Tag: liquidity preference and profit

Questions Related to liquidity preference and profit

If AR curve is falling straight line, MR curve will lie below it in such a way that any line drawn from a point from y-axis parallel to x-axis to meet the AR curve is intersected by the MR curve _________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. mid-way

  2. more than half-way

  3. less than half-way

  4. any where

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Correct Option: A

In the case of consumer's demand curve determines the price, but in the case of producer ___________.
(i) AR curve determines the price
(ii) AR curve determines the price and income
(iii) MR curve determines  the price
(iv) MR curve and AR curve are determines the price

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. 1 only

  2. 2 only

  3. 3 only

  4. 4 only

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Correct Option: A

The marginal revenue of the monopolist is ____________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. Larger than price

  2. Equal to price

  3. Smaller than price

  4. Any of the above is possible

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Correct Option: C
Explanation:

In a monopoly, the marginal revenue is lower than the price because the demand curve is downward sloping. When prices go down, more units of the product are bought. Because of this, marginal revenue will not always equal price.

Competitive behaviour means _________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. when an individual firm is unable to influence the price at which the product is sold in the market

  2. when firms compete with each other to achieve a greater share of the market

  3. both A and B

  4. none of the above

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Correct Option: B
Explanation:

Competition or competitive behaviour means when firms compete with each other in a variety of ways to achieve a higher level of sales or a greater share of the market.

A perfectly competitive market has been defined as one where an individual
firm is unable to influence the price at which the product is sold in the
market.

An example of competitive behavior is ______.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. Samsung and Apple competing for higher market share 

  2. individual farmers

  3. Pepsi and Coca Cola competing for greater market share

  4. both A and C

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Correct Option: D
Explanation:
Example of competitive behaviour is when Coke and Pepsi or Samsung and Apple compete with each other in a variety of ways to achieve a higher level of sales or a greater share of the market. Conversely, we do not find individual farmers competing among themselves to sell a larger amount of crop. This is because both Coke and Pepsi or Samsung and Apple possess the power to influence the market price of soft drinks, while the individual farmer does not.

The author of the concept of quasi rent is ______________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. Ricardo

  2. J.M.Keynes

  3. Marshall

  4. Samuelson

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Correct Option: C

___________________ is income derived from machines and other appliances for production by man.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. Quasi-rent

  2. Rent

  3. Capital

  4. Profit

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Correct Option: A

Rent is the price paid for the use of ________________.

economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

  1. capital

  2. land

  3. labour

  4. organisation

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Correct Option: B

The one rupee note and coins are issued by _____________.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. RBI (Central Bank)

  2. Commercial Bank

  3. Ministry of Finance

  4. Central Government

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Correct Option: C
Explanation:

Reserve bank of India has the sole right to issue currency notes of various denominations except one rupee notes under Section 22 of Reserve bank of India Act. The one rupee note and coins are issued by ministry of finance and it bears the signature of Finance Secretary.

Other name for legal reserve requirement is ________________.

economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

  1. Cash reserve ratio

  2. Statutory liquidity ratio

  3. Variable reserve ratio

  4. Bank rate

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Correct Option: C
Explanation:

The variable reserve ration is a new method of credit control used by central banks in recent times. The variable reserve ratio device springs from the fact that central bank, as a Bankers Bank, must hold a part of the cash reserves of commercial banks.