1291. If a maximum price is set below equilibrium there will be :
A. A price fall
B. A price increase
C. Excess supply
D. Excess demand *
1292. Which of the following is true ?
A. If the marginal cost is greater than the average cost the average cost falls :
B. If the marginal cost is greater than the average cost the average cost increases *
C. If the marginal cost is positive total costs are maximized
D. None of the above
1293. According the law of diminishing returns :
A. The marginal product falls as more units of a variable factor are added to a fixed factor *
B. Marginal utility falls as more units of a product are consumed
C. The total product falls as more units ofa variable factor ared added to a fixed factor
D. The marginal product increases as more units of a variable factor are added t a fixed factor
1294. The law of diminishing returns assumes :
A. There are no fixed factors of production
B. THere are no variable factors of production
C. Utility is maximized when marginal product falls
D. Some factors of production are fixed *
1295. When internal economics of scale occur :
A. Total costs fall
B. Marginal costs increase
C. Average costs fall *
D. Revenue falls
1296. The first level of output at which the long run average costs are minimized is called :
A. The minimum efficient scale *
B. The minimum external scale
C. The maximum external scale
D. The maximum effective scale
1297. The average variable cost curve :
A. Is dervied from the average fixed costs
B. Converges with the average cost as output increases *
C. Equals the total costs divided by the output
D. Equals revenue minus profits
1298. If marginal cost is positive and falling :
A. Total cost is falling
B. Total cost is increasing at a falling rate *
C. Total cost is falling at a falling rate
D. Total cost is increasing at an increasing rate
1299. If marginal product is below average product :
A. The total product will fall
B. The average product will fall *
C. Average variable costs will fall
D. Total revenue will fall
1300. If the marginal revenue is less than the marginal cost then to profit maximize a frim should :
A. Reduce output *
B. Increase output
C. Leave output where it is
D. Increase costs