A country is advised to devalue (reduce external value of) its currency only when its exports face:
Inelastic demand in foreign markets
Elastic demand in foreign markets
Unit elastic demand in foreign markets
None of the above
Correct Answer :
B. Elastic demand in foreign markets
Related Questions
The total utility (TU) curve is:
Concave to X-axis
Convex to X-axis
Concave to Y-axis
Convex to Y-axis
In cournot model, during the process of adjustment, the number of firms:
Donot change
Change
Both a and b
None of the above
The low cost price leader will charge:
higher prices
zero prices
lower prices
specific prices
An effective price ceiling usually results in:
Excess demand
Qd > Qs
Shortage of supply
All of the above
In the real world, some competitive firms owns specialized resources that earn a return called:
Economic profit
Rent
Accounting profit
Normal profit
The economic problem of determining the combination of inputs yielding lowest cost for producing a given output:
Is only a choice among the technologically efficient combination
Depends on the relative price of inputs
Depends on the price of the product
Depends on the profits made
The ordinal approach was presented by:
Marshal
J.R.Hicks
Adam smith
Rostow
On all points of budget (price) line:
Total expenditures increases
Total expenditures decreases
Total expenditures are zero
Total expenditures remain same
If the demand curve is inelastic then:
It may be nearly vertical
Quantity demanded is very sensitive to income
Demand is hardly affected by income
Close substitutes for the good are abundant
The law of Diminishing Marginal Utility implies that the marginal utility of a good decreases as:
It gets more expensive
A household consumes more of it
Preference changes
A households income goes up
According to Marshallian approach, utility:
Can be added
Can be subtracted
Can be multiplied
Can be divided
The main contribution of Adam Smith is in the field of:
Economics of state
Wealth of Nations
Value and price
Theory of demand
In sweezy model (kinked demand curve model), the role of MC curve:
Can be ignored
Cannot be ignored
Partially be ignored
None of the above
In economic term water is a:
Free good
Economic good
Both of the above
None of the above
Rational economic behavior on the part of the consumer means that he will:
Save as much of his income as possible
Spend as much of his income as possible
Buy everything at the lowest possible price
Make wise choices among available economic goods
In the case of two factor inputs which are neither perfectly complementary nor perfect substitutes, the iso-product curve will be:
A downward sloping straight line
A downward sloping curve
An upward rising curve
Right angled iso-quants
According to the principle of substitution?
Many goods have no effective substitutes
Nearly all goods have substitutes
The prices of substitute goods must be the same
Buyers will stop buying a good if its price rises
The vertical distance between TVC and TC is equal to:
MC
AVC
TFC
AC
As the price of diamond is higher, so it has:
Higher marginal valuation for consumer
Lower marginal cost for producer
Higher marginal cost for producer
Both (a) and (c)
According to M.Kalecki, the true measure of the degree of monopoly power is the:
Ratio between price and marginal cost
Extent of monopolistic profit enjoyed by him
Cross-elasticity of demand for the product of the monopolist
Price charged by the monopolist minus marginal cost of production
The concept of product differentiation was firstly introduced by:
Smith
Kaldor
Sraffa
Marshal
The game theory was basically presented by:
Ricardo
Marshal
Neomann and Morgenstern
Karl Marx
Money spent by a firm on the purchase of capital equipment is:
Fixed cost
Variable cost
Both fixed and variable costs
None of the above
With firms having cost differences under perfect competition, a firm, which earns normal profit in the long-run is called:
An optimum firm
A representative firm
An oxford firm
A marginal firm
Price elasticity of demand can be measured in the following way:
Percentage change in quantity demanded of a commodity divided by percentage change in price of that commodity
Change in quantity demanded of a commodity divided by change in price of that commodity
Percentage change in price of a commodity divided by percentage change in quantity demanded of that commodity
None of that commodity
To calculate the Economic Profit we must deduct which of the following cost from our total revenues?
Opportunity cost
Direct cost
Rent cost
Wage cost
In economics, Externality means:
An externality is a cost or benefit which is not transmitted through prices
An externality is a cost or benefit which is transmitted through prices
An externality is a production received through external resources
None of the above
Formulation of an economic theory involves:
Statements of various assumptions or postulates
Logical deductions from the assumptions made
Testing the hypothesis against empirical evidence
All of the above
The game theory concentrates on:
Gaming
Strategic decisions
Both a and b
None of the above
Which describes a competitive market?
Many buyers and many sellers
One seller, many buyers
One buyer, many sellers
Few sellers, many buyers