Cross-elasticity of demand or cross-price elasticity between two independent goods will be:
Negative
Positive
Infinite
Zero
Correct Answer :
D. Zero
If two goods are independent then cross-elasticity of demand is zero b/c as the price of one good changes, there will be no change in demand for the other good)
Related Questions
According to current thinking, the law of diminishing returns applies to:
All fields of production
Agriculture
Mining
Manufacturing
The total revenue curve for monopolist is the shape of:
Circle
Rectangle
Parabola
None of the above
Change in quantity demanded refers to:
Upward shift of the demand curve
Downward shift of the demand curve
Movement on the same demand curve
None of the above
In Bertrand model, the entry of new firms is:
banned
allowed
partially allowed
none of the above
The Modern and Neo-Keynsian Theory of Interestwas presented by:
Gunner Myrdal
A.C.Pigou
J.M.Keynes
J.R.Hicks
In cournot model, at equuilibrium when MC = MR, the elasticity of demand is:
equal to one
zero
negative
equal to 2
If the commodities X and Y are perfect complements then:
None of the above
Which of the following curves is a rectangular hyperbola?
ATC
AVC
AFC
None of the above
In Revealed Preference Theory, Samuelson proves P.E = S.E + I.E :
With using indifference curves
With using MRS
Without using indifference curve
None of the above
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
An indifference curve shows the bundles of two goods among which a consumer remains:
Indifferent
Different
In equilibrium
Dominant
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
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
If a good is an inferior good then an increase in incomes of the consumers will:
Increase demand for the good
Increase supply of the good
Reduce the equilibrium price of the good
None of the above
Who finalized the model of imperfect competition?
Ricardo
Marshal
Chamberlin
Mrs. Robinson
In income effect, we:
Move to another indifference curve
Move along given indifference curve
Move to lower indifference curve
Move to upper indifference curve
Chamberline introduces the concept of:
V-shaped selling cost
U-shaped selling cost
V-shaped purchasing material
U-shaped purchasing material
According to Diamond Water Paradox diamonds are more expensive than water because:
They yield higher total utility
They yield higher marginal utility
They are more useful
None of the above
The Purchasing Power Parity (PPP) Theory is presented by:
J.M.Keynes
E.D.Domar
Adam Smith
Gustav Cassel
Production is a function of:
Profits
Costs
Inputs
Price
While buying two goods X and Y with unequal prices, to maximize total utility from his income, a consumer should get:
Equal MU from both commodities X and Y
More MU from commodity X than from commodity Y
More MU from commodity Y than from commodity X
Equal marginal utility from the last rupee spent on commodity X and commodity Y
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
The Lambda or Langrange Multiplier is a:
Analyst
Catalyst
Pessimist
Optimist
Equilibrium of a firm represents maximization of profits as well as:
Maximization of losses
Minimization of losses
Minimization of profits
None of the above
If the commodity is normal then fall in price will result in:
Increase the quantity demanded
Fixed the quantity demanded
Decrease the quantity demanded
None of the above
Inputs or Factors of production are defined as:
Productive resources such as labor and capital equipment that firms use to manufacture goods and services are called inputs or factors of production
Unproductive resources that do not take part in production process are called inputs or factors of production
Firms own resources are called inputs or factors of production
None of the above
In perfectly competitive markets, the profit maximization rule can be represented by:
MR=ATC
P=ATC
P=MC
P=AC
If by doubling all inputs in the long run output is less than double, it is a case of:
Increasing returns to scale
Decreasing returns to scale
Constant returns to scale
Variable returns to scale
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 main contribution of Malthus is in the field of:
Consumption expenditure
Theory of population
Division of labor
Theory of demand