If the demand for good is less elastic and government levied a tax per unit of output, the price per unit for the firm would:
Rise by the amount of the tax
Rise by more than the amount of the tax
Rise by less than the amount of the tax
Remain the same
Correct Answer :
B. Rise by more than the amount of the tax
Related Questions
The Modern and Neo-Keynsian Theory of Interestwas presented by:
Gunner Myrdal
A.C.Pigou
J.M.Keynes
J.R.Hicks
In 1890, Principles of Economics was written by:
Prof. Robbins
Alfred Marshal
Prof. Senior
Adam Smith
Average cost means:
Cost of the average units
Cost of the last units of average
Cost of the unit of production
Total cost marginal cost
MC curve is:
L-shaped
U-shaped
V-shaped
Both a and b depending on situation
If the commodity is inferior then the Income Effect (I.E) and the Substitution Effect (S.E):
Both move together and reinforce each other
One moves and the other remains constant
Move in the opposite direction and neutralize each other
Both remain constant
In the case of a normal goods, the income effect:
Is always equal to the substitution effect
Completely offsets the substitution effect
Partially offsets the substitution effect
Reinforces the substitution effect
When the slope of a demand curve is zero (also known as vertical demand curve) then elasticity will be:
Zero (perfectly inelastic)
Equal to one (unitary elastic)
Infinite (perfectly elastic)
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 the Income Effect (I.E) and the Substitution Effect (S.E):
Both move together and reinforce each other
One moves and the other remains constant
Move in the opposite direction and neutralize each other
Both remain constant
Plumbing and pipe-fitting require many of the same skills. If the wage paid to pipe-fitters increased then the effect on the market for plumbers would probably be:
An increase in demand
A decrease in demand
An increase in supply
A decrease in supply
Market demand curve is:
Vertical summation of individual demand curves
Upward summation of individual demand curves
Downward summation of individual demand curves
Horizontal summation of individual demand curves
When total revenue is maximum in monopoly, elasticity of demand is:
E =1
E >1
E <1
E =0
If as a result of an increase in prices, total outlay (expenditures) on a commodity decreases, its price-elasticity of demand is:
Perfect elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unit elastic
Relatively inelastic (less than one elasticity)
A monopolist has control over the price he charges for his product. He will be able to maximize his profit by:
Lowering the price, if the demand curve is elastic
Lowering the price, if the demand curve is inelastic
Rising the price, if the demand curve is elastic
None of the above is applicable
Some economists refer to iso-product curves as:
Engels curve
Production indifference curve
Budget line
Ridge line
The firm is said to be in equilibrium when the difference between revenue and cost is:
Maximum
Minimum
Zero
One
The competitive equilibrium leads to:
The firms producing with excess capacity
The firms producing at their minimum costs
Firms producing at a cost higher than the minimum
Some firms producing under decreasing costs and others under increasing costs
The long run total cost is attained by:
LMC.Q
AC.Q
LC.Q
LAC.Q
When a competitive firm is in equilibrium in the long-run, its output is such that:
Costs per unit of output are lowest
Total profits are highest
Marginal cost is lowest
Profit per unit of output is zero
In sweezy model (kinked demand curve model), the overall increase in costs of production:
Do not effect equilibrium
Affect equilibrium
Both a and b
None of the above
Some farm land can be used to produce either corn or soybeans. If the demand for corn increases then:
The demand for soybeans should increase
The supply of soybeans should increase
The demand for soybeans should decrease
The supply of soybeans should decrease
The kink demand curve faced by an oligopolist is based on the assumption that:
Competitors will follow a price increase but not a price cut
Competitors will follow a price increase as well as a price cut
Competitors will ignore both a price increase and a price cut
Competitors will ignore a price increase but will follow a price cut
In measuring price-elasticity:
Price is a dependent variable and quantity is an independent variable
Price is an independent variable and quantity is a dependent variable
Price and quantity both are independent variables
Price and quantity both are dependent variables
Supply curves are most elastic:
In the long-run
In the short-run
For luxuries
In the immediate-run
The slope of isocost line (budget line) shows:
Capital labor ratio
Labor wage ratio
Factor price ratio
Factor labor ratio
In the theory of firm, Chamberline presented the idea of:
Rising cost
Falling cost
Rising input
Falling input
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
General equilibrium is concerned with simultaneous equilibrium of:
Few economic agents
All the economic agents
Two economic agents
Many economic agents
In case of short-run, the supply curve of an industry is the horizontal summation of:
Marginal cost curves
Average cost curves
Total cost curves
None of the above
Under perfect competition, the average revenue, marginal revenue and price are shown:
By a same single curve
By three different curves
By downward sloping curve
None of the above