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4

If the price of a product falls which of the following would occur?

A. Indifference curves shift down

B. Budget line shifts down

C. Indifference curve shift up

D. Budget line pivots

Correct Answer :

D. Budget line pivots



If the price of productB falls the budget line now pivots. The consumer now maximises utility consuming Q3 of product A and Q4 of product B. The fall in the price of product B has led to an increase in quantity demanded.}

Related Questions

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4

Variable costs refer to:

A. Capital cost plus operating costs

B. Capital costs alone

C. Capital costs plus spill-over costs

D. Operating costs alone

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4

Variable cost includes the cost of:

A. Hiring the building for the factory

B. Purchasing heavy machines

C. Paying the manager of the factory

D. Paying the laborers

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4

The word ECONOMICS is derived from the Greek terms meanings:

A. Political economy

B. Household Management

C. Production and consumption

D. Financial Accounting

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4

Who first used the term Quasi-Rent?

A. David Ricardo

B. Alfred Marshal

C. J.S.Mill

D. Karl Marx

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4

Nash Equilibrium is stable:

A. They involve dominant strategies

B. They involves constant-sum games

C. Once the strategies are chosen, no player has an incentive to deviate unilaterally from them

D. None of the above

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4

The proportionality rule in production requires that the ratios of MP and factor prices are:

A. Doubled

B. Equalized

C. Not equalized

D. None of the above

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4

Under the law of variable proportions, the average and the marginal product of the variable factor would ultimately:

A. Become equal

B. Decrease

C. Become constant

D. Increase

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4

As the price of diamond is higher, so it has:

A. Higher marginal valuation for consumer

B. Lower marginal cost for producer

C. Higher marginal cost for producer

D. Both (a) and (c)

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4

The relationship between price effect, income effect and substitution effect is:

A. P.E = S.E + I.E

B. S.E = P.E +I.E

C. I.E = P.E +S.E

D. S.E = P.E +2I.E

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4

On a straight line demand curve, elasticity of demand at the midpoint is:

A. Equal to zero

B. Equal to one

C. Equal to infinity

D. More than one

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4

In market sharing cartel model, cartel determines the shares of:

A. the individuals

B. industry

C. firms

D. associations

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4

Which is the other name that is given to the average revenue curve?

A. Profit curve

B. Demand curve

C. Average cost curve

D. Indifference curve

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4

Change in demand (rise and fall of demand) is:

A. Due to change in price while other factors remain constant

B. Due to change in factors other than price

C. Both a and b

D. None of the above

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4

If two goods have same marginal utility for a consumer then:

A. He will consume only one of them

B. He will consume equal quantities of them

C. He will be willing to pay the same price for each of them

D. The total utility gained from each of them is equal

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4

The point on which the average cost is minimum in a firm, short run average cost curve will also be the minimum cost point on the firms long-run average cost curve. This is true:

A. Always

B. Never

C. When LAC is falling

D. Only at that level of output when LAC is at its minimum

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4

The cournot model is a model of:

A. Instable equilibrium

B. Stable equilibrium

C. Constant equilibrium

D. Fluctuating equilibrium

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4

The ordinal approach was presented by:

A. Marshal

B. J.R.Hicks

C. Adam smith

D. Rostow

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4

The main contribution of Adam Smith is in the field of:

A. Economics of state

B. Wealth of Nations

C. Value and price

D. Theory of demand

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4

The game theory concentrates on:

A. Gaming

B. Strategic decisions

C. Both a and b

D. None of the above

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4

Most of the supply curves with which the average consumer deals are:

A. Vertical

B. Horizontal

C. Controlled by the largest producers

D. Unaffected by inflation

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4

Gold is bought and sold in a:

A. Perfectly competitive international market

B. Perfectly competitive national market

C. Imperfect international market

D. Imperfect national market

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4

Price-taker firms:

A. Advertise to increase the demand for their product

B. Do not advertise, because most advertising is wasteful

C. Do not advertise because they can sell as much as they want at the current price

D. Who advertise will get more profits than those who do not

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4

The demand curve of giffen goods will be:

A. Negatively sloped

B. Positively sloped

C. Parallel to X-axis

D. None of the above

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4

If a firm is producing output at a point where diminishing returns have set in, this means that:

A. Each additional unit of output will be more expensive to produce

B. Each additional unit of output will require increasing amount of inputs

C. Marginal product of the variable factor of production decreases as the quantity increases

D. All of the above

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4

In monopolistic competition, the real differentiation in products is due to difference in:

A. Style

B. Consumer

C. Cost

D. Material

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4

In monopolistic competition (also in kinked demand curve model), a firm sells the amount where:

A. Individual demand curve (IDC) is equal to proportional demand curve (PDC)

B. Individual demand curve (IDC) is greater than proportional demand curve (PDC)

C. Individual demand curve (IDC) is less than proportional demand curve (PDC)

D. None of the above

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4

The economic problem of determining the combination of inputs yielding lowest cost for producing a given output:

A. Is only a choice among the technologically efficient combination

B. Depends on the relative price of inputs

C. Depends on the price of the product

D. Depends on the profits made

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4

Discriminating monopoly implies that the monopolist charges different prices for his commodity:

A. From different groups of consumers

B. For different uses

C. At different places

D. Any of the above

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4

MC curve is:

A. L-shaped

B. U-shaped

C. V-shaped

D. Both a and b depending on situation

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4

Who is the author of Problems of Capital Formation in Underdeveloped Countries?

A. R.Nurkse

B. N.Kaldor

C. S.kuznets

D. Alfred Marshal