Economics

✅ The correct answer is C.
A firm under monopoly faces a downward sloping demand curve or average revenue curve. In monopoly, since average revenue falls as more units of output are sold, the marginal revenue is less than the average revenue. In other words, under monopoly the MR curve lies below the AR curve.

✅ The correct answer is D.
If the price of Pepsi decreases relative to the price of Coke and 7-Up, the demand for Coke and 7-Up will decrease. A decrease in the price of a good normally results in an increase in the quanti ty demanded by consumers because of the law of demand, and conversel y, quant ity demanded decreases when price rises. So. here the decrease in price of Pepsi will increase in demand for it, while the demand for Coke and 7-Up will decrease because of no change in their price level.

✅ The correct answer is D.
Income elasticity of demand for normal goods is always Positive. A positive income elasticity of demand is associated with normal goods; an increase in income will lead to a rise in demand.

✅ The correct answer is A.
The human effort applied to the production of goods is called Labour in economics. Labor is the human effort that can be applied to the production of goods and services.

✅ The correct answer is A.
An indifference curve slopes down towards right since more of one commodity and less of another result in Same satisfaction.

✅ The correct answer is A.
David Ricardo stated explicitly for the first time, the Law of Comparative Costs. Absolute advantage refers to the uncontested superiority of a country to produce a particular good better. Comparative advantage introduces opportunity cost as a factor for analysis in choosing between different options for production.

✅ The correct answer is B.
Rational decision making requires that One’s choices be consistent with one’s goals. Rational choice theory, also called rational action theory or choice theory, school of thought based on the assumption that individuals choose a course of action that is most in line with their personal preferences.

✅ The correct answer is B.
When the price of a substitute of X commodity falls, the demand for X Falls.

✅ The correct answer is D.
Supply curve will shift when Technology changes. Factors that can shift a supply curve either to the left or the right are changes in input prices, number of sellers, technology, social concerns and expectations.

✅ The correct answer is B.
In perfect competition, the firm’s Marginal cost curve above AVC has the identical shape of the firm’s supply curve. Under perfect competition average revenue is equal to marginal revenue, so the firm will produce up to that point where marginal revenue and marginal cost are equal. Short run supply curve of a perfectly competitive firm is that portion of marginal cost curve which is above average variable cost curve.