Airlines that try to lower fares in order to increase revenues believe that demand for airline services is:
Price elastic
Price inelastic
Income elastic
Income inelastic
Correct Answer :
A. Price elastic
Related Questions
Marginal cost is always:
Less than the average cost
More than the average cost
Equal to the average cost at minimum point
Never equal to the average cost
Total fixed costs are:
The law of demand is most directly a result of:
The law of comparative advantage
The law of diminishing returns
The principle of substitution
Economics of large scale production
One common definition of a luxury good is a good with income elasticity:
Greater than one
Equal to one
Less than one but more than zero
None of the above
Which one of the following has been the most influential work of F.H.Knight?
Freedom and Reform
The Green Revolution
Economic Integration
Risk ,Uncertainty and Profit
Along an isoquant, output remains same, and capital labor ratio:
Is also same
Is different
Is constant
Is zero
In the case of a giffen good, the income effect:
Is equal to the substitution effect
More than offsets the substitution effect
Reinforces the substitution effect
Only partially offsets the substitution effect
If there are many producers, each of whom has an individual production possibility curve, then the lowest marginal cost producer of good X is the producer:
Who must sacrifice fewer units of every other goods than any other producer
Who can produce more X per hour than any other producer
Who must sacrifice more units of every other goods than any other producer
None of the above
Under monopoly and imperfect competition MC is:
More than the price
Less than the price
Equal to the price
Less than or equal to the price
The low cost price leader will charge:
higher prices
zero prices
lower prices
specific prices
Who is the author of Choice of Technique?
K.N.Raj
Amartiya Sen
A.C.Pigou
Alfred Marshal
The Tit for Tat strategy means cooperation by the 2nd firm if:
1st firm does not cooperate
1st firm cooperates
1st firm collapses
None of the above
If the price of product increases and in the result the demand for product B also increases then:
A and B are substitute goods
A and B are complementary goods
A is inferior to B
A is superior to B
The long run average cost curve is:
Cup-shaped
Oval-shaped
Saucer-shaped
Glass-shaped
All of the following are capital resources except:
Warehouses
Buildings
Dams
Share of stock
The Cambridge School of Thought refers to the group of English economists who came under the influence of:
Alfred Marshal
J.M.Keynes
Paul A.Samuelson
A.C.Pigou
The relationship between MC and MP shown by the marginal cost concept is:
Inverse
Direct
Negative
Positive
The indirect utility function is a homogeneous function of:
degree one
degree zero
degree less than one
degree greater than one
For a commodity giving large consumers surplus, the demand will be:
Less elastic
More elastic
Unit elastic
Zero elastic
Other things remaining the same, when a consumers income increases his equilibrium point moves to:
A lower indifference curve
A lower PPC curve
Remains on same indifference curve
A higher indifference curve
Under which of the following forms of the market structure does a firm have no control over the price of its product?
Monopoly
Monopolistic competition
Oligopoly
Perfect competition
Which of the following is not a U shaped curve:
Marginal cost curve
Average variable cost curve
Fixed cost curve
Average cost curve
The marginal revenue of a perfectly competitive firm is:
Equal to the prices of its products
Positively related to output
Negatively related to output
Always higher than marginal cost
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
Who wrote An Introduction to Positive Economics?
R.G.Lipsey
Paul.A.Samuelson
E.D.Domar
J.M.Keynes
Demand of a commodity is elastic when:
Change in its price causes a proportionately greater change in its quantity demanded
Change in its price does not change its quantity demanded
Change in consumers income causes change in demand
None of the above
The proportional demand curve in monopolistic competition (also in kinked demand curve model), is like industry demand curve in:
Monopolistic competition
Imperfect competition
Monopoly
Perfect competition
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
A decrease in demand lowers the price the most:
In the immediate run
In the short run
When the supply is perfectly elastic
When producers have sufficient time to fully adjust to the demand change
Quantity demanded or supplied is measured in:
Monetary units
Physical units
Relative units
Constant units