If cross-elasticity of one commodity for another turns out to be zero, it means they are:
Close substitutes
Good complements
Completely unrelated (independent goods)
None of the above
Correct Answer :
C. Completely unrelated (independent goods)
Related Questions
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
Under the law of variable proportions, the average and the marginal product of the variable factor would ultimately:
Become equal
Decrease
Become constant
Increase
In the long-run competitive equilibrium:
There is tendency for firms to enter but not leave the industry
Firms have no tendency either to enter or to leave the industry
Some firms may enter while the others may leave the market even after the equilibrium of the industry
Entry or exit of the firms cannot be predicted
In dominant strategies I am doing the best, I can no matter:
What you do
What you are doing
What you not do
None of them
Micro economics is concerned with:
Product markets
Factor markets
Supply and demand
a, b and c
Variable costs refer to:
Capital cost plus operating costs
Capital costs alone
Capital costs plus spill-over costs
Operating costs alone
In monopolistic competition, the firm take advantage due to customers:
Similar choices
Unlimited choices
Differential choices
Few choices
With firms having cost differences under perfect competition, a firm, which earns normal profit in the long-run is called:
An optimum firm
A representative firm
An oxford firm
A marginal firm
If two goods are perfect substitutes then IC will be:
Concave to the origin
Convex to the origin
Positively sloped
Negatively sloped
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
Traditionally, the study of determination of price is called:
Theory of price
Theory of value
Theory of labor
Theory of cost
The general form of Cobb-Douglas production function is:
The Chamberline model recognizes mutual:
Independence of firms
Interdependence of firms
Independence of individuals
Interdependence of materials
If the price of a product falls then quantity demanded tends to increase ceteris paribus because:
The MU/P ratio has decreased
Of the income and substitution effects
Consumers tend to feel poorer when prices fall
When price falls the demand curve shifts right
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
Which of the following oligopoly models is concerned with the maximization of joint profits?
Price leadership model
Bertrands model
Collusive model
Edgeworths model
The firm is said to be in equilibrium when the difference between revenue and cost is:
Maximum
Minimum
Zero
One
When price decreases and with it the total outlay on a commodity also decreases, it is a case of:
Perfect elasticity (infinitely elastic)
Relative elasticity (greater than one elasticity)
Perfect inelasticity (zero elasticity)
Relative inelasticity (less than one elasticity)
Under which of the following forms of the market structure does a firm have no control over the price of its product?
Monopoly
Monopolistic competition
Oligopoly
Perfect competition
Cross-elasticity of demand or cross-price elasticity between two complements will be:
Negative
Positive
Infinite
Zero
At high prices, demand is likely to be:
More elastic
Less elastic
Unit elastic
Perfectly inelastic
In real life, brand loyalty is a barrier to:
Enter the new firms
Exit the new firms
Both a and b
None of the above
For a commodity giving large consumers surplus, the demand will be:
Less elastic
More elastic
Unit elastic
Zero elastic
The Purchasing Power Parity (PPP) Theory is presented by:
J.M.Keynes
E.D.Domar
Adam Smith
Gustav Cassel
When a consumer is in equilibrium then slope of indifference curve is:
Equal to the slope of budget line
Greater than the slope of budget line
Smaller than the slope of budget line
Parallel to the slope of budget line
The main contribution of Prof. R.G.D.Allen is in the field of:
fixation of price
Arc elasticity of demand
Cross elasticity of demand
Wage theory
In cournot model, during the process of adjustment, the number of firms:
Donot change
Change
Both a and b
None of the above
Excess capacity is not found under:
Monopoly
Monopolistic competition
Perfect competition
Oligopoly
Formulation of an economic theory involves:
Statements of various assumptions or postulates
Logical deductions from the assumptions made
Testing the hypothesis against empirical evidence
All of the above
The modern cost curves are based upon the idea of:
Fixed capacity
Specific capacity
Excess capacity
Reserve capacity