List of top Microeconomics Questions on Theory of the firm asked in GATE XH-C1

Which of the following statements is/are TRUE ?

Consider a Cobb-Douglas utility function given as U(H) = (24 - H)^1-a (wH)^a, where H is the number of hours spent working per day, and w is the wage rate per hour. If \(a=\frac{1}{2}\) then the corresponding labour supply (in hours) is _______( in integer).

Suppose XYZ Corp. is totally financed by equity; it is earning Rs. 2.50 per share; its capitalization rate is 20%. There are 10,000 shares outstanding, and the replacement cost of the firm's real assets is Rs. 1,25,000. XYZ Corp.'s value of Tobin's q is _______ (in integer).

An industry comprising only two firms produces a homogenous product where the market demand function is given by P = 200 – 2(q₁ +q₂) where q₁ and q₂ are the output levels of firm 1 and firm 2, respectively. The individual firm's cost functions are TC₁ = 4q₁ and TC₂ = 4q₂, where TC₁ and TC₂ are total costs of firm 1 and 2, respectively. If firm 2 is a Stackelberg Leader, and firm 1 is a Follower, then the profit of the Stackelberg Leader will be ________ (rounded off to two decimal places).

Consider an industry with six firms. An analyst collated the data for this industry as given below. The Herfindahl-Hirschman Index (HHI) for this industry will be ________ (in integer).

Firm	Market Share
F1	30%
F2	20%
F3	15%
F4	15%
F5	10%
F6	10%