If the consumers expect that the price of computers will decrease in next year then:
Current demand for computers will fall
Current demand for computers will rise
Current demand will change unpredictably
Current supply of computers will rise
Correct Answer :
A. Current demand for computers will fall
If the price expected in the future falls, consumers will substitute future purchases of computers for present purchases by reducing current demand.}
Related Questions
The slope of indifference curve shows:
Income level
Satisfaction level
Marginal rate of substitution
Demand level
Extension (expansion) and contraction of demand are result of:
Change in consumers income
Change in consumers tastes
Change in price
None of the above
After reaching the saturation point consumption of additional units of the commodity cause:
Total utility to fall and marginal utility to increase
Total utility and marginal utility both to increase
Total utility to fall and marginal utility to become negative
Total utility to become negative and marginal utility to fall
In the modern theory of costs, the level of production which the firm considers feasible is known as:
Input factor
Heavy factor
Output factor
Load factor
In dominant price leadership model, the small firms are like:
monopolistic firms
monopoly
competitive firms
none of the above
Increasing return to scales can be explained in terms of:
Optimal factor proportions
Fixed scale of plant
External and internal economies
Labor productivity
Pure monopoly exists:
When there is a single producer
When there is a single producer without any close substitute
When there is a single producer with close substitutes
When a few producers control the industry
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
The production techniques are technically efficient:
Bellow the lower ridge line
Above the upper ridge line
Between the two ridge lines
On the upper ridge line
The good will highest income elasticity is:
Beef
Mutton
Bread
Motion-picture tickets
The fundamental choices that a society must make about the use of its resources include:
How much to produce
How to produce
How to distribute
All of the above
With the expansion of output, the short run average cost curve, beyond a point, starts rising because:
Average fixed cost increases sharply
More production yields lower per unit price
The law of variable proportions applies to short run production
Sales expenses become much larger
When at a given price, the quantity demanded of a commodity is more than the quantity supplied, there will be:
An upward pressure on price
A downward pressure on price
Price will remain unaffected
All of the above
In the case where two commodities are good substitutes then cross elasticity will be:
Positive
Unitary
Negative
Infinite
The Tit for Tat strategy means cooperation by the 2nd firm if:
1st firm does not cooperate
1st firm cooperates
1st firm collapses
None of the above
In case of monopoly, TR curve rises at a:
Constant rate
Decreasing rate
Increasing rate
None of the above
In modern cost theory, AVC= b1 and MC= b1 in the range of:
Excess capacity
Reserve capacity
Limited capacity
None of the above
Which of the following has more elastic demand curve?
A commodity without substitutes
A commodity with substitutes
A commodity on which a small fraction of income is spent
A commodity the use of which cannot be postponed
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
The main contribution of Malthus is in the field of:
Consumption expenditure
Theory of population
Division of labor
Theory of demand
According to marginalistic rule, the profit maximization hypothesis requires:
MC
MC>MR
MC=AP
MC=MR
A firm can never produce in the middle area of input space, in case of:
Concave isoquant
Convex isoquant
Constant isoquant
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In monopolistic competition (also in kinked demand curve model), a firm sells the amount where:
Individual demand curve (IDC) is equal to proportional demand curve (PDC)
Individual demand curve (IDC) is greater than proportional demand curve (PDC)
Individual demand curve (IDC) is less than proportional demand curve (PDC)
None of the above
Who is the founder of classical school of thought?
David Ricardo
Adam Smith
T.R.Malthus
J.S.Mill
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fixation of price
Arc elasticity of demand
Cross elasticity of demand
Wage theory
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Increases
Decreases
Remains constant
Becomes zero
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Downwards to the right
Upwards to the right
Backwards to the top
Inwards at the bottom
The factors of production in perfect competition are:
Stagnant
Mobile
Immobile
Rare
The Strategy of Economic Development is the work of:
S.Kuznets
H.Liebenstein
A.O.Hirshman
Alfred Marshal
In short run:
Labor is variable
Labor is fixed
Capital is variable
None of the above