Cross-elasticity of demand or cross-price elasticity between two complements will be:
Negative
Positive
Infinite
Zero
Correct Answer :
A. Negative
When two goods are complements, the cross elasticity of demand will be negative for example car and fuel. The demand for cars decreased when the price of fuel increased)
Related Questions
If the slope of the isoquant is equal to the slope of isocost, then isoquant is:
Concave to the origin
Convex to the origin
Tangent to the origin
None of the above
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
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
In cournot model, at equuilibrium when MC = MR, the elasticity of demand is:
equal to one
zero
negative
equal to 2
Utility means:
The want- satisfying power of a commodity
Usefulness of commodity
Eating of commodity
None of these
Elasticity of Substitution (s) is defined as:
Percentage change in capital-labor ratio dividing by percentage change in 
Percentage change in dividing by percentage change in capital-labor ratio
Percentage change in inputs dividing by percentage change in outputs
None of the above
The monopolist who is producing the same output from two (or more than two) plants is concerned with:
Single-plant monopolist
Multi-plant monopolist
Two-plant monopolist
Some-plant monopolist
Elasticity of supply means change in supply due to change in:
Price of the commodity
Conditions of supply
Taste of the consumer
Demand for the commodity
The long run average cost curve is the envelope of:
SACs
LACs
SMCs
LMCs
At a point where a straight line demand curve meets the price axis (Y-axis), the elasticity of demand is:
Equal to one
Less than one
Equal to zero
Equal to infinite
An economic model describing the working of an economy consists of:
Functional relationships
Family relationships
Economic position
Stagnant relationships
Because of selling costs, the demand curve of a firm shifts:
Downward
Upward
Horizontal
Straight line
According to law of Equi-Marginal Utility when price of commodity falls then we bought:
More units
Less units
Same units
Zero units
Which of the following would be least likely to cause a consumer to eat less beef?
An increase in the price of beef
An increase in the price of lamb
A reduction in the consumers income
A reduction in the price of lamb
The situation of single buyer and single seller is called:
Monopoly
Multi-plant monopolist
Bilateral monopoly
Price discrimination
If Cobb-Douglas production function is homogeneous of degree less than one (n<1), then it shows:
Constant returns to scale
Increasing returns to scale
Decreasing returns to scale
None of the above
The addition or increment to the total cost involvesd in expanding or contracting output by one unit is called:
Fixed cost per unit
Variable cost per unit
Total cost per unit
Marginal cost
Under monopoly and imperfect competition MC is:
More than the price
Less than the price
Equal to the price
Less than or equal to the price
In the long-run competitive equilibrium:
There is tendency for firms to enter but not leave the industry
Firms have no tendency either to enter or to leave the industry
Some firms may enter while the others may leave the market even after the equilibrium of the industry
Entry or exit of the firms cannot be predicted
A budget line shows:
Quantities of commodity X which a consumer could buy with no amount of Y
Quantities of commodity Y which a consumer could buy with no amount of X
The different combinations of X and Y that the consumer could buy
All of the above
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
In joint-profit maximization cartel, the distribution of profit is:
Made by agency
Not made by agency
Made by people
None of the above
We can obtain consumers demand curve from:
Income Consumption Curve (ICC)
Engels Curve
Price Consumption Curve (PCC)
Production Possibility Curve (PPC)
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
The Law of Equi-Marginal Utility refers to:
Marginal utility of commodity X
Marginal utility of commodity Y
Marginal utility per rupee spent on X and Y commodities
None of the above
External economies are witnessed in:
A rising supply curve
A rising demand curve
A falling supply curve
A falling demand curve
We can find total utility by:
Multiplying the number of unit by its marginal utility
Adding up the marginal utility of all units
Multiplying price by number of units
None of the above
The arc elasticity is the measure of average elasticity at the mid-point of the chord and connects:
Two points on demand curve
Two points on supply curve
Many points on demand curve
Many points on demand curve
A demand curve is not related to:
The price of the commodity
The time period
The price of substitutes
Any of the above
If two households have identical preferences but different incomes then:
They must consume the same amounts of all goods
The wealthier one will have lower marginal utility for most goods
The wealthier one will have higher marginal utility for most goods
They will enjoy the same level of utility