

Option: A

Explanation :


28:  

If price of any commodity decreased by 20%  and the demand for that commodity increased by 40%, then elasticity of demand would be

A.

Perfectly elastic

B.

Perfectly inelastic

C.

Unit elastic

D.

Highly elastic

 
 

Option: D

Explanation :


29:  
A perfectly competitive market in the short run will be in equilibrium where
A.

MC = AC

B.

MC = MR

C.

MC = Zero

D.

None of these

 
 

Option: B

Explanation :


30:  
A consumer attains equilibrium at a point on the indifference comes where
A.

MRSxy = Px / Py

B.

MRSxy > Px / Py

C.

MRSxy < Px / Py

D.

MRSxy = Px Py

 
 

Option: A

Explanation :




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