If the factors have to be employed in a fixed ratio, then the elasticity of substitution under Leontief technology is:
One
Zero
Two
Five
Correct Answer :
B. Zero
Related Questions
In monopolistic competition, the firms have to face:
Same cost conditions
Different cost conditions
Same price conditions
Same products conditions
Under the perfect competition, the transportation cost:
Is considered to be negligible and thus ignored
Is considered to be vital for the calculation of total cost
Is charged along with the price of the commodity
None of the above
Social costs equal private costs when:
Marginal cost is zero
Total cost is zero
External costs are zero
Average costs are zero
On the total utility curve the economically relevant range is the portion over which:
The total utility is rising at a declining rate
The total utility is raising at an increasing rate
Total utility is maximum
Total utility is declining
The factors of production in perfect competition are:
Stagnant
Mobile
Immobile
Rare
LMC represents change in LTC (long-run total cost) due to producing an additional unit of a good while the fixed and variable factors:
Cannot be changed
Can be changed
Can partially be changed
None of the above
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 monopolistic competition, the individual demand curve is also known as:
Planned products curve
Planned material curve
Planned costs curve
Planned sales curve
A country is advised to devalue (reduce external value of) its currency only when its exports face:
Inelastic demand in foreign markets
Elastic demand in foreign markets
Unit elastic demand in foreign markets
None of the above
Neutral Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
The market demand for any commodity is the:
Average requirement for it in any given place
Amount of it wanted at any given price
Amount that people would like to buy during a period at different prices
Quantity needed to maintain a given standard of living
Capital Saving Technological Progress can be defined as:
Technological progress that causes to raise the marginal product of capital and labor in the same proportion
Technological progress that causes the marginal product of capital to increase relative to the marginal product of labor
Technological progress that causes the marginal product of labor to increase relative to the marginal product of capital
None of the above
The coefficient of the price elasticity of demand is computed as the absolute value of the percentage change in quantity demanded divided by:
The change in price
The change in supply
The percentage change in supply
The percentage change in price
4.The Law of Diminishing Returns according to the modern view, applies to:
Agriculture
All fields of production
Industry
Services
The marginal revenue of a perfectly competitive firm is:
Equal to the prices of its products
Positively related to output
Negatively related to output
Always higher than marginal cost
The relationship between MC and MP shown by the marginal cost concept is:
Inverse
Direct
Negative
Positive
If in the long run all factor inputs are increased three times and the resulting output is four times as before, it is a case of:
Decreasing returns to scale
Variable returns to scale
Constant returns to scale
Increasing returns to scale
The goods sold by firms under monopolistic competition are technological as well as:
Economic complements
Economic substitutes
Economic inferiors
None of the above
We can obtain consumers demand curve from:
Income Consumption Curve (ICC)
Engels Curve
Price Consumption Curve (PCC)
Production Possibility Curve (PPC)
In case of complementary factors, the isoquants are:
L-shaped
J-shaped
M-shaped
V-shaped
Increase in demand occurs when:
The price falls and the demand also falls down
The price increases but demand falls down
The price increases the demand remains constant and when the price remains constant the demand goes up
The price remains constant but demand falls
Each firm in cournot model assumes that its competitor will:
change its output
not change its output
change its price
not change its price
The income consumption curve (ICC) is the locus of points of consumer equilibrium resulting:
Only when the price of commodity X changes
Only when the price of commodity Y changes
Only when the consumers income is varied
None of the above
If less is demanded at the same price or same quantity demanded at a lower price, it is a case of:
Contraction of demand
Decrease in demand
Increase in demand
Extension of demand
Economics is a:
Exact science
Inexact science
Pure science
All of the above
Variable cost includes the cost of:
Hiring the building for the factory
Purchasing heavy machines
Paying the manager of the factory
Paying the laborers
If as a result of a decrease in price, total outlay (expenditures) on a commodity increases, its price-elasticity of demand is:
Perfectly elastic (infinitely elastic)
Relatively elastic (greater than one elasticity)
Unit elastic
Relatively inelastic (less than one elasticity)
The budget-line is also known as the:
Iso-utility curve
Production possibility line
Isoquant
Consumption possibility line
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
7.The costs which the firms have to face in order to change the price tags of their products and services are called:
Product costs
Real costs
Menu costs
Nominal costs