If the commodity is normal then price effect is:
Negative
Inverse
Positive
Both (a) and(b)
Correct Answer :
D. Both (a) and(b)
Related Questions
The Prisoners Dilemma was presented by A.W.Tucker in:
1910
1945
1900
1940
On a straight line demand curve, elasticity of demand at the midpoint is:
Equal to zero
Equal to one
Equal to infinity
More than one
Which is not an essential feature of a socialist economy?
Social ownership of the means of production
Freedom of enterprise
Use of centralized planning
Government decisions
If demand increased and supply decreased then:
Quantity exchanged might rise or fall and price would rise
Quantity exchanged would rise and price would fall
Quantity exchanged would rise and price might rise or fall
Both quantities exchanged and price would rise
If the supply and demand increases equally, the price will:
Rise
Fall
Remain unchanged
Change depending on respective elasticities
If a straight line supply curve makes an intercept on the Y-axis, elasticity of supply is:
Equal to unity
Less than unity
More than unity
Zero
If Cobb-Douglas production function is homogeneous of degree less than one (n<1), then it shows:
Constant returns to scale
Increasing returns to scale
Decreasing returns to scale
None of the above
In cournot model, firms sell:
Superior goods
Inferior goods
Identical goods
Differential goods
The long-run AC curve is constructed from:
The minimum points on all short-run AC curves
The lowest points on the short-run MC curve
The minimum points on the short run AVC curves
It has nothing to do with the short-run cost curves
Returns to scale is a:
Timeless phenomenon
Short run phenomenon
Long run phenomenon
None of the above
The Input-Output Analysis was originated by:
W.W. Leontief
E.D.Domar
R.G.D.Allen
J.M.Keynes
Decrease in demand results in:
Upward shift in demand curve
Downward shift in demand curve
Movement on the same demand curve
No movement or shift at all
Which of the following is assumed to be constant when drawing a demand curve?
Consumer tastes
Prices of inputs
Technology
Number of sellers
If the price of Pepsi Cola goes down, you would predict:
An increase in supply of coca cola
A decrease in supply of coca cola
An increase in demand for coca cola
A decrease in demand for coca cola
Diminishing returns occur when a firm:
Starts incurring losses
Uses more and more of one input while holding all other inputs constant
Does not utilize its inputs efficiently
Cuts down on the quantity of all inputs it uses
In the short-run, in which one of the following situations would a competitive seller close down (shut-down)?
When he cannot produce at an economic profit
When price falls short of average variable cost at every level of output
When price falls short of average fixed cost at every level of output
When price falls short of average total cost at every level of output
If a firm produces zero output in the short period then which statement is true?
Its total cost will be zero
Its variable cost will be positive
Its fixed cost will be positive
Its average cost will be zero
The greater the percentage of income spent on a commodity:
The greater its elasticity is likely to be
The weaker its elasticity is likely to be
The unchanged its elasticity is likely to be
None of the above
Compared to perfect competition, a monopolist will charge:
Charges a high price
Produce more output
Increase economic efficiency
None of the above
Which describes a competitive market?
Many buyers and many sellers
One seller, many buyers
One buyer, many sellers
Few sellers, many buyers
Airlines that try to lower fares in order to increase revenues believe that demand for airline services is:
Price elastic
Price inelastic
Income elastic
Income inelastic
The elliptical isoquant represents the:
Economic combinations of labor and capital
Uneconomic combinations of labor and capital
Both a and b
None of the above
In economic term water is a:
Free good
Economic good
Both of the above
None of the above
In economics, Externality means:
An externality is a cost or benefit which is not transmitted through prices
An externality is a cost or benefit which is transmitted through prices
An externality is a production received through external resources
None of the above
Consumer surplus is the difference between
Price demanded and price paid
Price quoted and price actually paid
Price that a consumer is willing to pay and the price actually paid
None of the above
A monopolist is:
Price winner
Price searcher
Price taker
Price leaver
Which of the following does not have a uniform elasticity of demand at all points?
A vertical demand curve
A horizontal demand curve
A rectangular hyperbola demand curve
A downward sloping demand curve
The production process is:
Consuming goods and services
Transforming inputs into outputs
Wasting goods and services
Buying goods and services
According to Robbins, economics is a:
Science of wealth
Science of national welfare
Science of optimality
Science of scarcity
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