Cross-elasticity of demand is measured as:
Percentage change in the quantity of a commodity demanded divided by the percentage change in the price of that commodity
Percentage change in the quantity of commodity X divided by percentage change in the price of commodity Y
Percentage change in the quantity demanded of commodity X
Percentage change in the quantity demanded of commodity X divided by percentage change in the quantity demanded of commodity Y
Correct Answer :
B. Percentage change in the quantity of commodity X divided by percentage change in the price of commodity Y
Related Questions
In monopolistic competition, if a firm lowers its price, the rival firms will:
Also lower their prices
Increase their prices
Show no reaction
None of the above
If the demand for good is more elastic and government levied a tax per unit of output, the price per unit for the firm would:
Rise by the amount of the tax
Rise by more than the amount of the tax
Rise by less than the amount of the tax
Remain the same
Normally when price per unit of time falls:
Quantity demanded increases
Quantity demanded decreases
Quantity demanded remains constant
Quantity demanded becomes zero
The concept of product differentiation was firstly introduced by:
Smith
Kaldor
Sraffa
Marshal
Consumers are likely to get a variety of similar goods under:
Monopoly
Perfect competition
Duopoly
Monopolistic competition
In the range of excess capacity, the average costs are:
Maximum
Minimum
Equal to one
Equal to zero
The equilibrium level of output for the pure monopolist is where:
MR = MC
MR > MC
MR < MC
P < AC
The total utility (TU) curve is:
Concave to X-axis
Convex to X-axis
Concave to Y-axis
Convex to Y-axis
At the point where the straight line from the origin is tangent to the TC curve, AC is:
Maximum
Minimum
Equal
Lower
Cross-elasticity of demand or cross-price elasticity between two substitutes will be:
Negative
Positive
Infinite
Zero
Under Bandwagon effects, people use those goods which are used by their:
Friends
Relatives
Family
All of them
Change in quantity demanded (expansion and contraction of demand) is:
Due to change in price while other factors remain constant
Due to change in factors other than price
Both a and b
None of the above
The right of individuals to control productive resources is known as:
Monopoly
Private property
Workable competition
Oligopoly
Supply of commodity is a:
A stock concept
A flow concept
Both stock and flow
None of the above
Two policy variables, product and selling activities in the theory of firm was introduced by:
Chamberline
Sraffa
Carl marx
Robinson
If the price of product A decreases and in the result the demand for product B increases then we can say that:
A and B are substitute goods
A and B are complementary goods
A is an inferior good
B is an inferior good
Engel curves shows that:
How commoditys consumption rate differs at various levels of price
How commoditys consumption rate differs at various levels of satisfaction
How commoditys consumption rate differs at various levels of income
How commoditys consumption rate differs at various levels of taxes
Change in demand refers to:
Movement on the same demand curve
Upward shift of the demand curve
Downward shift of the demand curve
Upward or downward shift of the demand curve
If price exceeds AVC but in smaller than AC at the best level of output, the firm is:
Making a profit
Incurring a loss but should continue to produce in the short-run
Incurring a loss and should stop producing immediately
Making a normal profit
The standard form of demand function is:
Q = a- bP
Y = a- bP
Q = a+ bP
Which of the following statement is wrong?
A utility function refers to a particular individual and reflects the tastes of that individual
When the tastes of an individual changes, his utility function changes(shifts)
Different individuals usually have different tastes and thus have different utility functions
Different individuals have same tastes and thus have the same utility function
A good tends to have relatively inelastic demand, if:
Close substitutes are available
It has a high price
It is a luxury
It has no very close substitutes
Marginal utility is only meant for:
Half utility
Full utility
Additional utility
Multiplied utility
Income -elasticity of demand will be zero when a given change in income brings about:
A less than proportionate change in quantity demanded
A more than proportionate change in quantity demanded
The same proportionate change in quantity demanded
No change in quantity demanded
If the price of coffee increases, you would predict that:
Demand curve for sugar will shift downward (leftward)
Supply curve for sugar will shift leftward (upward)
Demand curve for bread will shift downward (leftward)
None of the above
Under monopolistic competition, the firms compete alongwith:
Supreme powers
Discretionary powers
Low powers
None of the above
Monopoly means:
Where there is no retail trade and every thing is sold on wholesale basis
Where trading of a particular commodity is controlled exclusively by one firm
Where many people sell only one commodity
A form of business organization in which only single proprietorship exists
Indifference curve represents:
Only two commodities
Only three commodities
More than three commodities
Any number of commodities
To calculate the Economic Profit we must deduct which of the following cost from our total revenues?
Opportunity cost
Direct cost
Rent cost
Wage cost
By scarcity the economist means that all goods are scarce relative the peoples:
Desire for them
Purchases
Production
Consumption