For a few products such as insulin for diabetics,:
The demand curve can be upward sloping
The price elasticity of demand could be zero
The price elasticity of demand could be greater than one
None of the above
Correct Answer :
B. The price elasticity of demand could be zero
For such products it is possible for the demand curve to be vertical (completely inelastic) with price elasticity equal to zero. The reason is that the use of insulin is very necessary for diabetic patients and they would buy the same amount of insulin on any level of price.}
Related Questions
Marginal revenue from a given output:
The price at which the marginal unit sells
Total revenue sale of all units divided by volume of sales
Average revenue of total output average revenue of last unit
The change in total revenue resulting from the sale of one unit more of output
A loss bearing firm will continue to produce in the short run so long as the price at least covers:
Average variable cost
Average fixed cost
Average variable cost + average fixed cost
Marginal costs
Marginal Productivity Theory deals with the theory of:
Distribution
Exchange
Market structure
Consumer behaviour
The short-run periods in monopolistic competition are:
Parallel to each other
Dependent upon each other
Independent of each other
Zero
Total costs in the short-term (short-run) are classified into fixed costs and variable costs. Which one of the following is a variable cost?
Cost of raw materials
Cost of equipment
Interest payment on past borrowing
Payment of rent on buildings
A demand schedule is shown as:
A function of price alone
A result of change in tastes
A result of increase in the size of the family
None of the above
Who introduced the concept of Elasticity of Demand into economic theory?
Alfred Marshal
Adam Smith
Karl Marx
George Stigler
The short run cost curve is U shaped because of:
The operation of increasing cost
The existence of fixed cost
The existence of variable cost
All of the above
The firms in non-cooperative games:
Enforce contracts
Make contracts
Make negotiations
Do not make negotiations
The main contribution of Adam Smith is in the field of:
Economics of state
Wealth of Nations
Value and price
Theory of demand
Who wrote A Contribution to the Theory of Trade Cycle?
N.Kaldor
J.R.Hicks
A.C.Pigou
J.M.Keynes
The imaginary differentiation is attributed to difference in:
Style
Salesmanship
Locality
All of these
In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
The Chamberline model recognizes mutual:
Independence of firms
Interdependence of firms
Independence of individuals
Interdependence of materials
Indifference curves are downward sloping and are drawn bowed toward the origin (convex to the origin) implying:
Consumers prefer to have less satisfaction than more of both commodities
As more and more of one commodity is obtained, less and less of the other must be given up to keep satisfaction constant
The total satisfaction obtained along an indifference curve decreases at an increasing rate
None of the above
The Substitution Effect (S.E) is always:
Negative
Zero
Positive
Infinite
Indifference curves reflect:
Preferences
Income
Prices
Consumption
Under the law of variable proportions, the average and the marginal product of the variable factor would ultimately:
Become equal
Decrease
Become constant
Increase
Marshallian approach is also known as:
Cardinal approach
Ordinal approach
Consumer approach
Production approach
At high prices, demand is likely to be:
More elastic
Less elastic
Unit elastic
Perfectly inelastic
In perfect cartel, the:
Perfect competition price is charged
Monopoly price is charged
Monopoly price is not charged
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
When price increases and with it the total outlay on a commodity also increases, 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)
Who is the author of Problems of Capital Formation in Underdeveloped Countries?
R.Nurkse
N.Kaldor
S.kuznets
Alfred Marshal
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
Variable costs refer to:
Capital cost plus operating costs
Capital costs alone
Capital costs plus spill-over costs
Operating costs alone
A demand curve is not related to:
The price of the commodity
The time period
The price of substitutes
Any of the above
Price elasticity of demand can be measured in the following way:
Percentage change in quantity demanded of a commodity divided by percentage change in price of that commodity
Change in quantity demanded of a commodity divided by change in price of that commodity
Percentage change in price of a commodity divided by percentage change in quantity demanded of that commodity
None of that commodity
The situation of single buyer and single seller is called:
Monopoly
Multi-plant monopolist
Bilateral monopoly
Price discrimination
In the case of complements, the cross demand curve slopes:
Downwards to the right
Upwards to the right
Backwards to the top
Inwards at the bottom