Formulation of an economic theory involves:
Statements of various assumptions or postulates
Logical deductions from the assumptions made
Testing the hypothesis against empirical evidence
All of the above
Correct Answer :
D. All of the above
Related Questions
If in the long run all factor inputs are increased three times and the resulting output is four times as before, it is a case of:
Decreasing returns to scale
Variable returns to scale
Constant returns to scale
Increasing returns to scale
A high value of cross-elasticity indicates that the two commodities are:
Very good substitutes
Poor substitutes
Good complements
Poor complements
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
When total revenues equal to total opportunity cost then the firm will earn:
Abnormal profit
Zero profit
Normal profit
Negative profit
According to critics, the assumption of costless production is:
true
not true
reliable
deniable
In monopolistic competition, the real differentiation in products is due to difference in:
Style
Consumer
Cost
Material
Equilibrium of a firm represents maximization of profits as well as:
Maximization of losses
Minimization of losses
Minimization of profits
None of the above
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
The non-price competition cartel is a:
stable cartel
unstable cartel
prominent cartel
special cartel
Which of the following pairs of commodities is an example of substitutes?
Tea and sugar
Tea and coffee
Pen and ink
Shirt and trousers
In monopolistic competition, the firms have to face:
Same cost conditions
Different cost conditions
Same price conditions
Same products conditions
We can measure consumers surplus with the help of
TU curve
MU curve
Supply curve
None of the above
According to Chamberline, in monopolistic competition, differentiation is determined by:
Choices
Preferences
Both a and b
None of the above
Any expansion in output by a firm in the short period will always reduce the:
Average variable cost
Average fixed cost
Both average fixed and variable cost
None of the above
General equilibrium is concerned with simultaneous equilibrium of:
Few economic agents
All the economic agents
Two economic agents
Many economic agents
The Modern and Neo-Keynsian Theory of Interestwas presented by:
Gunner Myrdal
A.C.Pigou
J.M.Keynes
J.R.Hicks
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
Cournot equilibrium is attained where two reaction curves:
Repel each other
Represent each other
Intersect each other
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
The ordinal approach was presented by:
Marshal
J.R.Hicks
Adam smith
Rostow
In Recardian theory of value, the stress has been made on:
Marginal cost
Production cost
Labor cost
Supply cost
On a straight line demand curve, elasticity of demand at the midpoint is:
Equal to zero
Equal to one
Equal to infinity
More than one
In repeated game, the Prisoners Dillemma can have a:
Non-cooperative outcome
Cooperative outcome
Dominant behavior
Recessive behavior
The basic and essential economic problems in a community are related to choice and:
Freedom
Scarcity
Social class
Politics
Excess capacity is concerned with the:
V-shaped traditional cost curves
S-shaped traditional cost curves
Modern cost curves
U-shaped traditional cost curves
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
Price discrimination is undertaken with the aim of:
Increasing sales and maximizing profits
Reducing sales and raising prices
Minimizing cost and maximizing revenue
Serving the markets without earning profits
Marginal utility means:
Utility derived from the last unit of production
Utility derived from the last unit of a commodity which is being consumed
Total utility- Average utility
None of the above
Marginal utility is only meant for:
Half utility
Full utility
Additional utility
Multiplied utility
Moving along the indifference curve leaves the consumer:
Better off
Worse off
In equilibrium
Neither better off nor Worse off