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
Correct Answer :
C. Reduce the equilibrium price of the good
If the income of consumers goes up, the demand for an inferior good falls, which leads to a reduction in the equilibrium price.}
Related Questions
The marshallian demand curve includes:
Substitution Effect
Income Effect
Both substitution and income effect
None of them
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
The ordinary demand curve is also called:
Marshallian demand curve
Hicksian demand curve
Slutsky demand curve
All the above
Which of the following conditions is met in the long-run equilibrium in monopolistic competition, where the firm is earning only normal profits?
MC =AC and P
MC = AC and P=MR
P =MC and P
MC=MR and P =AR= ATC
In cournot model firms:
Cannot make price adjustments
Can make price adjustments
Can adjust number of customers
None of the above
The real income of a consumer is income in terms of:
Goods
Goods and survices
Goods and survices it can purchased
Monetary units
Who developed the concept of Representative Firm?
A.C.Pigou
Alfred Marshal
J.M.Keynes
D.H.Robertson
Total fixed costs are:
Total Utility (TU) curve:
Always rises
Always falls
First falls and then rises
First rises and then falls
One way the government can induce a monopolist to expand his output is by imposing:
A specific tax on the monopolists output
A price ceiling that make the monopolist lower his price
A price floor that make the monopolist raise his price
A heavy tax on the monopolists profit
If less is demanded at the same price or same quantity demanded at a lower price, it is a case of:
Contraction of demand
Decrease in demand
Increase in demand
Extension of demand
The firm in cournot model:
face costs
face taxes
donot face taxes
donot face costs
In monopolistic competition, the customers are attached with one product because of:
Product similarity
Product differentiations
Product inferiority
None of the above
Economic laws are:
Conditional
Moral by nature
Predicted
Like laws of sports
The longer the period of time, the elasticity of supply will be:
Constant
Less elastic
More elastic
Perfectly elastic
The alternative of profit maximization theory is:
Cost maximization
Product maximization
Revenue maximization
None of the above
The kink demand curve faced by an oligopolist is based on the assumption that:
Competitors will follow a price increase but not a price cut
Competitors will follow a price increase as well as a price cut
Competitors will ignore both a price increase and a price cut
Competitors will ignore a price increase but will follow a price cut
In perfect competition, the slope of the total revenue curve of a firm is equal to the:
Market price
AVC
TFC
AFC
With elasticity of demand, the:
Negative sign is ignored
Positive sign is ignored
None of them
Both of them
The largest possible loss that a firm will make in the short run is:
Zero
Its total fixed cost
Its total variable cost
Equal to one
The cobweb model will divergent when the slope of:
Demand curve is more than supply curve
Supply curve is more than demand curve
Supply curve is equal to demand curve
None of the above
According to Marshal, the Law of Diminishing Marginal Utility:
Applies on both money and other commodities
Does not apply on money
Does not apply on bank money but applies on cash money
Applies on all the commodities except on money
Law of Diminishing Marginal Utility is practically untrue because:
It is given to a lot of criticism
It is too difficult to be explained
It is based on assumptions which are unreal
Economists do not agree on this
The model which gives us information about price and output changes in different periods is:
Stable cobweb model
Perpetual oscillation
Both(a) and(b)
None of them
In cournot model, during the process of adjustment, the number of firms:
Donot change
Change
Both a and b
None of the above
Identify the work of Irving Fisher:
Policy on trade
Policy against inflation
The making of index numbers
Labor theory
Which is the other name that is given to the average revenue curve?
Profit curve
Demand curve
Average cost curve
Indifference curve
In cournot model, firms sell:
Superior goods
Inferior goods
Identical goods
Differential goods
Necessary condition for consumer equilibrium is:
If the commodity is normal then price effect is:
Negative
Inverse
Positive
Both (a) and(b)