When marginal costs are below average total costs ?

A. average fixed cost is rising
B. average total cost is falling
C. average total cost is raising
D. average total cost is minimized

If as the quantity produced increase a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will ?

A. be flat (horizontal)
B. slope upward
C. slope downward
D. be u-shaped.

Jamil’s car is in need of repair, so John decides to sell it avoid the repair bill. Unaware of the problem, Shahab buys the car. This is an example of ?

A. Hidden actions
B. Adverse selection
C. Moral hazard
D. Adverse selection

Markus is a travelling salesman for an apparel company. In this employment relationship, Markus is the ?

A. Agent
B. Principle
C. Screener
D. Signaler

Which of the following is an example of a signal that is used to reveal private information ?

A. Enzo carefully chooses a special gift for josephine
B. Josephine earns her mba from the harvard business school
C. Lexus advertises its cars during the football world cup final.
D. All of these answers are correct

Which of the following is not a method firms use to avoid the moral hazard problem in the employment relationship ?

A. They pay employees with delayed compensation such as a year-end bonus
B. They buy life insurance on their workers
C. They pay above equilibrium wages
D. They put hidden video cameras in the workplace

A life insurance company forces Enzo to have a medical examination prior to selling him insurance ?

A. Transitivity
B. Impossibility
C. Independence
D. Unanimity

Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The economics profit at Naila’s pottery factory is ?

A. rs80,000
B. rs30,000
C. rs75,000
D. rs70,000

Accounting profit is equal to total revenue minus ?

A. implicit costs
B. variable costs
C. the sum of implicit and explicit costs.
D. explicit costs.

Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The accounting profit at Naila’s pottery factory is ?

A. rs30,000
B. rs35,000
C. rs75,000
D. rs70,000