UGC NET Economics || Economics

The following are the two statements regarding the concept of profit. Indicate the correct code of the statements being correct or incorrect.

Statement (I): Accounting profit is a surplus of total revenue over and above all paid-out costs, including both manufacturing and overhead expenses.

Statement (II): Economic or pure profit is a residual left after all contractual costs have been met, including the transfer costs of management, insurable risks, depreciation and payments to shareholders sufficient to maintain investment at its current level.

A firm that produces highly substitute goods can adopt which one of the following pricing strategies?

Select the correct code of the following statements being correct or incorrect.

Statement (I): The ‘law of one price’ states that in competitive markets free of transportation costs and barriers to trade, identical products sold in different countries must sell for the same price when their price is expressed in terms of the same currency.

Statement (II): An ‘Efficient market’ has no impediments to the free flow of goods and services, such as trade barriers.

Assertion (A): At times, a business may face a situation where it has to shut down its operations.

Reason (R): If the revenue is less than its variable cost, the operation should be closed down.

In the context of the above two statements, which one of the following codes is correct?

Consumer behaviour does NOT consist of which of the following activities?