Machine-translated by Google. Questions are authored in English.
Top

Microeconomics Questions and Answers

191.

The cost incurred by the firm in hiring labour is called as

Exam Year(s)

UGC NET - 2013,

Answer: A

The cost the firm incurs in hiring labour is an explicit cost. Explicit costs are the actual payments the firm makes to outsiders for the factors and services it uses, such as wages, rent, interest and raw materials, and they appear in the firm's accounts. Implicit cost is the imputed value of the firm's own resources, such as the owner's time and capital, for which no payment is made. Marginal cost is the addition to total cost from one more unit of output, and total cost is the sum of all costs, so neither of them names the payment for hired labour.

Please log in or register to report this question.

Discuss in Forum
192.

The locus of Pareto Optimality in Production and Consumption is given by

Exam Year(s)

UGC NET - 2013,

Answer: D

The locus of Pareto optimality in production and consumption together is given by the Grand Utility Possibility Curve (the grand utility possibility frontier). It is derived by combining the production efficiency given by the transformation curve with the consumption efficiency given by the utility possibility curve, and it shows the maximum utility one person can have for each level of the other's utility when both production and exchange are efficient. The utility possibility curve alone covers only the exchange side, the transformation curve only the production side, and the social welfare function is the ranking of the points, which picks the best among them and does not give the locus of the efficient ones.

Please log in or register to report this question.

Discuss in Forum
193.

List - IList - II
a. Tea and Coffee1. Veblen goods
b. Car and Petrol2. Substitutes
c. Gold and Diamonds3. Giffen goods
d. Ragi and Bajra4. Complementary

Codes : a b c d

Exam Year(s)

UGC NET - 2013,

Answer: B

The correct match is a-2, b-4, c-1, d-3. Tea and coffee are substitutes, a car and petrol are complements because they are used together, gold and diamonds are Veblen goods, whose demand rises when the price rises because they are bought for show, and ragi and bajra, the cheap staples of the poor, are the usual example of Giffen goods. This is the second option. The first option calls tea and coffee Veblen goods and a car and petrol substitutes, and the third and fourth options also put the complements and substitutes in the wrong places, so each fails at the first or second pair.

Please log in or register to report this question.

Discuss in Forum
194.

Assertion (A) : In the short run under perfect competition, given the market demand and market supply the industry is in equilibrium at that price which clears the market.

Reason (R) : In the long run all the firms in the industry earn profit.
Codes :

Exam Year(s)

UGC NET - 2013,

Answer: C

(A) is true but (R) is false, which is the third option. In the short run under perfect competition the industry is in equilibrium at the price at which market demand equals market supply, so the market clears, and this is the correct statement. The reason is wrong, because in the long run free entry and exit eliminate abnormal profit, so each firm earns only normal profit and not a positive profit. The first and second options accept the reason, and the fourth rejects the assertion, so they are wrong.

Please log in or register to report this question.

Discuss in Forum
195.

Put the following in chronological order on the basis of development :

i. Law of Demand
ii. Revealed Preference Analysis
iii. Indifference Curve Analysis
iv. Law of Diminishing Marginal Utility

Exam Year(s)

UGC NET - 2013,

Answer: B

The key gives i, iv, iii, ii, which is the second option: the law of demand, the law of diminishing marginal utility, indifference curve analysis and revealed preference analysis. The key treats the law of demand as the oldest of these ideas, the marginal utility law as the basis of the utility approach that followed, indifference curve analysis of Hicks and Allen as the replacement of cardinal utility in the 1930s, and Samuelson's revealed preference theory as the latest step, which dispenses with utility altogether. The other options put revealed preference ahead of indifference curves, or the indifference curve ahead of the utility law, so they break that sequence.

Please log in or register to report this question.

Discuss in Forum
196.

If the monopolist incurs loss in the short run, then in the long run

a. he will go out of business
b. he will stay in business
c. he will break even
d. any of the above is possible

Exam Year(s)

UGC NET - 2013,

Answer: D

The key accepts the fourth option, d only: any of the above is possible. A monopolist who makes a loss in the short run may go out of business if the price does not cover the average variable cost, may stay in business if it expects to recover the cost, or may break even in the long run after adjusting its plant, so no single outcome is certain. Options a and b, a and c, and a only each rule out at least one of the outcomes that can occur, which is why only the statement that any of them is possible is correct.

Please log in or register to report this question.

Discuss in Forum
197.

The condition of Pareto Optimality holds correct under

Exam Year(s)

UGC NET - 2013,

Answer: A

The condition of Pareto optimality holds under perfect competition. In a perfectly competitive economy, with no externalities, price equals marginal cost in every market and every consumer equates the marginal rate of substitution to the price ratio, so no reallocation can make someone better off without making another worse off. Monopolistic competition, oligopoly and monopoly set price above marginal cost, which breaks the condition, so the first option is the answer.

Please log in or register to report this question.

Discuss in Forum
198.

The Model of Managerial Enterprise is associated with

Exam Year(s)

UGC NET - 2013,

Answer: B

The Model of Managerial Enterprise is associated with R. Marris. In his theory of the managerial firm, managers aim to maximise the balanced growth rate of the firm, subject to a security constraint set by the owners' need for dividends and the fear of a take-over.

Baumol is known for the sales revenue maximisation model, a different managerial model. Gordon is linked with the theory of the firm in terms of managerial utility, and Scitovsky with welfare economics and external economies, so neither is the author of this particular model.

Please log in or register to report this question.

Discuss in Forum
199.

In the Paul Sweezy Model of Oligopoly in the Kinked Demand Curve, the point of kink represents

Exam Year(s)

UGC NET - 2013,

Answer: C

In Paul Sweezy's kinked demand curve, the kink marks the prevailing price and output of the oligopolist, so it represents both price and quantity rigidity. Rivals match a price cut but ignore a price rise, so the firm has no reason to move away from the kink in either direction.

The choice of only price rigidity, or of quantity rigidity alone, tells less than the model does, since the point on the curve fixes both the price and the quantity sold, which stay stable over a range of marginal cost changes.

Please log in or register to report this question.

Discuss in Forum
200.

Match List-I with List-II :

List - IList - II
(a) Offer Curves(1) Public Revenue
(b) Laffer Curves(2) Sticky Price
(c) Lorenz Curve(3) Reciprocal demand
(d) Kinked Demand Curve(4) Inequalities

Codes :
(a) (b) (c) (d)

Exam Year(s)

UGC NET - 2013,

Answer: A

The correct pairs are offer curves with reciprocal demand, Laffer curves with public revenue, the Lorenz curve with inequalities, and the kinked demand curve with sticky price. This is a-3, b-1, c-4 and d-2.

The offer curve, used in international trade by Marshall and Edgeworth, shows reciprocal demand between two countries. The Laffer curve links the tax rate to tax revenue. The Lorenz curve shows income inequality and the kinked demand curve explains price stickiness in oligopoly. The other code sets mix these up, for example by pairing the Lorenz curve with public revenue.

Please log in or register to report this question.

Discuss in Forum
Loading…

Topics

Other Subjects

Tags: Microeconomics Questions and Answers

About Us

ExamsRepo

Copyright © 2026 ExamsRepo . All Rights Reserved . With