An economic theory is :
An axiom
A proposition
A hypothesis
A tested hypothesis
Correct Answer :
D. A tested hypothesis
Related Questions
Of the following, which one corresponds to fixed cost?
Payments for raw materials
Labor cost
Transportation charges
Insurance premium on property
With the decrease in marginal valuation of a specific commodity, the price offered by the people:
Decreases
Increases
Become very high
Remain unchanged
In non-collusive oligopoly firms enter into:
Secret agreements
No secret agreements
Bad habits
None of the above
The budget line is described by each of the following except:
Prices of products are assumed to be fixed
The consumer need not to spend all his income
Consumer income is assumed to be fixed
The slope represents relative prices
Microeconomics is also known as:
Price theory
Demand theory
Supply theory
Income theory
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
Marshallian approach is also known as:
Cardinal approach
Ordinal approach
Consumer approach
Production approach
The Lambda or Langrange Multiplier is a:
Analyst
Catalyst
Pessimist
Optimist
In monopoly:
The producer will often produce a volume that is less than the amount which would maximize the social welfare.
The producer will often produce a volume that is more than the amount which would maximize the social welfare.
The consumers will often consume a volume that is more than the amount which would maximize the social welfare.
None of the above
The competitive equilibrium leads to:
The firms producing with excess capacity
The firms producing at their minimum costs
Firms producing at a cost higher than the minimum
Some firms producing under decreasing costs and others under increasing costs
Increase in demand occurs when:
The price falls and the demand also falls down
The price increases but demand falls down
The price increases the demand remains constant and when the price remains constant the demand goes up
The price remains constant but demand falls
Identify the author of The Principles of political Economy and Taxation:
Alfred Marshal
J.S.Mill
David Ricardo
A.C.Pigou
The monopolist often lead to exploitation of:
Producers
Workers
Managers
Consumers
In the real world, some competitive firms owns specialized resources that earn a return called:
Economic profit
Rent
Accounting profit
Normal profit
The General Theory of Employment, Interest and Money is the major work of :
N.Kaldor
Alfred Marshal
J.M.Keynes
J.S.Duesenberry
Money spent by a firm on the purchase of capital equipment is:
Fixed cost
Variable cost
Both fixed and variable costs
None of the above
MC is given by:
The slope of the TVC curve
The slope of the TVC curve but not the slope of the TC curve
The slope of the TC curve but not by the slope of the TVC curve
Either the slope of the TVC curve or the slope of the TC curve
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
In monopoly, when average revenue curve falls:
MR constant
MR rises
MR falls
MR is zero
Cross-elasticity of demand or cross-price elasticity between two perfect substitutes will be:
Negative
Positive
Infinite
Zero
If as a result of a decrease in price, total outlay (expenditures) on a commodity increases, its price-elasticity of demand is:
Perfectly elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unit elastic
Relatively inelastic (less than one elasticity)
The economic problem of determining the combination of inputs yielding lowest cost for producing a given output:
Is only a choice among the technologically efficient combination
Depends on the relative price of inputs
Depends on the price of the product
Depends on the profits made
In dominant price leadership model, the dominant firm set the:
price
output
both a and b
none of the above
Under monopolistic competition, the products sold by the firms are:
Economic substitutes
Technical substitutes
Both a and b
None of the above
In the case of a normal goods, the income effect:
Is always equal to the substitution effect
Completely offsets the substitution effect
Partially offsets the substitution effect
Reinforces the substitution effect
The least cost combination of factors x , y and z will generally be the point at which:
Price of x = Price of z Price of y Price of x
MP of x = MP of y Price of x Price of x
MP of x = MP of y = MP of z Price of x Price of y Price of z
MP of x = MP of y = MP of z
Each SAC represents a particular level of:
Input
Output
Both of them
None of them
Substitution effect means a consumer
Shifts away from the commodity the price of which has fallen
Shifts in favour of a commodity the price of which has risen
Shifts away from a commodity the price of which has risen, in favour of a commodity the price of which has fallen
None of the above
Indifference curve represents:
Only two commodities
Only three commodities
More than three commodities
Any number of commodities
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