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Economics Past Questions and Answers

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Economics Questions

Question 1921:

Average product is less than marginal product when

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A There is constant returns to scale
B There is increasing returns to scale
C There is decreasing returns to scale
D Diminishing returns set in

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Question 1922:

A firm enjoying economies of scale is said to be

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A Reducing average cost as production increases
B Benefiting from the activities of other firms
C Maximizing profits as production increases
D Having an upward-sloping average cost curve

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Question 1923:

The rising portion of the long-run average cost curve of a firm is an indication that it is experiencing

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A Increasing efficiency
B Economies of scale
C Diseconomies of scale
D Increasing marginal returns

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Question 1924:

An industry's supply curve is more likely to be elastic when firms are

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A Enjoying free entry and exit
B Operating at full capacity
C Operating below capacity
D Maximizing profits

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Question 1925:

One of the characteristics of monopolistic competition is that

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A There is mobility of factors of production
B No single seller dominates the market
C The firms are price-takers
D Consumers have perfect knowledge of price

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