Contraction in demand occurs when:
Price increases and demand decreases
Price increases but demand also increases
Price remains constant but demand falls down
Price falls down but demand remains constant
Correct Answer :
A. Price increases and demand decreases
Related Questions
The relationship between price effect, income effect and substitution effect is:
P.E = S.E + I.E
S.E = P.E +I.E
I.E = P.E +S.E
S.E = P.E +2I.E
Each firm in cournot model can:
not ignor the activities of the rival
ignor the activities of the rival
both a and b
none of the above
When price decreases and with it the total outlay on a commodity also decreases, 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)
If a firm produces zero output in the short period then which statement is true?
Its total cost will be zero
Its variable cost will be positive
Its fixed cost will be positive
Its average cost will be zero
The number of sellers in duopoly is:
A few
Four
Two
Very large
Who first formulated the Marginal Productivity Theory of Distribution?
J.B.Clark
L.Euler
J.A.Schumpeter
Alfred Marshal
A monopoly producer usually earns:
Abnormal profits
Only normal profits
Neither profits nor losses
Profits and losses which are uncertain
The coefficient of the price elasticity of demand is computed as the absolute value of the percentage change in quantity demanded divided by:
The change in price
The change in supply
The percentage change in supply
The percentage change in price
In Edgeworth model, if price falls below competitive price, the demand is:
More than maximum output
More than minimum output
Less than maximum output
Less than minimum output
Market allocation fundamentally relies upon:
A system of relative prices
A belief that employees work for the good of society
Government ownership of the means of production
Moral incentives to encourage productive efficiency
Technological Progress (Invention) can be defined as:
Technological progress shifts the production function by allowing the firm to achieve more output from a given combination of inputs (or the same output with fewer inputs)
Technological progress shifts the production function by allowing the firm to achieve less output from a given combination of inputs (or the same output with more inputs)
Technological progress shifts the import function to the right
None of the above
In the modern theory of costs, the level of production which the firm considers feasible is known as:
Input factor
Heavy factor
Output factor
Load factor
The Chamberline model recognizes mutual:
Independence of firms
Interdependence of firms
Independence of individuals
Interdependence of materials
The demand curve of ostentation goods (Veblen goods) will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
Income-demand curve shows:
Income-expenditure relationship
Income-cost relationship
Income-price relationship
Income-quantity relationship
General equilibrium is concerned with simultaneous equilibrium of:
Few economic agents
All the economic agents
Two economic agents
Many economic agents
If the commodity is inferior then Income Effect (I.E) is:
Negative
Positive
Zero
Infinite
In which case the elasticity shown by the different points of a curve is the same?
A straight line curve
A downward sloping demand curve
A rectangular hyperbola demand curve
None of the above
When there is decrease in demand the demand curve:
Moves (shifts) towards the axis
Moves (shifts) away from the axis
Remains unchanged
All of the above
Each firm in cournot model starts selling:
1/2 of the total market demand
1/4 of the total market demand
1/3 of the total market demand
None of the above
Utility is:
A subjective concept
An ethical concept
An objective concept
A historical concept
The number of sellers in oligopoly are:
Two
Many
Four
Very few
Contraction of demand means:
Less quantity demanded at the same price
Less quantity demanded at a higher price
Less quantity demanded at a lower price
None of the above
The situation of single buyer and single seller is called:
Monopoly
Multi-plant monopolist
Bilateral monopoly
Price discrimination
Even in the long-run equilibrium, the pure monopolist can make abnormal profits because of:
Advertising
His low LAC
Blocked entry
High price he charges
The maximization of output subject to cost requires equilibrium at the:
Lowest isoquant
Lowest isocost line
Highest isoquant
Highest isocost line
Production indifference curve (isoquant) is a curve which shows:
Equal level of output
Unequal level of outputs
Equal level of inputs
Unequal level of inputs
If a commodity sold under monopoly is got free of cost, then MC will be:
Zero
Identical with the MR
A horizontal straight line
Infinite
Profits of a firm will be calculated taking into account the units produced and the difference between:
Real cost and money cost
Variable cost and fixed cost
Average cost and average revenue
Marginal cost and average cost
The Law of Proportionality is another name of:
The law of diminishing marginal utility
The law of demand
The Law of Diminishing Returns
The law of supply