If the prices of goods rise then:
The real income of consumer falls
The real income of consumer rises
The real income of a consumer remains constant
The real income of consumer becomes zero
Correct Answer :
A. The real income of consumer falls
Related Questions
The concept of industry in monopolistic competition has been replaced by:
Firm
Product group
Producers
Shopkeepers
If a straight line supply curve makes an intercept on the X-axis, the elasticity of supply is:
Equal to unity
Less than unity
More than unity
Zero
The consumer is in equilibrium at the where:
Budget line and indifference curve intersect each other
Budget line and indifference curve are tangent to each other
Budget line and indifference curve are opposite to each other
Budget line and indifference curve are parallel to each other
MC curve is:
L-shaped
U-shaped
V-shaped
Both a and b depending on situation
If the commodity is normal then price effect is:
Negative
Inverse
Positive
Both (a) and(b)
According to M.Kalecki, the true measure of the degree of monopoly power is the:
Ratio between price and marginal cost
Extent of monopolistic profit enjoyed by him
Cross-elasticity of demand for the product of the monopolist
Price charged by the monopolist minus marginal cost of production
In cournot model, firms sell:
Superior goods
Inferior goods
Identical goods
Differential goods
The demand curve of giffen goods will be:
Negatively sloped
Positively sloped
Parallel to X-axis
None of the above
In case of straight-line isoquant, the factors are not substituted because they are each others:
Imperfect substitutes
Perfect substitutes
Complements
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
Under competitive conditions, the industry will be in equilibrium:
When each firm is in equilibrium equating MC with MR
When all the firms are earning only normal profits
When firms outside have no tendency to enter the industry and those within, have no tendency to leave the industry
All of the above
A price is a ratio of exchange between:
Money and exchange
Quantity and production
Production and consumption
Money and quantity
If two goods have same marginal utility for a consumer then:
He will consume only one of them
He will consume equal quantities of them
He will be willing to pay the same price for each of them
The total utility gained from each of them is equal
Marginal utility is only meant for:
Half utility
Full utility
Additional utility
Multiplied utility
According to Smith, by value we mean the value with respect to use, and the price we mean the value with respect to:
Production
Consumption
Exchange
Formation
Income-elasticity of demand is expressed as:
% change in quantity demanded % change in income
% change in income % change in quantity demanded
Change in income Change in quantity demanded
None of the above
The difference between average total cost and average fixed cost shows:
Normal profits
Implicit costs
Variable costs
Opportunity costs
In dominant price leadership model, the small firms are like:
monopolistic firms
monopoly
competitive firms
none of the above
In case of income effect, the level of consumers satisfaction rises when:
Income rises
Income falls
Sales rises
Price falls
Efficient allocation of resources is likely to be achieved under:
Monopoly
Monopolistic competition
Perfect competition
Any market form
The demand of the luxuries is:
More elastic
Less elastic
Unit elastic
Zero elastic
According to Marshallian approach, utility:
Can be added
Can be subtracted
Can be multiplied
Can be divided
The shape of the TC curve is:
U
V
P
S(inverted)
If the price of a product falls then quantity demanded tends to increase ceteris paribus because:
The MU/P ratio has decreased
Of the income and substitution effects
Consumers tend to feel poorer when prices fall
When price falls the demand curve shifts right
The Cambridge School of Thought refers to the group of English economists who came under the influence of:
Alfred Marshal
J.M.Keynes
Paul A.Samuelson
A.C.Pigou
The Chamberline model recognizes mutual:
Independence of firms
Interdependence of firms
Independence of individuals
Interdependence of materials
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
Each SAC represents a particular level of:
Input
Output
Both of them
None of them
Cross-elasticity of demand or cross-price elasticity between two independent goods will be:
Negative
Positive
Infinite
Zero
According to Cobb-Douglas, in production function the marginal product of labor is:
