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 Starts from origin

TVC CURVE starts from origin. TVC starts from origin which shows TVC is ZERO when output is zero. TC curve is DERIVED by adding the TFC and TVC curve.

 Innovation

According to JOSEPH Schumpeter, PROFIT is the reward for Innovation. He believed that an entrepreneur can earn economic PROFITS by INTRODUCING successful innovations.

 Ministry of Finance

The DEPARTMENT of Economic Affairs, Finance Ministry of India presents the Economic Survey in the parliament EVERY year, just before the UNION Budget.It is PREPARED under the guidance of the Chief Economic Adviser, Finance Ministry. It is the ministry's view on the annual economic development of the COUNTRY.

 Constant marginal UTILITY of money

Constant marginal utility of money is not a assumption of the theory of demand BASED on ANALYSIS of indifference curves. An indifference curve is a graph that shows a combination of two GOODS that give a consumer equal satisfaction and utility, thereby making the consumer INDIFFERENT.

 Slope of TC and TR is the same

PROFIT is maximum when Slope of TC and TR is the same. To OBTAIN the profit maximizing output quantity, we start by recognizing that profit is EQUAL to total REVENUE (TR) minus total cost (TC).

 Matching concept

Amortization of unidentified INTANGIBLE ASSETS is in TERMS of Matching concept. In the Matching Concept of Accounting, all the expenses MATCHED with the revenue of an accounting PERIOD should only be taken into consideration.

 Trial Balance

Trial Balance is not a financial statement. Trial Balance is a LIST of closing balances of ledger ACCOUNTS on a certain date and is the first step towards the preparation of financial statements. It is usually PREPARED at the end of an accounting period to assist in the drafting of financial statements.

 Conservatism concept

Provision for BAD debts is made as PER the Conservatism concept. The conservatism PRINCIPLE is the general concept of recognizing expenses and liabilities as soon as possible when there is uncertainty about the outcome, but to only recognize REVENUES and ASSETS when they are assured of being received.

 INCREASE gross PROFIT as WELL as net profit

If the opening inventory of a BUSINESS is undercast, it will Increase gross profit as well as net profit.

 Current LIABILITY

Declared dividend should be classified in the balance sheet as a Current liability. DIVIDENDS payable are dividends that a company's board of DIRECTORS has declared to be payable to its SHAREHOLDERS. Until such TIME as the company actually pays the shareholders, the cash amount of the dividend is recorded within a dividends payable account as a current liability.

 DIMINISHING RETURNS to scale

If all inputs are trebled and the RESULTANT OUTPUT is doubled, this is a case of Diminishing returns to scale.

 PROPORTION of skilled WORKERS population

The labour force participation RATE is the proportion of skilled workers population. It refers to the number of people who are either employed or are ACTIVELY looking for work.

 All of the above

An increase in the supply of a commodity is CAUSED by IMPROVEMENTS in technology, Fall in the prices of other commodities and Fall in the prices of FACTORS of production.

 Both 'a' and 'b'

Demand CURVE can be derived from MU curve and PCC. Marginal utility and the LAW of DIMINISHING marginal utility can be used to provide INSIGHT into market demand, the law of demand, and the demand curve. Downward-sloping price consumption curve for a good means that demand for the good is elastic, upward-sloping price consumption curve means that demand for the good is inelastic and horizontal straight-line price consumption curve means that demand for the good is unit elastic.

 Zero

When total utility BECOMES maximum, then MARGINAL utility will be Zero. It is based in the law of diminishing marginal utility which says 'as more and more units of a GOOD are CONSUMED, MU i.e level of satisfaction derived from each successive unit goes on falling because desire for that commodity tend to FALL.

 Index numbers

Index numbers STATISTICAL measure helps in measuring the purchasing power of MONEY. Index numbers POSSESS much practical importance in measuring changes in the cost of living, PRODUCTION trends, trade, income variations, etc.

 Price TAKER

A firm under perfect competition is Price taker. In perfect market conditions (ALSO called perfect competition) a firm is a price taker because other firms can ENTER the market easily and produce a product that is indistinguishable from every other firm's product. This makes it IMPOSSIBLE for any firm to set its own prices.

 Reserve BANK of INDIA

Reserve bank of India is the 'LENDER of the last resort' in the BANKING structure of India. A lender of last resort is an institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are EXPERIENCING financial difficulty or are considered highly risky or near collapse.

 A tested hypothesis

An ECONOMIC theory is a tested hypothesis. Hypothesis testing is an act in statistics whereby an analyst tests an ASSUMPTION regarding a population parameter. The methodology employed by the analyst depends on the nature of the data used and the reason for the analysis. Hypothesis testing is used to INFER the result of a hypothesis performed on SAMPLE data from a larger population.

 INNUMERABLE

Human WANTS are Innumerable. With the passage of time and human progress, we FIND a marked growth in the number and variety of wants. Modern man has COUNTLESS wants.

 Will change total revenue in same direction

If demand is INELASTIC, a change in the price will change total revenue in same direction. When demand is price inelastic, a given percentage change in price results in a smaller percentage change in quantity demanded. That IMPLIES that total revenue will MOVE in the direction of the price change: an increase in price will increase total revenue, and a reduction in price will REDUCE it.

 Other things remaining same

Ceteris Paribus MEANS other things remaining same. The Latin phrase ceteris paribus – literally, “holding other things CONSTANT” – is commonly translated as “all else being equal.” A dominant assumption in mainstream economic thinking, it acts as a shorthand indication of the effect of ONE economic variable on ANOTHER, provided all other variables remain the same.

 The founder of Welfare economics was Alfred Marshall

Arthur Cecil Pigou succeeded PROF. Marshall as the PROFESSOR of Economics at the University of Cambridge. After Marshall, he became the LEADING neo classical economist. He is the founder of “Welfare Economics” His leading ideas on welfare economics are FOUND in his “Economics of Welfare” (1920).

 Negative

If the goods are complementary like CAR and petrol, their cross ELASTICITY is Negative. A negative cross elasticity denotes TWO products that are complements, while a positive cross elasticity denotes two substitute products.

 Same satisfaction

An indifference curve slopes down TOWARDS right SINCE more of one COMMODITY and LESS of another RESULT in Same satisfaction.

 FALLS when LMCLAC

 No close SUBSTITUTE

No close substitute is a CONDITION for EXISTENCE of monopoly. If a close substitute EXISTS, then the monopoly cannot exist. Remember, a monopoly can only exist when the cross-elasticity of the product that the monopolist PRODUCES is zero.

 TOTAL utility

The total area under the demand curve of good measures total utility. The demand curve itself shows the utility each consumer will GET from BUYING the good, and the PRICE PAID is the cost for getting that utility.

 All of the above are correct

When a MARKET is in equilibrium No SHORTAGE exists, Quantity DEMANDED EQUALS quantity supplied and A price is ESTABLISHED that clears the market.

 Quasi-rent

A FACTOR of production, whose supply is fixed in the short run, MAY get additional EARNINGS. These earnings are generally referred to as Quasi-rent. The earnings from MACHINES and instruments are termed as quasi-rent. The quasi-rent refers to the income produced when the demand for products increases suddenly.

 Marginal utility

The 'Diamond WATER' controversy is explained by marginal utility. Marginal utility is the additional satisfaction or gain someone gets from USING or purchasing an additional unit of a particular good or service. People are willing to pay a higher price for goods with greater marginal utility.
So, let's go back to water and DIAMONDS. There is plenty of water in most parts of the world (not scarce), which means that, as consumers, we USUALLY have a low marginal utility for water. In a typical situation, we aren't willing to pay a lot of money for one more drink of water. Diamonds, however, are scarce. Because they are harder to find and attain, our marginal utility (additional satisfaction), for adding a diamond to our collection is much higher than someone offering us one more drink of water. If one is dying of thirst, then this paradox might not make sense, and the marginal utility from another drink of water would be much higher than the additional satisfaction of owning a diamond.

 AFC + AVC = ATC

AFC + AVC = ATC is TRUE.

 Increase

If the DEMAND for a GOOD is inelastic, an increase in its price will CAUSE the total expenditure of the CONSUMERS of the good to increase. Raising prices will always cause total revenue to increase.

 More elastic

The UPPER portion of the kinked demand curve is relatively more elastic. The kinked-demand curve is a demand curve comprised of two segments, ONE that is relatively more elastic, which results if a FIRM increases its price, and the other that is relatively less elastic, which results if a firm DECREASES its price. These two segments are JOINED at a corner or "kink."

 Capital goods

Larger production of Capital goods goods would lead to higher production in future. If investment in capital good INCREASES ,in turn it further increases the production of consumer goods in the long run. So, if an economy is investing more in capital goods, it SHOWS SIGNS of GROWTH in NEAR future, an increase in GDP.

 Perfect competition

Under Perfect competition forms of market structure does a firm have no control over the price of its product. All goods in a perfectly COMPETITIVE market are considered perfect SUBSTITUTES, and the demand CURVE is perfectly elastic for each of the small, individual FIRMS that participate in the market. These firms are price takers–if one firm tries to raise its price, there WOULD be no demand for that firm's product

 Collecting and COMPILATION of statistical INFORMATION relating to banking & other financial SECTOR

Collecting and compilation of statistical information relating to banking & other financial sector is a function of the Reserve Bank of India.

 MC = AC

When MC = AC, we know that the firms MUST be producing at the MINIMUM point of the average cost curve and so there will be PRODUCTIVE efficiency.

 MONOPOLY

Marginal revenue is always less than price at all LEVELS of output in Monopoly. A monopolist's marginal revenue is always less than or equal to the price of the good. Marginal revenue is the amount of revenue the firm RECEIVES for each ADDITIONAL unit of output.

 AR curve lies above the MR curve

In monopoly, the relationship between AVERAGE and marginal revenue curves is that AR curve lies above the MR curve.

 Positive income elasticity

Normal goods have Positive income elasticity. A positive income elasticity of DEMAND is associated with normal goods; an increase in income will LEAD to a rise in demand. If income elasticity of demand of a commodity is less than 1, it is a NECESSITY good. If the elasticity of demand is GREATER than 1, it is a luxury good or a superior good.

 Coke and 7-Up will decrease

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.

 Both demand and SUPPLY

PRICE of a product is determined in a free MARKET by both demand and supply. In microeconomics, supply and demand is an ECONOMIC model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good, or other traded item such as labor or LIQUID financial assets, will vary until it settles at a point where the quantity demanded (at the current price) will equal the quantity supplied (at the current price), resulting in an economic equilibrium for price and quantity transacted.

 Maximum

When MARGINAL Utility is zero, Total Utility is maximum. It is based in the law of diminishing marginal utility which says 'as more and more units of a good are CONSUMED, MU i.e level of satisfaction derived from each SUCCESSIVE unit goes on FALLING because desire for that commodity TEND to fall.

 Liquidity preference

According to Keynes, interest is a PAYMENT for Liquidity preference. The Liquidity Preference Theory says that the DEMAND for MONEY is not to borrow money but the desire to remain LIQUID. In other WORDS, the interest rate is the 'price' for money.

 Increase CRR and increase Bank rate

In ORDER to control credit, Reserve Bank of India should Increase CRR and increase Bank rate. During high INFLATION in the economy, RBI RAISES the CRR to LOWER the bank's loanable FUNDS.

 Monopolistic competition

A market structure in which many firms sell PRODUCTS that are similar but not identical is KNOWN as Monopolistic competition. Monopolistic competition characterizes an industry in which many firms offer products or services that are similar, but not perfect substitutes. Barriers to entry and exit in a monopolistic COMPETITIVE industry are low, and the decisions of any ONE FIRM do not directly affect those of its competitors.

 Quantity demanded to a change in income

Income Elasticity of DEMAND (YED) is DEFINED as the RESPONSIVENESS of demand when a consumer's income changes. It is defined as the RATIO of the change in quantity demand over the change in income. The HIGHER the income elasticity, the more sensitive demand for a good is to changes in income.

 Small than one

The coefficient of price-elasticity of demand is SMALLER than one when the percentage INCREASE in the QUANTITY of a commodity DEMANDED is smaller than the percentage fall in its price.

 Capital, labour and natural resources

The THREE BROAD types of PRODUCTIVE resources are Capital, labour and natural resources.