A vertical supply curve parallel to the price axis implies that the elasticity of supply is:
Zero
Infinite
Equal to one
Greater than zero but less than infinite
Correct Answer :
A. Zero
Related Questions
Marginal revenue from a given output:
The price at which the marginal unit sells
Total revenue sale of all units divided by volume of sales
Average revenue of total output average revenue of last unit
The change in total revenue resulting from the sale of one unit more of output
A demand curve which is horizontal and parallel to x-axis represents:
Infinitely elastic demand
Infinitely inelastic demand
Relatively elastic demand
Relatively inelastic demand
AR curve under perfect competition:
Slopes downwards to the right
Slopes upward to the right
Is vertical to the x-axis
Is horizontal to the x-axis
Chamberline introduces the concept of:
V-shaped selling cost
U-shaped selling cost
V-shaped purchasing material
U-shaped purchasing material
The maximization of output subject to cost requires equilibrium at the:
Lowest isoquant
Lowest isocost line
Highest isoquant
Highest isocost line
Inputs or Factors of production are defined as:
Productive resources such as labor and capital equipment that firms use to manufacture goods and services are called inputs or factors of production
Unproductive resources that do not take part in production process are called inputs or factors of production
Firms own resources are called inputs or factors of production
None of the above
The elasticity of substitution measures the percentage change in the ratio of inputs when any producer observes the percentage change in:
Output cost
Output ratio
Input prices
Input ratio
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 advantage of using indifference curves rather than marginal utilities is:
We do not need to attach util values to consumption
Consumers can attain higher utility
It takes into account how much income the household has
We can determine how much of one good the consumer is willing to sacrifice in order to consume one more unit of another
If cross-elasticity of one commodity for another turns out to be zero, it means they are:
Close substitutes
Good complements
Completely unrelated (independent goods)
None of the above
If the commodity is normal 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
Loanable funds theory of Interest was developed by:
Wicksell
Robert San
Ruskin
J.B.Say
A budget line shows:
Quantities of commodity X which a consumer could buy with no amount of Y
Quantities of commodity Y which a consumer could buy with no amount of X
The different combinations of X and Y that the consumer could buy
All of the above
When total product falls:
MP is positive
MP is negative
MP is falling
MP is rising
In general, most of the production functions measure:
The productivity of factors of production
The relation between the factors of production
The economies of scale
The relations between change in physical inputs and physical output
In first degree price discrimination, monopolist takes away :
All of the consumer surplus
All of the producer surplus
Some part of the consumer surplus
None of them
The alternative of profit maximization theory is:
Cost maximization
Product maximization
Revenue maximization
None of the above
Which is the first-order condition for the profit of a firm to be maximum?
AC=MR
MC=MR
MR=AR
AC=AR
The point where the supply and demand curves intersect on a graph determines:
Market price
Equilibrium price
Long-term price
Short-term price
Who is the author of the famous work Asian Drama: An Enquiry intro the Causes of Poverty of Nations?
Irving Fisher
J.B.Clark
J.M.Keynes
Gunnar Myrdal
The firm is at equilibrium where:
Output is maximum
Profit is maximum
Revenues are maximum
Profit is minimum
The short run cost curve is U shaped because of:
The operation of increasing cost
The existence of fixed cost
The existence of variable cost
All of the above
The marshallian indirect utility function in the form of equation is:
x =a-bp
x =b-ap
x = f(P)
Supply and demand changes have their most rapid impact in:
Auction market
Contract markets
Market for commercial office space
Natural gas market
The combination of labor and capital where the cost of a given output is minimized is known as:
Least cost factor combination
Optimum factor combination
Both a and b
None of them
Because the price elasticity of demand for OPEC oil is approximately .08, in order to increase revenues OPEC should:
Lower price in order to increase revenues
Lower price in order to decrease the amount of oil sold
Rise price in order to increase the amount of oil sold
Raise price in order to increase revenues
In non-constant sum game (non-zero sum game), if there are two parties then:
Both parties make better-off
Both parties make worse-off
Both parties become Neutral
Both parties can become better off or worse off
Diseconomies of management lead to:
Decreasing returns to scale
Constant returns to scale
Increasing returns to scale
maximum returns to scale
Extension (expansion) of demand means:
More quantity demanded at a lower price
More quantity demanded at a higher price
More quantity demanded at the same price
None of the above
The study of economics just in theoretical way is called:
Positive Economics
Normative Economics
Micro Economics
Development Economics