If the commodity is normal then Income Effect (I.E) is:
Negative
Positive
Zero
Infinite
Correct Answer :
B. Positive
Related Questions
Under monopolistic competition, the firms compete alongwith:
Supreme powers
Discretionary powers
Low powers
None of the above
The Input-Output Analysis was originated by:
W.W. Leontief
E.D.Domar
R.G.D.Allen
J.M.Keynes
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
Inputs or Factors of production are defined as:
Productive resources such as labor and capital equipment that firms use to manufacture goods and services are called inputs or factors of production
Unproductive resources that do not take part in production process are called inputs or factors of production
Firms own resources are called inputs or factors of production
None of the above
Utility is a function of:
Price
Quantity
Supply
Demand
The general form of Cobb-Douglas production function is:
The long run average cost curve is:
Cup-shaped
Oval-shaped
Saucer-shaped
Glass-shaped
The slope of isocost line (budget line) shows:
Capital labor ratio
Labor wage ratio
Factor price ratio
Factor labor ratio
In short-run, in monopolistic competition, a firm earns:
Normal profits
Abnormal profits
No profits
All of the above
The Law of Proportionality is another name of:
The law of diminishing marginal utility
The law of demand
The Law of Diminishing Returns
The law of supply
Total costs are:
TFC TVC
TFC/TVC
TVC/TFC
TFC +TVC
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
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
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
The central problem of economics is:
Declining productivity
Increasing consumption
Limited material wants
Limited resources and unlimited wants
The act of producing the output from more than one plant is concerned with:
Monopoly
Multi-plant monopoly
Bilateral monopoly
Price discrimination
The low cost price leader will charge:
higher prices
zero prices
lower prices
specific prices
In the perfect competition, there is a process of:
Restricted entry and exit of the firms
Semi free exit but absolute free entry
Free entry but restricted exit of the firms
Free entry and free exit of the firms
If X and Y are close substitutes, a fall in price of X will lead to:
Increase in demand for Y
Decrease in demand for Y
Increase in demand for both X and Y
Increase in demand for Y
Which of the following is assumed to be constant when drawing a demand curve?
Consumer tastes
Prices of inputs
Technology
Number of sellers
Change in quantity demanded (expansion and contraction 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
In the long run average costs curve, a firm can change:
Labour
Capital
Both of them
None of them
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
All of the following are capital resources except:
Warehouses
Buildings
Dams
Share of stock
A market demand curve presumes that:
All consumers are alike
Incomes of all consumers is the same
Tastes of all consumers are the same
Consumers differ in taste, incomes and other matters
A normal profit is:
A zero economic profit
Revenues less explicit cost
About 10% for most industries
A zero accounting profit
Who finalized the model of monopolistic competition?
Ricardo
Marshal
Chamberlin
Mrs. Robinson
Price-taker firms:
Advertise to increase the demand for their product
Do not advertise, because most advertising is wasteful
Do not advertise because they can sell as much as they want at the current price
Who advertise will get more profits than those who do not
Under price discrimination, the buyers must:
Be similar
Not be similar
Equal
None of the above
The external economies of scale experienced by a firm include the:
Growth of firms processing its waste materials
Development of research bureau serving the industry
Supply of suitable skilled labor in the area
All of the above