Classical

Managerial Economics - Managerial Economics Multiple Choice Questions

26:  

The difference between monopoly equilibrium and competitive equilibrium is

A.

The MC should rise at the point of equilibrium under perfect competition whereas under monopoly it can rise, fall or remain constant

B.

Under perfect competition, the MC = MR whereas under monopolistic conditions this need not be the case

C.

There is no difference at all

D.

None of the above

 
 

Option: A

Explanation :


27:  

A decision standard that selects the alternative with the best of the worst possible outcomes is

A.

sensitivity analysis.

B.

game theory.

C.

the maximin criterion.

D.

the minimax criterion.

 
 

Option: C

Explanation :


28:  

In the case of a normal good, the income effect

A.

Partially offsets the substitution effect

B.

Completely offsets the substitution effect

C.

Is always equal to the substitution effect

D.

Reinforces the substitution effect

 
 

Option: D

Explanation :


29:  

Thomas Malthus believed

A.

Production cannot keep on increasing

B.

The population of a country will always increase

C.

Food supplies place a limit to the growth of population

D.

Population increase leads to a fall in output

 
 

Option: C

Explanation :


30:  

A firm may be considered to be of optimum size when

A.

Its total cost and total revenue curve coincide

B.

Its average cost is at a minimum

C.

Its fixed and average costs are equal

D.

It is faced with a horizontal demand curve

 
 

Option: B

Explanation :




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