If the commodity is inferior then Income Effect (I.E) is:
Negative
Positive
Zero
Infinite
Correct Answer :
A. Negative
Related Questions
Marshalls definition of economics was strongly criticised by:
Adam Smith
Prof.Pigno
Prof. Robbins
J.B.Clark
General Equilibrium deals with the equilibrium of the:
Consumer
Producer
Farmer
All the producers and consumers
The situation in between the extremes of the govt. controlled, planned economy and the perfectly free, unplanned economy is known as:
Developed economy
Laissez-fair economy
Mixed economy
Capitalistic economy
A profit-maximizing monopolist in two separate markets will:
Charge the same price in both markets
Always charge a higher price in the market where he sells more
Always charge a higher price in the market where he sells less
Adjust his sales in the two markets so that his marginal revenue in each market just equals his aggregate marginal cost
4.The Law of Diminishing Returns according to the modern view, applies to:
Agriculture
All fields of production
Industry
Services
When at a given price, the quantity supplied of a commodity is more than the quantity demanded, there will be:
An upward pressure on price
A downward pressure on price
Price will remain unaffected
All of the above
In a socialist (communist) economy the invisible hand:
Guides most resource allocation decisions
Operates effectively only in the labor market
Operates effectively only in the market for capital
Is prevented from operating effectively
In context of oligopoly, the kinky demand curve (kinked demand curve) hypothesis is designed to explain:
Price and output determination
Price rigidity (price stickness)
Price leadership
Collusion among rivals
In respect of which of the following category of goods is consumers surplus highest?
Giffen goods
Necessities
Luxuries
Prestige goods
Conditions of perfect competition ensure:
That each firm can influence the price
No single firm can influence the price
Any single firm can influence the supply condition in the market
Any single firm can influence both supply and price in the market
If a consumer buys a product that costs Rs.3 and provides an additional 18 units of satisfaction, then for this purchase:
Total utility will increase by 6 units
The marginal utility per rupee is 6
The consumer will buy more because marginal utility is positive
The consumer obtained an extra54 units
In the case of a giffen good, the income effect:
Is equal to the substitution effect
More than offsets the substitution effect
Reinforces the substitution effect
Only partially offsets the substitution effect
The goods sold by firms under monopolistic competition are technological as well as:
Economic complements
Economic substitutes
Economic inferiors
None of the above
Price elasticity of demand can be measured in the following way:
Percentage change in quantity demanded of a commodity divided by percentage change in price of that commodity
Change in quantity demanded of a commodity divided by change in price of that commodity
Percentage change in price of a commodity divided by percentage change in quantity demanded of that commodity
None of that commodity
In finding equilibrium position of a profitmaximizing firm, which technique is most convenient?
Total revenue and total cost technique
Marginal revenue and marginal cost technique
Demand and supply technique
None of the above
The difference between average cost and average revenue is:
Total profit
Average profit
Net profit
Marginal profit
The production process is:
Consuming goods and services
Transforming inputs into outputs
Wasting goods and services
Buying goods and services
The isoquant which are generated by CES (constant elasticity of substitution) production function are always:
Positively sloped
Negatively sloped
Concave to the origin
None of the above
Who formulated the Post-Keynsian Theory of Distribution and Growth?
J.M.Keynes
N.Kaldor
C.P.Kindleberger
Irving Fisher
If the commodity is normal then price effect is:
Negative
Inverse
Positive
Both (a) and(b)
Which of the following theories of trade cycle was presented by William Jevons?
Sunspot Theory
Monetary Theory
Saving-Investment Theory
Innovation Theory
If a monopolist is producing under decreasing cost conditions, increase in demand is beneficial to the society because:
Consumers get better quality goods
Cost of production falls and hence price will follow
Goods will be sold in many markets
None of the above
In collusive olligopoly, the firms may make:
Open agreements
Secret agreements
Both a and b
None of the above
Identify the work of T.W.Schultz:
Transforming Traditional Agriculture
Productivity and Technical Change
Jobs, Poverty and the Green Revolution
Causes of Poverty
The MRTS along an iso-quant goes on to:
Appear
Diminish
Prominent
Increase
Monopoly means:
Where there is no retail trade and every thing is sold on wholesale basis
Where trading of a particular commodity is controlled exclusively by one firm
Where many people sell only one commodity
A form of business organization in which only single proprietorship exists
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
Ceteris paribus clause in the law of demand means:
The price of substitute does not change
The taste of the consumer does not change
The income of the consumer does not change
All of the above
Price leadership is associated with:
Collusive oligopoly
Non-collusive oligopoly
Cartel
Perfect competition
With elasticity of demand, the:
Negative sign is ignored
Positive sign is ignored
None of them
Both of them