Identify the factor, which generally keeps the price elasticity of demand for a commodity low:
Variety of uses for that commodity
Its low price
Close substitutes for that commodity
High proportion of the consumers income spent on it
Correct Answer :
B. Its low price
Related Questions
If Marginal Utility (MU) is zero, then total utility is:
Maximum
Minimum
Infinite
Not measureable
The point where the supply and demand curves intersect on a graph determines:
Market price
Equilibrium price
Long-term price
Short-term price
The effects according to which people use those goods which are concerned with distinctive standard of living are:
Bandwagon effects
Snob effects
Veblen effects
Steven effects
The long run total cost is attained by:
LMC.Q
AC.Q
LC.Q
LAC.Q
In case of perfect competition, TR curve rises at a:
Constant rate
Decreasing rate
Increasing rate
None of the above
Which form of market structure is characterized by interdependence in decision-making as between the different competing firms?
Oligopoly
Perfect competition
Imperfect competition
None of the above
The behavior of MC curve is determined by the behavior of the:
AC curve
SC curve
TC curve
None of the above
The concept of industry in monopolistic competition has been replaced by:
Firm
Product group
Producers
Shopkeepers
Moving along an indifference curve leaves the consumer:
Better off
Worse off
Neither better nor worse off
None of the above
The Substitution Effect (S.E) is always:
Negative
Zero
Positive
Infinite
The cost that a firm incurs in purchasing or hiring any factor of production is referred to as:
Explicit cost
Implicit cost
Variable cost
Fixed cost
Increase in demand occurs when:
The price falls and the demand also falls down
The price increases but demand falls down
The price increases the demand remains constant and when the price remains constant the demand goes up
The price remains constant but demand falls
A decrease in demand lowers the price the most:
In the immediate run
In the short run
When the supply is perfectly elastic
When producers have sufficient time to fully adjust to the demand change
Law of Substitution in production was presented by:
Classical economists
Keynes
Neo-classical economists
Karl Marx
If the commodity is inferior then the increase in income of the consumer results in:
More purchase
Less purchase
Same purchase
None of the above
If two goods have same marginal utility for a consumer then:
He will consume only one of them
He will consume equal quantities of them
He will be willing to pay the same price for each of them
The total utility gained from each of them is equal
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
Which of the following is not a characteristic of a perfectly competitive market?
There is perfect information about prices
All participants in the market are small relative to the size of the overall market
There are many buyers and sellers
Buyers and sellers do not know each other
Perfect competition implies:
Differentiated goods
Homogeneous goods
Advertised goods
Distress sale of goods
In price leadership, like leader, the follower firm may:
also maximize its profits
not maximize its profits
maximize its costs
none of the above
Which of the following has more elastic demand curve?
A commodity without substitutes
A commodity with substitutes
A commodity on which a small fraction of income is spent
A commodity the use of which cannot be postponed
If money income is given then consumer is in equilibrium when:
MU < P
MU >P
MU = P
MU = 0
Dumping is international discriminating:
Monopoly
Oligopoly
Duopoly
None of the above
A typical demand curve cannot be:
Convex to the origin
Concave to the origin
A straight line
Rising upwards to the right
Identify the author of The Affluent Society?
Gunnar Myrdal
N.Kaldor
A.C.Pigou
J.K.Galbraith
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
A shift in the demand for a product is likely to result from a change in:
The products price
Expectations
The prices of factors of production used to produced it
Production technology
A maximin strategy:
Maximizes the minimum gain that can be earned
Maximizes the gain of one player, but minimizes the gain of the opponent
Minimizes the maximum gain that can be earned
None of the above
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
The demand curve of ostentation goods (Veblen goods) will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above