A market-clearing price:
Is a disequilibrium price
Is an equilibrium price
Means a shortage exists as a market is cleared
Must be set by the government
Correct Answer :
B. Is an equilibrium price
A market-clearing price is the price of goods or a service at which quantity supplied is equal to quantity demanded. It is also called equilibrium price.}
Related Questions
When elasticity of demand is greater than one (e >1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
The modern cost curves are based upon the idea of:
Fixed capacity
Specific capacity
Excess capacity
Reserve capacity
Economics define technology as:
Societys knowledge of production
Applied science
Knowledge of science and mathematics
None of the above
By scarcity the economist means that all goods are scarce relative the peoples:
Desire for them
Purchases
Production
Consumption
We can obtain consumers demand curve from:
Income Consumption Curve (ICC)
Engels Curve
Price Consumption Curve (PCC)
Production Possibility Curve (PPC)
The general form of Cobb-Douglas production function is:
The ordinary demand curve is also called:
Marshallian demand curve
Hicksian demand curve
Slutsky demand curve
All the above
An optimum level of a firms output is:
Where marginal cost is minimum
Where average cost is minimum
Where both the marginal and the average cost curves are at their respective minimum
Where the firm earns the maximum profits
Least cost combination of two factor inputs is achieved at a point where:
Budget line cuts the isoquant
Budget line is below the isoquant
Budget line is tangent with isoquant
None of the above
If less is demanded at the same price or same quantity demanded at a lower price, it is a case of:
Contraction of demand
Decrease in demand
Increase in demand
Extension of demand
At a point above the middle of a straight line demand curve, elasticity of demand is:
Less than one
Equal to one
More than one
Equal to infinite
The price under perfect competition is settled by:
Producers
Sellers
Buyers
Sellers and buyers
Revealed Preference Theory was presented by:
Ricardo
Adam Smith
Pigou
Samuelson
Marginal cost curve cuts the average cost curve:
At the left of its lowest point
At its lowest point
At the right of its lowest point
None of the above
At the point where the straight line from the origin is tangent to the TC curve, AC is:
Maximum
Minimum
Equal
Lower
Income distribution effects:
The price of complements
The price of substitutes
The market demand for commodities
The individuals scale of performances
In respect of which of the following category of goods is consumers surplus highest?
Giffen goods
Necessities
Luxuries
Prestige goods
The elasticity of demand is equal to slope of demand function divided by:
Average demand function
Qualified demand function
Constructive demand function
Relative demand function
If the commodity is inferior then the Income Effect (I.E) and the Substitution Effect (S.E):
Both move together and reinforce each other
One moves and the other remains constant
Move in the opposite direction and neutralize each other
Both remain constant
The number of sellers in duopoly is:
A few
Four
Two
Very large
Human wants are:
Thousands
Few
Innumerable
Hundreds
The addition or increment to the total cost involvesd in expanding or contracting output by one unit is called:
Fixed cost per unit
Variable cost per unit
Total cost per unit
Marginal cost
A significant property of the Cobb-Douglas production function is that the elasticity of substitution between inputs is:
Greater than one
Less than one
Zero
Equal to one
A maximin strategy:
Maximizes the minimum gain that can be earned
Maximizes the gain of one player, but minimizes the gain of the opponent
Minimizes the maximum gain that can be earned
None of the above
The Latin term citeris paribus means:
Other things being equal
Because of this
Due to this
All the factors changes at the same rate
To get more revenue, a Finance Minister impose tax on that commodity which has:
Inelastic demand
Elastic demand
Unit elasticity
Zero elasticity
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
An inferior commodity is one whose quantity demand decreases when income of the consumer:
Decreases
Increases
Remains constant
Zero
Change in demand refers to:
Movement on the same demand curve
Upward shift of the demand curve
Downward shift of the demand curve
Upward or downward shift of the demand curve
The relationship between MC and MP shown by the marginal cost concept is:
Inverse
Direct
Negative
Positive