If both demand and supply were to increase then:
Quantity exchanged would fall and price would rise
Quantity exchanged and price would both fall
Quantity exchanged would rise and price might rise or fall
Quantity exchanged and price would both rise
Correct Answer :
C. Quantity exchanged would rise and price might rise or fall
If both demand and supply increases, then both curves shift to the right, and quantity exchanged surely increases, but price may rise or fall depending on which curve shifted further.}
Related Questions
The income consumption curve (ICC) is the locus of points of consumer equilibrium resulting:
Only when the price of commodity X changes
Only when the price of commodity Y changes
Only when the consumers income is varied
None of the above
If the commodity is normal then the Income Effect (I.E) and the Substitution Effect (S.E):
Both move together and reinforce each other
One moves and the other remains constant
Move in the opposite direction and neutralize each other
Both remain constant
In case of straight-line isoquant, the factors are not substituted because they are each others:
Imperfect substitutes
Perfect substitutes
Complements
None of the above
Which of the following oligopoly models is concerned with the maximization of joint profits?
Price leadership model
Bertrands model
Collusive model
Edgeworths model
Of the following commodities, which has the lowest price-elasticity of demand?
Car
Salt
Tea
House
By increasing the price of its products above those of its competitors, a perfectly competitive seller:
Can sell more
Reduces its revenues
Can sell nothing
Increases its revenues
The cross-price elasticity of the demand for orange juice with respect to the price of apple juice is probably:
Negative
Positive
Near infinite
Zero
In monopolistic competition, the customers are attached with one product because of:
Product similarity
Product differentiations
Product inferiority
None of the above
Increasing returns imply:
Constant average cost
Diminishing cost per unit of output
Optimum use of capital and factor
External economies
AR curve under perfect competition:
Slopes downwards to the right
Slopes upward to the right
Is vertical to the x-axis
Is horizontal to the x-axis
The number of sellers in duopoly is:
A few
Four
Two
Very large
In first degree price discrimination, monopolist takes away :
All of the consumer surplus
All of the producer surplus
Some part of the consumer surplus
None of them
Marshallian approach is also known as:
Cardinal approach
Ordinal approach
Consumer approach
Production approach
In monopolistic competition, the real differentiation in products is due to difference in:
Style
Consumer
Cost
Material
When elasticity of demand is greater than one (e >1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
In discriminating monopoly (price discrimination), the elasticity of demand of product in two markets are:
Different
Same
Zero
None of the above
The main contribution of Adam Smith is in the field of:
Economics of state
Wealth of Nations
Value and price
Theory of demand
Marginal Utility (MU) curve is always:
Rising
Falling
Parallel to X-axis
Parallel to Y-axis
An individual consumers demand is not determined by:
Price of the commodity
Price of the substitutes
His household income
Size of countrys population
The consumer is in equilibrium at the where:
Budget line and indifference curve intersect each other
Budget line and indifference curve are tangent to each other
Budget line and indifference curve are opposite to each other
Budget line and indifference curve are parallel to each other
Which of the following is called Gossens first law?
Law of production
The Law of Equi-Marginal Utility
The Law of Diminishing Marginal Utility
Law of Variable Proportions
The necessary condition of firms equilibrium requires:
dR/dQ + dC/dQ = 0
dR/dQ - dC/dQ = 0
dC/dQ - dR/dQ = 0
dR/dQ > dC/dQ > 0
When elasticity of demand is one (e=1), then following the formula MR=P[1-1/e], the MR will:
Positive
Negative
Zero
None of the above
The line from the origin to a point on an isoquant shows:
The wages employment ratio
The capital rent ratio
The rent labor ratio
The capital labor ratio
The substitution effect works to encourage a consumer to purchase more of a product when the price of that good is falling because:
The consumers real income has increased
The consumers real income has decreased
The product is now relatively less expensive than before
Other products are now less expensive than before
The longer the period of time, the elasticity of supply will be:
Constant
Less elastic
More elastic
Perfectly elastic
The proportional demand curve in monopolistic competition (also in kinked demand curve model), is like industry demand curve in:
Monopolistic competition
Imperfect competition
Monopoly
Perfect competition
If the demand curve is vertical then its slope is:
Infinite
Zero
Equal to one
None of the
We get constant returns to scale when:
a = ½
� = ½
Both of them
None of them
An indifferent curve shows:
That how many utils are obtained from consuming different bundles of commodities
Different collections of two commodities the consumer considers to be of equal value
That if price increases there will be an increases in demand
None of the above