According to Smith, by value we mean the value with respect to use, and the price we mean the value with respect to:
Production
Consumption
Exchange
Formation
Correct Answer :
C. Exchange
Related Questions
Total Utility (TU) curve:
Always rises
Always falls
First falls and then rises
First rises and then falls
From the resource allocation view point, perfect competition is preferable because:
The firms operate at excess capacity levels
There is a whole variety of output produced
There is no restriction on entry and exit of firms
There is no idle capacity
Equilibrium of a firm represents maximization of profits as well as:
Maximization of losses
Minimization of losses
Minimization of profits
None of the above
The slutsky demand curve includes:
Income effect
Price effect
Substitution effect
None of the above
If X and Y are close substitutes, a rise in the price of X will lead to:
Increase in demand for Y
Decrease in demand for Y
Decrease in demand for both X and Y
No change in demand for Y
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
For monopolistic competitive firm:
P=AR and P>MR
P
P=MC and MC=AC
None of the above
Total fixed costs are:
In Revealed Preference Theory, Samuelson proves P.E = S.E + I.E :
With using indifference curves
With using MRS
Without using indifference curve
None of the above
In real life, brand loyalty is a barrier to:
Enter the new firms
Exit the new firms
Both a and b
None of the above
When price increases and with it the total outlay on a commodity also increases, it is a case of:
Perfect elasticity (infinitely elastic)
Relative elasticity (greater than one elasticity)
Perfect inelasticity (zero elasticity)
Relative inelasticity (less than one elasticity)
Cross-elasticity of demand or cross-price elasticity between two independent goods will be:
Negative
Positive
Infinite
Zero
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
Elasticity of Substitution (s) is defined as:
Percentage change in capital-labor ratio dividing by percentage change in 
Percentage change in dividing by percentage change in capital-labor ratio
Percentage change in inputs dividing by percentage change in outputs
None of the above
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
Utility is:
A subjective concept
An ethical concept
An objective concept
A historical concept
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
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 context of oligopoly, the kinky demand curve (kinked demand curve) hypothesis is designed to explain:
Price and output determination
Price rigidity (price stickness)
Price leadership
Collusion among rivals
Economic problems arise because:
Wants are unlimited
Resources are scarce
Scarce resources have alternative uses
All of the above
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
Time Preference Theory of Interest was presented by:
Adam Smith
Carl Menger
Ruskin
J.B.Say
Neutral Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
The general markets results from the imposition of price ceilings has been:
Higher prices
Increased prices
Increased consumption
Shortage of products
In monopoly, the relationship between average revenue and marginal revenue curves is as follows:
Average revenue curve lies above the marginal revenue curve
Average revenue curve coincides with the marginal revenue curve
Average revenue curve lies below the marginal revenue curve
Average revenue curve is parallel to the marginal revenue curve
The average cost curve is a geometrical illustration of:
Hydraulic function
Cubic function
Pentagonic function
Quadratic function
Economies of large-scale production:
Lead to greater specialization
Offsets the effects of the law the law of comparative advantage
Lead to greater diversification of individual production
Cause firms to use more capital and less labor
When SAC curve rises, SMC curve lies its:
Below
Above
Equal level
None of the above
Each firm in cournot model assumes that its competitor will:
change its output
not change its output
change its price
not change its price
Income-demand curve shows:
Income-expenditure relationship
Income-cost relationship
Income-price relationship
Income-quantity relationship