A shift in the demand for a product is likely to result from a change in:
The products price
Expectations
The prices of factors of production used to produced it
Production technology
Correct Answer :
B. Expectations
Option(a) is wrong b/c a change in products price only changes quantity demanded, moving along the same demand curve .It does not shift the demand curve. Option (c) and (d) are also wrong b/c the prices of factors of production and production technology both can shift the supply curve and they can not shift the demand curve. Option (b) is right answer b/c change in expectations about the product may cause the demand curve to shift.}
Related Questions
7.The costs which the firms have to face in order to change the price tags of their products and services are called:
Product costs
Real costs
Menu costs
Nominal costs
Identify the factor, which generally keeps the price elasticity of demand for a commodity low:
Variety of uses for that commodity
Its low price
Close substitutes for that commodity
High proportion of the consumers income spent on it
If the commodities X and Y are perfect complements then:
None of the above
When a competitive firm is in equilibrium in the long-run, its output is such that:
Costs per unit of output are lowest
Total profits are highest
Marginal cost is lowest
Profit per unit of output is zero
Slope of a demand curve is:
Not relevant to elasticity
The only factor determining elasticity
Only one of the factors influencing elasticity
None of the above
An economic model describing the working of an economy consists of:
Functional relationships
Family relationships
Economic position
Stagnant relationships
In non-collusive oligopoly firms enter into:
Secret agreements
No secret agreements
Bad habits
None of the above
If in the long run all factor inputs are increased three times and the resulting output is four times as before, it is a case of:
Decreasing returns to scale
Variable returns to scale
Constant returns to scale
Increasing returns to scale
A firm can never produce in the middle area of input space, in case of:
Concave isoquant
Convex isoquant
Constant isoquant
None of the above
The number of sellers in oligopoly are:
Two
Many
Four
Very few
When the law of demand operates the demand curve:
Slopes downward
Slopes upward
Becomes horizontal
Becomes vertical
The slope of the iso-cost line (budget line) is determined by:
Pricing of two factors
Productivity of the two factors
Degree of substitutability of two factors
None of the above
The optimum level of output in long run takes place where:
LAC = LMC
SAC = LMC
SAC =MC
SAC =LAC
The demand curve slopes downwards due to:
Income effect(I.E)
Substitution effect(S.E)
Taste effect
Both a and b
Excess capacity is concerned with the:
V-shaped traditional cost curves
S-shaped traditional cost curves
Modern cost curves
U-shaped traditional cost curves
The products, under monopolistic competition are differentiated, yet they are:
Complements
Close substitutes
Both a and b
None of the above
Rotten eggs are:
Free goods
Economic goods
Luxury goods
None of the above
According to Diamond Water Paradox diamonds are more expensive than water because:
They yield higher total utility
They yield higher marginal utility
They are more useful
None of the above
If a new production technology for producing compact discs is developed and new firms are attracted to this field:
The supply curve will shift down or right
The supply curve will shift up or left
Both demand and supply curve shifts would occur
None of the above
The giffen paradox is an exception to law of:
Supply
Demand
Production
Consumption
Average Revenue means:
Per unit revenue received from all the units sold by the producer
Revenue of the units having average size
Total number of units× Revenue per unit
Total revenue × Number of units sold
In the long-run competitive equilibrium:
There is tendency for firms to enter but not leave the industry
Firms have no tendency either to enter or to leave the industry
Some firms may enter while the others may leave the market even after the equilibrium of the industry
Entry or exit of the firms cannot be predicted
If the price of a product falls then quantity demanded tends to increase ceteris paribus because:
The MU/P ratio has decreased
Of the income and substitution effects
Consumers tend to feel poorer when prices fall
When price falls the demand curve shifts right
The cost of production is faced by a:
Producer
Consumer
Seller
Firm
For the given production function, technical inefficiency is defined as:
Sets of points relating production function that maximizes output given input (labor) i.e. Q = f(L, K)
Sets of points relating production function that produces less output than possible for a given set of input (labor) i.e. Q < f(L, K)
Use of imported technology
None of the above
In monopoly, new firms:
Can enter and exit
Partially can enter and exit
Cannot enter
None of the above
Classical production function is:
Q = f(L)
U =f(X)
Q =f(K)
Q =f(L,K)
The firm is said to be in equilibrium when the difference between revenue and cost is:
Maximum
Minimum
Zero
One
On the total utility curve the economically relevant range is the portion over which:
The total utility is rising at a declining rate
The total utility is raising at an increasing rate
Total utility is maximum
Total utility is declining
The cobweb model will convergent when the slope of:
Demand curve is more than supply curve
Supply curve is more than demand curve
Supply curve is equal to demand curve
None of the above