Identify correct answer by highlighting with yellow color.

Q1. In the theory of production diminishing marginal returns to labour holds

a)In the long run

b)In the short run

c)In both Long run and short run

d)In the very long run

Q2. The Average Cost curve is

a) inverted U shaped in short runb) Upward sloping and linear

c) U shaped in short run d) Downward sloping

Q3.In case of Normal profit for a perfectly competitive firm which of the followings is true?

a)Price = Average Cost c) Price < Average Cost

b)Price > Average Costd) Price >Marginal revenue

Q4.In case of 'Shut down' condition for a perfectly competitive firm which of the followings is true?

a)Price>Minimum AVCc) Price = Minimum AVC

b)Price < Minimum AVCd) Price may be greater than AVC

Q5.The deadweight loss of monopoly emerges because

a)Price < Marginal Costb) Price > Marginal Costc) Price = Marginal costd)Price> AC

Q6. Which of the followings is a reason for the emergence of monopoly?

a)Exclusive ownership of resources needed to produce the good by monopoly firm

b)There are no barriers to entry and exit.

c)High customs duty

d)Higher corporate taxes

Q7. The MC curve cuts the AC curve

a)At the rising portion of AC

b)At the falling portion of AC

c)At the minimum point of AC

d)At both rising and falling part of AC

Q8. The Total variable cost curve is

a)Inverted U shapedb) U shapedc) inverted S shapedd) downward sloping

Q9. The Average Fixed Cist curve is

a)Monotonically declining with output

b)Decreasing with Labour input

c)Increasing with capital

d)May be decreasing with output

Q10 The area of consumer surplus in case of monopoly

a)Is larger than prefect competition

b)Is same as perfect competition

c)Is smaller than perfect competition

d)Is substantially bigger than monopolistic competition.