Page 331 - DECO401_MICROECONOMIC_THEORY_ENGLISH

Microeconomic Theory

Notes
Fig. 20.1

Y
A D
C Rent
B
Profit
NP
T
W W 2
Wages K MP
O X
M N

Self Assessment

Multiple choice questions:
4. For the determination of tax part in national production .................... is used.
(a) maximum theory (b) investment curve
(c) distribution theory (d) none of these
5. Ricardo’s Revenue Distribution theory is mainly based on additional land and ................... .
(a) special theory (b) half theory
(c) theory (d) none of these
6. .................... Found in market.
(a) Perfect Competition (b) Competition
(c) Utility (d) None of these
Ricardo in his theory found that profit is special income that means profit is that which remains after
paid tax, labour cost and interest in total production.
According to Ricardo
Profit
Rate of Profit (Y) = __________

Labour Cost
)
_________

= ( MP – MK 100

×

MR
PM
____

= ( ____ – MK ) × 100

MK
MK
MP

= ( ____ – 1 ) × 100

MK
Self Assessment
State whether the following statements are True/False:
7. Ricardo in his theory found that profit is special income.
8. Demand of labour and supply both are not free from marginal production.
9. The marginal production of labour does not have any influence in demand and supply.
10. Marx was rigid socialist in his time.
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