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If a ten percent increase in price causes a ten percent reduction in quantity demanded, elasticity of demand is:

A. Perfectly elastic

B. Elastic

C. Unitary elastic

D. Inelastic

Correct Answer :

C. Unitary elastic


Related Questions

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The demand of the necessities is:

A. More elastic

B. Less elastic

C. Unit elastic

D. Zero elastic

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In monopolistic competition, the real differentiation in products is due to difference in:

A. Style

B. Consumer

C. Cost

D. Material

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The main contribution of Prof.Robbins is in the field of:

A. human welfare

B. national income

C. multiplicity of wants and scarcity of resources

D. theory of production

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When total revenues equal to total opportunity cost then the firm will earn:

A. Abnormal profit

B. Zero profit

C. Normal profit

D. Negative profit

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The main objective of the firm is to:

A. Face losses

B. Avoid losses

C. Bear losses

D. Make economic decisions

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Perfect competition implies:

A. Differentiated goods

B. Homogeneous goods

C. Advertised goods

D. Distress sale of goods

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4

Which one of the following has been the most influential work of F.H.Knight?

A. Freedom and Reform

B. The Green Revolution

C. Economic Integration

D. Risk ,Uncertainty and Profit

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Excess capacity is concerned with the:

A. V-shaped traditional cost curves

B. S-shaped traditional cost curves

C. Modern cost curves

D. U-shaped traditional cost curves

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At low prices, demand is likely to be:

A. More elastic

B. Less elastic

C. Unit elastic

D. Perfectly inelastic

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In the case of an inferior commodity, the income-elasticity of demand is:

A. Positive

B. Unitary

C. Negative

D. Infinity

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The demand of the luxuries is:

A. More elastic

B. Less elastic

C. Unit elastic

D. Zero elastic

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Of the following commodities, which has the lowest price-elasticity of demand?

A. Car

B. Salt

C. Tea

D. House

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Total costs are:

A. TFC TVC

B. TFC/TVC

C. TVC/TFC

D. TFC +TVC

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We can write ordinal utility function as:

A. U = x1 x2

B. U = x1 + x2

C. U = y1 +x1

D. U = x1.x2

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The number of sellers in oligopoly are:

A. Two

B. Many

C. Four

D. Very few

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The reaction curve of a firm is attained by joining the:

A. Isoprofit curve

B. Super profit curve

C. Normal profit curve

D. Indoprofit curve

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A market-clearing price:

A. Is a disequilibrium price

B. Is an equilibrium price

C. Means a shortage exists as a market is cleared

D. Must be set by the government

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Under monopolistic competition, the products sold by the firms are:

A. Economic substitutes

B. Technical substitutes

C. Both a and b

D. None of the above

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The external economies of scale experienced by a firm include the:

A. Growth of firms processing its waste materials

B. Development of research bureau serving the industry

C. Supply of suitable skilled labor in the area

D. All of the above

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Competitors in monopolistic competition have full control over:

A. The price of their product

B. Product quality

C. The shape of the market demand curve

D. The elasticity of product substitution

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If two households have identical preferences but different incomes then:

A. They must consume the same amounts of all goods

B. The wealthier one will have lower marginal utility for most goods

C. The wealthier one will have higher marginal utility for most goods

D. They will enjoy the same level of utility

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In cournot model, firms sell:

A. Superior goods

B. Inferior goods

C. Identical goods

D. Differential goods

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An increase in the supply of a commodity is caused by:

A. Improvements in its technology

B. Fall in the prices of other commodities

C. Fall in the prices of factors of production

D. All of the above

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Entry of new firms into a competitive market will shift the supply curve of the:

A. Firm to the left

B. Industry to the right

C. Firm to the right

D. Industry to the left

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The imaginary differentiation is attributed to difference in:

A. Style

B. Salesmanship

C. Locality

D. All of these

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MC is given by:

A. The slope of the TVC curve

B. The slope of the TVC curve but not the slope of the TC curve

C. The slope of the TC curve but not by the slope of the TVC curve

D. Either the slope of the TVC curve or the slope of the TC curve

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When the slope of a demand curve is zero (also known as vertical demand curve) then elasticity will be:

A. Zero (perfectly inelastic)

B. Equal to one (unitary elastic)

C. Infinite (perfectly elastic)

D. None of the above

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In sweezy model (kinked demand curve model), the role of MC curve:

A. Can be ignored

B. Cannot be ignored

C. Partially be ignored

D. None of the above

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Ordinal approach includes arranging:

A. The different combinations of X and Y in any way the consumer wants

B. The different combinations of X and Y higher and lower and measuring the difference of utility between them

C. The different combinations of X and Y higher and lower and not measuring the difference of utility between them

D. None of above

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In first degree price discrimination, monopolist takes away :

A. All of the consumer surplus

B. All of the producer surplus

C. Some part of the consumer surplus

D. None of them