An increase in the price of the good measured on the horizontal axis causes:
The budget line to get steeper
The budget line to shift parallel to the right
The indifference curve to shift up
The budget line to get flatter
Correct Answer :
A. The budget line to get steeper
Related Questions
The entry of new firms in cournot model is:
Banned
Free
Partially free
Allowed
The number of sellers in oligopoly are:
Two
Many
Four
Very few
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
To attain maximum profits during short-run a firm should produce the output that will:
Yield maximum total revenue
Minimize marginal cost
Maximize marginal cost
Equate marginal revenue with marginal cost
Formulation of an economic theory involves:
Statements of various assumptions or postulates
Logical deductions from the assumptions made
Testing the hypothesis against empirical evidence
All of the above
Law of Substitution in production was presented by:
Classical economists
Keynes
Neo-classical economists
Karl Marx
The law of Diminishing Marginal Utility implies that the marginal utility of a good decreases as:
It gets more expensive
A household consumes more of it
Preference changes
A households income goes up
Duopoly is a market where there are:
Two sellers
A few sellers
Five sellers
Many sellers
All of the following are capital resources except:
Warehouses
Buildings
Dams
Share of stock
Government planners play a central role in allocating resources:
Only under socialism(communism)
Only under capitalism
Under both (a) and (b)
None of the above
The number of sellers in duopoly is:
A few
Four
Two
Very large
In cournot model firms:
Cannot make price adjustments
Can make price adjustments
Can adjust number of customers
None of the above
In the theory of firm, Chamberline presented the idea of:
Rising cost
Falling cost
Rising input
Falling input
In case of income effect, the level of consumers satisfaction rises when:
Income rises
Income falls
Sales rises
Price falls
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
In Revealed Preference Theory, a consumer reveals preference for bundle of:
Two goods
A few goods
One good
Many goods
The minimization of costs subject to output requires equilibrium at the lowest:
Isoquant line
Isocost line
Indifference curve
Price line
Cross-elasticity of demand or cross-price elasticity between two perfect substitutes will be:
Negative
Positive
Infinite
Zero
The difference between the average total cost and average variable cost as output increases will:
Increases
Remains the same
Diminishes
Zero
When the income of consumer increases then budget line will:
Get steeper
Shift parallel to right
To get flatter
To shift upward
On all points of budget (price) line:
Total expenditures increases
Total expenditures decreases
Total expenditures are zero
Total expenditures remain same
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
Indifference curve approach (ordinal approach) is superior to utility approach (cardinal approach) because:
In ordinal approach we can separate the income effect from the substitution effect of a price change
In ordinal approach we can study the consumer behavior more closely
In ordinal approach the consumer is assumed more rational
In ordinal approach the consumer has more income
In case of short-run, the supply curve of an industry is the horizontal summation of:
Marginal cost curves
Average cost curves
Total cost curves
None of the above
Who wrote A Contribution to the Theory of Trade Cycle?
N.Kaldor
J.R.Hicks
A.C.Pigou
J.M.Keynes
Identify the work of Irving Fisher:
Policy on trade
Policy against inflation
The making of index numbers
Labor theory
The slope of isocost line (budget line) shows:
Capital labor ratio
Labor wage ratio
Factor price ratio
Factor labor ratio
On a straight line demand curve, elasticity of demand at the midpoint is:
Equal to zero
Equal to one
Equal to infinity
More than one
When the slope of a demand curve is zero (also known as vertical demand curve) then elasticity will be:
Zero (perfectly inelastic)
Equal to one (unitary elastic)
Infinite (perfectly elastic)
None of the above
Any expansion in output by a firm in the short period will always reduce the:
Average variable cost
Average fixed cost
Both average fixed and variable cost
None of the above