Economy

Correct answer: A

I is incorrect: Cartel → Agreement among producers to restrict competition. Members may coordinate output or prices. II is incorrect: Price discrimination → Different prices for similar units not explained by cost differences. The seller separates buyers or markets.

Correct answer: C

An individual firm has negligible influence on market price.

Correct answer: B

I is incorrect: Economies of scale → Long-run average cost falls as scale expands. Specialisation and spreading some costs can lower unit cost. II is incorrect: Physical capital → Produced assets used in further production. Machinery is a typical example.

Correct answer: D

The seller separates buyers or markets.

Correct answer: C

I is incorrect: Entrepreneurship → Organising resources and bearing business uncertainty. Entrepreneurs coordinate production decisions. II is incorrect: Monopsony → A market with one buyer. Buyer concentration is the defining feature.

Correct answer: A

I is correct: Diminishing marginal returns → Extra output from a variable input eventually declines. The result assumes other inputs are fixed. II is incorrect: Perfect competition → Many price-taking sellers offering a homogeneous product. An individual firm has negligible influence on market price.

Correct answer: B

Rent can remain payable even when production stops.

Correct answer: C

I is correct: Entrepreneurship → Organising resources and bearing business uncertainty. Entrepreneurs coordinate production decisions. II is incorrect: Variable cost → Changes with production volume. Materials used generally rise with output.

Correct answer: A

Machinery is a typical example.

Correct answer: D

I is correct: Perfect competition → Many price-taking sellers offering a homogeneous product. An individual firm has negligible influence on market price. II is incorrect: Monopsony → A market with one buyer. Buyer concentration is the defining feature.

Correct answer: B

I is incorrect: Fixed cost → Does not vary with output in the relevant short run. Rent can remain payable even when production stops. II is incorrect: Cartel → Agreement among producers to restrict competition. Members may coordinate output or prices.

Correct answer: A

Specialisation and spreading some costs can lower unit cost.

Correct answer: C

I is correct: Marginal cost → Extra cost of one additional unit. It is the change in total cost divided by change in output. II is incorrect: Monopolistic competition → Many sellers with differentiated products. Brand or quality differences give limited pricing power.

Correct answer: B

Entrepreneurs coordinate production decisions.

Correct answer: D

I is correct: Fixed cost → Does not vary with output in the relevant short run. Rent can remain payable even when production stops. II is incorrect: Price discrimination → Different prices for similar units not explained by cost differences. The seller separates buyers or markets.

Correct answer: C

Members may coordinate output or prices.

Correct answer: A

I is incorrect: Human capital → Productive skills and capabilities embodied in people. Education and training can improve it. II is incorrect: Perfect competition → Many price-taking sellers offering a homogeneous product. An individual firm has negligible influence on market price.

Correct answer: D

It is the change in total cost divided by change in output.

Correct answer: B

I is incorrect: Economies of scale → Long-run average cost falls as scale expands. Specialisation and spreading some costs can lower unit cost. II is incorrect: Monopolistic competition → Many sellers with differentiated products. Brand or quality differences give limited pricing power.

Correct answer: C

I is correct: Marginal cost → Extra cost of one additional unit. It is the change in total cost divided by change in output. II is incorrect: Average cost → Total cost per unit of output. It equals total cost divided by quantity.

Correct answer: A

Buyer concentration is the defining feature.

Correct answer: A

I is incorrect: Monopsony → A market with one buyer. Buyer concentration is the defining feature. II is incorrect: Physical capital → Produced assets used in further production. Machinery is a typical example.

Correct answer: B

Materials used generally rise with output.

Correct answer: D

I is correct: Diminishing marginal returns → Extra output from a variable input eventually declines. The result assumes other inputs are fixed. II is incorrect: Variable cost → Changes with production volume. Materials used generally rise with output.

Correct answer: C

I is incorrect: Fixed cost → Does not vary with output in the relevant short run. Rent can remain payable even when production stops. II is incorrect: Entrepreneurship → Organising resources and bearing business uncertainty. Entrepreneurs coordinate production decisions.