If as a result of a decrease in price, total outlay (expenditures) on a commodity increases, its price-elasticity of demand is:
Perfectly elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unit elastic
Relatively inelastic (less than one elasticity)
Correct Answer :
B. Relatively elastic (greater than one elasticity)
Related Questions
A firm in a position of equilibrium is supposed to be maximizing:
Output
Sales
Profits
None of the above
The demand curve of a firm in monopolistic competition is:
Negatively sloped
Vertical
Horizontal
Positively sloped
The combination of labor and capital where the cost of a given output is minimized is known as:
Least cost factor combination
Optimum factor combination
Both a and b
None of them
Isocost line shows the combinations of labor and capital where a firms budget is:
Fully spent
Half spent
Partially spent
Nearly spent
The products, under monopolistic competition are differentiated, yet they are:
Complements
Close substitutes
Both a and b
None of the above
The elasticity of substitution measures the percentage change in the ratio of inputs when any producer observes the percentage change in:
Output cost
Output ratio
Input prices
Input ratio
If the marginal utility of apples to a consumer exceeds that of bananas then the consumer:
Is not in equilibrium
Will not buy any banana
Will buy some banana but less than he buys of apples
Is willing to pay more for apples than bananas
Because the price elasticity of demand for OPEC oil is approximately .08, in order to increase revenues OPEC should:
Lower price in order to increase revenues
Lower price in order to decrease the amount of oil sold
Rise price in order to increase the amount of oil sold
Raise price in order to increase revenues
The demand curve of giffen goods will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
In the theory of firm, Chamberline presented the idea of:
Rising cost
Falling cost
Rising input
Falling input
In monopolistic competition, the firms have to face:
Same cost conditions
Different cost conditions
Same price conditions
Same products conditions
J.R.Hicks was:
Neo-classical economist
Classical economist
Keynesian economist
Post-Keynesian economist
According to Marginalists, the price of any commodity is determined by:
Marginal usefulness
Marginal cost
Both of them
None of them
When a consumer reached at the point of saturation then marginal utility (MU) is:
Negative
One
Positive
Zero
In sweezy model (kinked demand curve model), the role of MC curve:
Can be ignored
Cannot be ignored
Partially be ignored
None of the above
If the price of product increases and in the result the demand for product B also increases then:
A and B are substitute goods
A and B are complementary goods
A is inferior to B
A is superior to B
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
Which of the following is not a feature of isoproduct curves?
Are downward sloping to the right
Show different input combination producing the same output
Intersect each other
Are convex to the origin
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
If the demand curve remains unchanged and supply increases, the price will:
Rise
Fall
Remain the same
None of the above
The Modern and Neo-Keynsian Theory of Interestwas presented by:
Gunner Myrdal
A.C.Pigou
J.M.Keynes
J.R.Hicks
The normal long-run average cost curve is influenced by the:
Principle of diminishing returns
Economies and diseconomies of large scale production
Principle of constant return to scale
All of the above
Total fixed costs are:
If we measure the elasticity of demand with the help of the average and marginal revenue, the formula is:
Ed = AR/ (AR- MR)
Ed = MR/ (AR-MR)
Ed = AR/(MR-AR)
Ed = AR/ MR
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
The demand curve in monopolistic competition (also in kinked demand curve model), which shows the share of a firm in market is called:
Relative demand curve
Proportional demand curve
Productive demand curve
Differential demand curve
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
Liquidity of Preference Theory was introduced by:
Alfred Marshal
Lord Keynes
Karl Marx
Prof. Robbins
Which cost increases continuously with the increase in production?
Average cost
Marginal cost
Fixed cost
Variable cost
Change in demand (rise and fall 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