UGC NET QUESTION PAPER 3 (DECEMBER) 2012
1. A demand curve, which is parallel to the horizontal axis, showing quantity, has the price elasticity equal to (A) Zero (B) Infinity (C) Less than one (D) One Answer: (B) 2. Although a monopolist can charge any price he likes, but does not charge a higher price than his equilibrium price because (A) higher price means fall in total revenue. (B) higher price can be charged only on that segment of firm’s demand curve which is price inelastic implying that the marginal revenue will be negative. (C) it is inconsistent with profit maximization goal under monopoly. (D) marginal cost will be negative over the relevant range of output. Answer: (A) 3. Which of the following conditions specify the least cost-output combination? (A) PL/Pk = MRTS (B) PL/Pk = MPL/MPk (C) MPk/MPL = dL/dK (D) All the above Answer: (D) 4. Which of the following is not relevant in case of Sweezy’s oligopoly model? (A) A price cut by a firm is followed by the price cut by t