Isoquants intersect.
- True
- False
Answer: False
Isoquants never intersect, similar to ICs.
Economics – GK Questions
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Isoquant shows combinations of?
- Goods
- Inputs
- Prices
- Costs
Answer: Inputs
Different combinations of inputs producing the same output.
Law of variable proportions applies to ___ run.
- short
- drives out
- TRIMs (or Trade-Related Investment Measures)
- Treasury
Answer: short
Analyzes the effect of adding variable inputs to fixed ones.
Long run has fixed costs.
- True
- False
Answer: False
All costs are variable in the long run.
Short run has at least one ___ factor.
- Variable
- Fixed
- Sunk
- None
Answer: Fixed
In the short run, some inputs cannot be changed.
Monopsony is a market with?
- One seller
- One buyer
- Two sellers
- Many buyers
Answer: One buyer
A single buyer controls the entire market demand.
Cartel is a form of ___.
- India Debt Resolution Company Ltd (IDRCL)
- Countercyclical
- collusion
- arbitrage (or resale)
Answer: collusion
Cartels are formal collusive agreements among firms.
Oligopoly has no barriers to entry.
- True
- False
Answer: False
Oligopoly has significant barriers to entry.
Price discrimination is possible in?
- Perfect competition
- Monopoly
- Oligopoly
- Monopolistic
Answer: Monopoly
Requires market control and market segmentation.
Duopoly has ___ sellers.
- two
- Diminishing Marginal
- middle-income (and creditworthy low-income)
- Refinery Products
Answer: two
Duopoly means exactly two sellers dominate the market.
Price taker exists in monopoly.
- True
- False
Answer: False
A monopolist is a price maker, not a price taker.
Kinked demand curve model is for?
- Monopoly
- Perfect competition
- Oligopoly
- Monopsony
Answer: Oligopoly
Explains price rigidity in an oligopolistic market.
Monopolistic competition features ___ differentiation.
- product
- working
- lender of last resort
- purchasing (or buying)
Answer: product
Products are similar but differentiated by brand/features.
Monopoly has close substitutes.
- True
- False
Answer: False
Monopoly is characterized by having no close substitutes.
Perfect competition has?
- Differentiated products
- Homogeneous products
- Single seller
- Barriers
Answer: Homogeneous products
All firms produce identical/homogeneous products.
Arc elasticity uses?
- Derivative
- Mid-point method
- Percentage method
- Geometric method
Answer: Mid-point method
Uses the average of initial and final values.
Unitary elasticity means total revenue remains ___.
- balance (or sum to zero)
- constant
- indifference
- Total variable cost
Answer: constant
Total revenue is maximized and constant at Ed=1.
Necessities have highly elastic demand.
- True
- False
Answer: False
Necessities have highly inelastic demand.
Price elasticity > 1 means demand is?
- Inelastic
- Elastic
- Unitary
- Perfectly inelastic
Answer: Elastic
Ed > 1 indicates relatively elastic demand.
Consumer equilibrium is where budget line is ___ to IC.
- tangent
- Total receipts excluding borrowings
- low (or zero / no)
- crowding out
Answer: tangent
Tangency ensures MRS equals the price ratio.